Kohler Corporation reports the following components of
stockholders’ equity at December 31 of the prior
year.
Common stock—$15 par value, 100,000 shares
authorized, 45,000 shares issued and outstanding |
$ 675,000 |
Paid-in capital in excess of par value, common
stock |
80,000 |
Retained earnings |
400,000 |
Total stockholders' equity |
$ 1,155,000 |
During the current year, the following transactions affected its
stockholders’ equity accounts.
January 2 |
Purchased 5,000 shares of its own stock at $15 cash per
share. |
January 5 |
Directors declared a $6 per share cash dividend payable on
February 28 to the February 5 stockholders of record. |
February 28 |
Paid the dividend declared on January 5. |
July 6 |
Sold 2,500 of its treasury shares at $19 cash per share. |
August 22 |
Sold 2,500 of its treasury shares at $11 cash per share. |
September 5 |
Directors declared a $6 per share cash dividend payable on
October 28 to the September 25 stockholders of record. |
October 28 |
Paid the dividend declared on September 5. |
December 31 |
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.
2. Prepare a statement of retained earnings
for the current year ended December 31.
3. Prepare the stockholders’ equity section
of the balance sheet as of December 31 of the current year.
Please help with Red Errors! Thank you.
Required 1 Required 2 Required 3 Prepare journal entries to record each of these transactions. No 1 2 3 4 5 6 7 8 Date January 02 January 05 February 28 July 06 August 22 September 05 October 28 December 31 Treasury stock, Common Cash Retained earnings Common dividend payable Common dividend payable Cash Cash General Journal Treasury stock, Common Paid-In capital, Treasury stock Cash Paid-In capital, Treasury stock Treasury stock, Common Retained earnings Common dividend payable Common dividend payable Cash Income summary Retained earnings Required 1 Required 2 > Debit 75,000 240,000 240,000 47,500 27,500 450,000 75,000 388,000 Credit 75,000 240,000 240,000 27,500 27,500 450,000 75,000 388,000
Required 1 Required 2 Required 3 Prepare a statement of retained earnings for the current year ended December 31. (Amounts to be deducted should be indicated by a minus sign.) KOHLER CORPORATION Statement of Retained Earnings For Current Year Ended December 31 S Retained earnings, December 31, prior year Add: Net income Less: Cash dividends declared Retained earnings, December 31, current year 400,000 388,000 (555,000) $ 233,000 < Required 1 Required 3 >
Required 1 Required 2 Required 3 Prepare the stockholders' equity section of the balance sheet as of December 31 of the current year. KOHLER CORPORATION Stockholders' Equity Section of the Balance Sheet December 31 Common stock - $15 par value Paid-in capital in excess of par value, common stock Total contributed capital Retained earnings Total stockholders' equity $ 600,000 80,000 680,000 233,000 $ 913,000 < Required 2 Required 3 >