Prepare journal entries to record each of these transactions

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Problem - Cash dividends, treasury stock, and statement of retained earnings - 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, 50,000 shares issued and outstanding $500,000

Paid-in capital in excess of par value, common stock 80,000

Retained earnings 430,000

Total stockholders' equity $ 1,010,000

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

January 2 Purchased 5,000 shares of its own stock at $15 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 $19 cash per share.

August 22 Sold 2,500 of its treasury shares at $11 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 $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.

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

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

Reference no: EM133052574

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