Question - Kohler Corporation reports the following components of stockholders' equity on December 31, 2015:
- Common stock-$15 par value, 100,000 shares authorized, 55,000 shares issued and outstanding - $825,000
- Paid-in capital in excess of par value, common stock - 60,000
- Retained earnings - 400,000
- Total stockholders' equity - $1,285,000
In year 2016, the following transactions affected its stockholders' equity accounts.
Jan. 1 Purchased 6,000 shares of its own stock at $20 cash per share.
Jan. 5 Directors declared a $4 per share cash dividend payable on Feb. 28 to the Feb. 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 $4 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 $408,000 credit balance (from net income) in the Income Summary &coin to Retained Earnings.
Required -
1. Prepare journal entries to record each of these transactions for 2016.
2. Prepare a statement of retained earnings for the year ended December 31, 2016.
3. Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2016.