60.1K

Verified Solution

Link Copied!

Kohler Corporation reports the following components of stockholders' equity at December $31$ of the prior year.

Common stock$-$ $$10$ par value, $100,000$ shares authorized, $55,000$ shares issued and outstanding

Paid$-$in capital in excess of par value, common stock

Retained earnings

Total stockholders' equity

During the current year, the following transactions affected its stockholders' equity accounts.

January $2$ Purchased $5,000$ shares of its own stock at $$25$ cash per share.

January $5$ Directors declared a $$4$ 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 $$29$ cash per share.

August $22$ Sold $2,500$ of its treasury shares at $$21$ cash per share.

September $5$ Directors declared a $$4$ 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:

Prepare journal entries to record each of these transactions.

Prepare a statement of retained earnings for the current year ended December $31.$

Prepare the stockholders' equity section of the balance sheet as of December $31$ of the current year.

Complete this question by entering your answers in the tabs below.

Prepare journal entries to record each of these transactions.

Journal entry worksheet

Record the reissue of $2,500$ shares of the treasury stock for $$21$ cash per

share.

Note: Enter debits before credits.

Answer & Explanation Solved by verified expert

See Answer