Stock Homework Chp 11 PDF

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5/4/2021

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

100/100

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100

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Kohler Corporation reports the following components of stockholders’ equity on December 31, 2016: Common stock—$15 par value, 100,000 shares authorized, 45,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings

$ 675,000 80,000 430,000

Total stockholders' equity

$1,185,000

In year 2017, the following transactions affected its stockholders’ equity accounts. Jan. Jan. Feb. July Aug. Sept. Oct. Dec.

1 Purchased 5,000 shares of its own stock at $20 cash per share. 5 Directors declared a $4 per share cash dividend payable on February 28 to the February 5 stockholders of record. 28 Paid the dividend declared on January 5. 6 Sold 1,875 of its treasury shares at $24 cash per share. 22 Sold 3,125 of its treasury shares at $17 cash per share. 5 Directors declared a $4 per share cash dividend payable on October 28 to the September 25 stockholders of record. 28 Paid the dividend declared on September 5. 31 Closed the $428,000 credit balance (from net income) in the Income Summary account to Retained Earnings.

Required: 1. Prepare journal entries to record each of these transactions for 2017. 2. Prepare a statement of retained earnings for the year ended December 31, 2017. 3. Prepare the stockholders' equity section of the company’s balance sheet as of December 31, 2017.

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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 for 2017. No 1

Date Jan 01

General Journal

Debit

Treasury stock, Common

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Cash 2

Jan 05

Feb 28

Retained earnings



5

Jul 06

Aug 22

Common dividend payable



Sep 05

Cash



Oct 28

Dec 31

160,000



160,000









37,500



Paid-In capital, Treasury stock

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7,500



62,500



180,000



180,000

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428,000

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Cash



53,125

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Paid-In capital, Treasury stock

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7,500

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Retained earnings

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1,875





Retained earnings



180,000





Common dividend payable



Cash

8

45,000



Treasury stock, Common

Common dividend payable

7

160,000

100,000





Treasury stock, Common 6

160,000

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Cash

4

Credit 



Common dividend payable

3

100,000

180,000

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

Income summary



Retained earnings

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Required 1

428,000

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Required 2

 References Worksheet

Learning Objective: 11-C3 Explain the items reported in retained earnings.

Difficulty: 3 Hard

Learning Objective: 11-P2 Record transactions involving cash dividends, stock dividends, and stock splits.

Learning Objective: 11-P3 Record purchases and sales of treasury stock.

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Kohler Corporation reports the following components of stockholders’ equity on December 31, 2016: Common stock—$15 par value, 100,000 shares authorized, 45,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings

$ 675,000 80,000 430,000

Total stockholders' equity

$1,185,000

In year 2017, the following transactions affected its stockholders’ equity accounts. Jan. Jan. Feb. July Aug. Sept. Oct. Dec.

1 Purchased 5,000 shares of its own stock at $20 cash per share. 5 Directors declared a $4 per share cash dividend payable on February 28 to the February 5 stockholders of record. 28 Paid the dividend declared on January 5. 6 Sold 1,875 of its treasury shares at $24 cash per share. 22 Sold 3,125 of its treasury shares at $17 cash per share. 5 Directors declared a $4 per share cash dividend payable on October 28 to the September 25 stockholders of record. 28 Paid the dividend declared on September 5. 31 Closed the $428,000 credit balance (from net income) in the Income Summary account to Retained Earnings.

Required: 1. Prepare journal entries to record each of these transactions for 2017. 2. Prepare a statement of retained earnings for the year ended December 31, 2017. 3. Prepare the stockholders' equity section of the company’s balance sheet as of December 31, 2017.

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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 for 2017. No

Date

1

Jan 01

General Journal

Debit

Treasury stock, Common

Credit

100,000

Cash 2

Jan 05

100,000

Retained earnings

160,000

Common dividend payable

3

Feb 28

160,000

Common dividend payable

160,000

Cash

4

Jul 06

160,000

Cash

45,000

Treasury stock, Common

37,500

Paid-In capital, Treasury stock 5

Aug 22

7,500

Cash

53,125

Paid-In capital, Treasury stock

7,500

Retained earnings

1,875

Treasury stock, Common 6

Sep 05

62,500

Retained earnings

180,000

Common dividend payable

7

Oct 28

180,000

Common dividend payable

180,000

Cash

8

Dec 31

180,000

Income summary

428,000

Retained earnings

428,000

Required 1

Required 2

 Explanation: 1. Jan.

1 Purchased treasury stock (5,000 × $20) = $100,000.

Jan.

5 Declared $4 dividend on 40,000 outstanding shares = $160,000

July

6 Cash = (1,875 × $24) = $45,000. Treasury Stock, Common = (1,875 × $20) = $37,500. Paid-In Capital, Treasury Stock = (1,875 × $4) = $7,500.

Aug. 22 Cash = (3,125 × $17) = $53,125. Treasury Stock, Common = (3,125 × $20) = $62,500. Sept. 5 Declared $4 dividend on 45,000 outstanding shares = $180,000

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3. Common stock—($15 par value, 100,000 shares authorized, 45,000 shares issued and outstanding) = $675,000 

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