70.2K

Verified Solution

Link Copied!

Problem 11-2A (Algo) Cash dividends, treasury stock, and statement of retained earnings LO C3, P2, P3 Kohler Corporation reports the following components of stockholders' equity at December 31, 2019. Common stock-$25 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 $1,250,000 70,000 400,000 $1,720,000 During 2020, the following transactions affected its stockholders' equity accounts. Jan. 2 Purchased 6,000 shares of its own stock at $20 cash per share. Jan. 5 Directors declared a $2 per share cash dividend payable on February 28 to the February 5 stockholders of record Feb. 28 Paid the dividend declared on January 5. July 6 Sold 2,250 of its treasury shares at $24 cash per share. Aug. 22 Sold 3,750 of its treasury shares at $17 cash per share. Sept. 5 Directors declared a $2 per share cash dividend payable on October 28 to the September 25 stockholders of record Oct. 28 Paid the dividend declared on September 5. Dec. 31 Closed the $368,000 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 year ended December 31, 2020. 3. Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2020. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare journal entries to record each of these transactions. View transaction list View journal entry worksheet X No Date Debit Credit 1 Jan 02 General Journal Treasury stock, Common Cash 120,000 120,000 2 Jan 05 Retained earnings Common dividend payable 3 Feb 28 Common dividend payable Cash 4 Jul 06 Cash 54,000 Treasury stock, Common Paid-In capital, Treasury stock Required 1 Required 2 Required 3 Prepare a statement of retained earnings for the year ended December 31, 2020. (Amounts to be deducted should be indicated by a minus sign.) KOHLER CORPORATION Statement of Retained Earnings For Year Ended December 31, 2020 0 0 Required: 1. Prepare journal entries to record each of these transactions. 2. Prepare a statement of retained earnings for the year ended December 31, 2020. 3. Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2020. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2020. KOHLER CORPORATION Stockholders' Equity Section of the Balance Sheet December 31, 2020 Total contributed capital 0 Total stockholders' equity $ 0

Answer & Explanation Solved by verified expert

See Answer