Common stock-$20 par value, 100,000 shares authorized, 50,000 shares issued and outstanding Paid-in capital in excess...

    

Transcribed Image Text:

Common stock-$20 par value, 100,000 shares authorized, 50,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity In year 2016, the following transactions affected its stockholders' equity accounts. Jan. 1 Purchased 4,000 shares of its own stock at $20 cash per share. Jan. 5 Feb. 28 July 6 Aug. 22 Sept. 5 Oct. 28 Dec. 31 $1,000,000 70,000 460,000 $1,530,000 Directors declared a $4 per share cash dividend payable on Feb. 28 to the Feb. 5 stockholders of record. Paid the dividend declared on January 5. Sold 1,500 of its treasury shares at $24 cash per share. Sold 2,500 of its treasury shares at $17 cash per share. Directors declared a $4 per share cash dividend payable on October 28 to the September 25 stockholders of record. Paid the dividend declared on September 5. Closed the $388,000 credit balance (from net income) in the Income Summary account to Retained Earnings. Required: 1. Prepare journal entries to record each of these transactions for 2016. Jan 05 Feb 28 Jul 06 Aug 22 Sep 05 Oct 28 Dec 31 Retained earnings Common dividend payable Common dividend payable Cash Cash Treasury stock, Common Paid-In capital, Treasury stock Cash Paid-In capital, Treasury stock Retained earnings Treasury stock, Common Retained earnings Common dividend payable Common dividend payable Cash Income summary Retained earnings 184,000 184,000 36,000 42,500 6,000 388,000 184,000 184,000 30,000 6,000 388,000 2. Prepare a statement of retained earnings for the year ended December 31, 2016. (Amounts to be deducted should be indicated by a minus sign.) KOHLER CORPORATION Statement of Retained Earnings For Year Ended December 31, 2016 Retained earnings, Dec. 31, 2015 $ Add: Net income Less: Cash dividends declared Less: Treasury stock reissuances Retained earnings, Dec. 31, 2016 $ 460,000 388,000 848,000 848,000 3. Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2016. KOHLER CORPORATION Stockholders' Equity Section of the Balance Sheet December 31, 2016 Common stock - $20 par value Paid-in capital in excess of par value, common stock Total contributed capital Retained earnings Total stockholders' equity $ $ 1,000,000 70,000 1,070,000 1,070,000 Common stock-$20 par value, 100,000 shares authorized, 50,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity In year 2016, the following transactions affected its stockholders' equity accounts. Jan. 1 Purchased 4,000 shares of its own stock at $20 cash per share. Jan. 5 Feb. 28 July 6 Aug. 22 Sept. 5 Oct. 28 Dec. 31 $1,000,000 70,000 460,000 $1,530,000 Directors declared a $4 per share cash dividend payable on Feb. 28 to the Feb. 5 stockholders of record. Paid the dividend declared on January 5. Sold 1,500 of its treasury shares at $24 cash per share. Sold 2,500 of its treasury shares at $17 cash per share. Directors declared a $4 per share cash dividend payable on October 28 to the September 25 stockholders of record. Paid the dividend declared on September 5. Closed the $388,000 credit balance (from net income) in the Income Summary account to Retained Earnings. Required: 1. Prepare journal entries to record each of these transactions for 2016. Jan 05 Feb 28 Jul 06 Aug 22 Sep 05 Oct 28 Dec 31 Retained earnings Common dividend payable Common dividend payable Cash Cash Treasury stock, Common Paid-In capital, Treasury stock Cash Paid-In capital, Treasury stock Retained earnings Treasury stock, Common Retained earnings Common dividend payable Common dividend payable Cash Income summary Retained earnings 184,000 184,000 36,000 42,500 6,000 388,000 184,000 184,000 30,000 6,000 388,000 2. Prepare a statement of retained earnings for the year ended December 31, 2016. (Amounts to be deducted should be indicated by a minus sign.) KOHLER CORPORATION Statement of Retained Earnings For Year Ended December 31, 2016 Retained earnings, Dec. 31, 2015 $ Add: Net income Less: Cash dividends declared Less: Treasury stock reissuances Retained earnings, Dec. 31, 2016 $ 460,000 388,000 848,000 848,000 3. Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2016. KOHLER CORPORATION Stockholders' Equity Section of the Balance Sheet December 31, 2016 Common stock - $20 par value Paid-in capital in excess of par value, common stock Total contributed capital Retained earnings Total stockholders' equity $ $ 1,000,000 70,000 1,070,000 1,070,000

Answer rating: 100% (QA)

1 Date General Journal Debit Credit Jan 01 Treasury Stock Common 80000 Cash 80000 Jan 05 Retained ea... View the full answer