| Kohler Corporation reports the following components of stockholders’ equity on December 31, 2015: |
| Common stock—$20 par value, 100,000 shares authorized, 50,000 shares issued and outstanding | $ | 1,000,000 |
| Paid-in capital in excess of par value, common stock | 80,000 | |
| Retained earnings | 460,000 | |
| Total stockholders’ equity | $ | 1,540,000 |
| In year 2016, the following transactions affected its stockholders’ equity accounts. | |||
| Jan. | 1 | Purchased 5,500 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 2,063 of its treasury shares at $24 cash per share. | |
| Aug. | 22 | Sold 3,437 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 $428,000 credit balance (from net income) in the Income Summary account to Retained Earnings. | |
| KOHLER CORPORATION | |
| Stock holder equity section of balancesheet | |
| For Year Ended December 31, 2016 | |
| Common stock – $20 par value | 1,000,000 |
| Paid-in capital in excess of par value, common stock |
80,000 |
| Retained earnings | 507,941 |
| Total Shareholders Equity | 1,587,941 |
Working Notes:
Jan 01
DR Treasury stock, Common 110,000
CR Cash 110,000
Jan 05
DR Retained earnings 178,000
CR Common dividend payable 178,000
Feb 28
DR Common dividend payable 178,000
CR Cash 178,000
Jul 06
DR Cash 49513
CR Treasury stock, Common 41260
CR Paid-in capital, Treasury stock 8252
Aug 22
DR Cash 58429
DR Paid-in capital, Treasury stock 8252
DR Retained earnings 2059
CR Treasury stock, Common 68740
Sep 05
DR Retained earnings 200,000
CR Common dividend payable 200,000
Oct 28
DR Common dividend payable 200,000
CR Cash 200,000
Dec 31
DR Income summary 428,000
CR Retained earnings 428,000
Explanation:
Jan. 1 Purchased treasury stock (5500 × $20) = $110,000.
Jan. 5 Declared $4 dividend on 44500 outstanding shares = $ 178,000
July 6 Cash = (2063 × $24) = $49512.
Treasury Stock, Common = (2063 × $20) = $30,000.
Paid-In Capital, Treasury Stock = (2063 × $4) = $6,000.
Aug. 22 Cash = (3437 × $17) = $ 58429
Treasury Stock, Common = (2,500 × $20) = $68740.
Sept. 5 Declared $4 dividend on 50,000 outstanding shares = $200,000
Explanation:
Common stock ($20 par value, 100,000 shares authorized, 50,000 shares issued and outstanding) = $ 1,000,000
