Assignment Task: Kohler Corporation reports the following components of stockholders' equity at December 31, 2018.
Common stock-$20 par value, 100,000 shares authorized, 55,000 shares issued and outstanding - $1,100,000
Paid-in capital in excess of par value, common stock - 80,000
Retained earnings - 400,000
Total stockholders' equity - $1,580,000
During 2019, 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 $6 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 $6 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:
Q1. Prepare journal entries to record each of these transactions.
Q2. Prepare a statement of retained earnings for the year ended December 31, 2019.
Q3. Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2019.
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