A) Kohler Corporation reports the following components of stockholders’ equity at December 31 of the prior year.
B) Common stock—$15 par value, 100,000 shares authorized, 50,000 shares issued and outstanding $ 750,000 Paid-in capital in excess of par value, common stock 60,000 Retained earnings 370,000 Total stockholders' equity
C) During the current year, the following transactions affected its stockholders’ equity accounts.
D) January 2 Purchased 4,000 shares of its own stock at $15 cash per share. January 5 Directors declared a $2 per share cash dividend payable on February 28 to the February 5 stockholders of record. February 28Paid the dividend declared on January 5. July 6 Sold 2,000 of its treasury shares at $19 cash per share. August 22 Sold 2,000 of its treasury shares at $11 cash per share. September 5 Directors declared a $2 per share cash dividend payable on October 28 to the September 25 stockholders of record. October 28Paid 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.
E) Prepare journal entries to record each of these transactions.
a) Prepare a statement of retained earnings for the current year ended December 31.
b) Prepare the stockholders’ equity section of the balance sheet as of December 31 of the current year.