Question

Kohler Corporation reports the following components of stockholders’ equity on December 31, 2015:

Common stock—$20 par value, 100,000 shares authorized, 45,000 shares issued and    outstanding	$	900,000
Paid-in capital in excess of par value, common stock		70,000
Retained earnings		370,000
Total stockholders’ equity	$	1,340,000

In year 2016, the following transactions affected its stockholders’ equity accounts.
Jan.	1		Purchased 4,500 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 1,688 of its treasury shares at $24 cash per share.
Aug.	22		Sold 2,812 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 $368,000 credit balance (from net income) in the Income Summary account to Retained Earnings.

Prepare the stockholders' equity section of the company’s balance sheet as of December 31, 2016.

	KOHLER CORPORATION Stockholders' Equity Section of the Balance Sheet December 31, 2016 Common stock - $20 par value $900,000 Paid-in capital in excess of par value, common stock 70,000 Total contributed capital 970,000 Retained earnings Total stockholders' equity $970,000

Answer 1

	General Journal
	Date	Account titles & Explanations				Debit	Credit
	1-Jan	Treasury Stock				90000
		Cash	(4500*20)				90,000
	5-Jan	Retained earnings				81000
		Dividends payable					81,000
		(45,000-4500)*2
	28-Feb	Dividends payable				81,000
		cash					81,000
	6-Jul	Cash		(1688*24)		40512
		Treasury stock		(1688*20)			33760
		paid in capital in excess-TS					6752
	22-Aug	Cash		(2812*17)		47804
		paid in capital in excess-TS				6,752
		Retained earnings				1,684
		Treasury stock		(2812*20)			56240
	5-Sep	Retained earnings				90,000
		Dividends payable					90,000
		(45000*2)
	28-Oct	Dividends payable				90,000
		cash					90,000
	31-Dec	Income summary				368,000
		Retained earnings					368,000
		Stockholders Equity section
	common stock -$20 par value					900,000
	paid in capital in excess of par value-CS					70,000
	total contributed capital					970,000
	Retained earnings					565,316
	total stockholders Equity					1,535,316