Reference no: EM132949155
Kohler Corporation reports the following components of stockholders' equity at December 31, 2019.
Common stock-$10 par value, 100,000 shares authorized,
55,000 shares issued and outstanding $550,000
Paid-in capital in excess of par value, common stock 80,000
Retained earnings 370,000
Total stockholders' equity $1,000,000
During 2020, the following transactions affected its stockholders' equity accounts.
Jan. 2 Purchased 4,500 shares of its own stock at $25 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 1,688 of its treasury shares at $29 cash per share.
Aug. 22 Sold 2,812 of its treasury shares at $22 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 $408,000 credit balance (from net income) in the Income Summary account to Retained Earnings.
Required:
Problem 1. Prepare journal entries to record each of these transactions.
Problem 2. Prepare a statement of retained earnings for the year ended December 31, 2020.
Problem 3. Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2020.