Kohler Corporation reports the following components of stockholders’ equity on December 31, 2016: 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 70,000
Retained earnings 430,000
Total stockholders' equity $1,500,000
In year 2017, the following transactions affected its stockholders’ equity accounts.
Jan. 2 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 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 $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 $388,000 credit balance (from net income) in the Income Summary account to Retained Earnings.
Required:
1. Prepare journal entries to record each of these transactions for 2017.
2. Prepare a statement of retained earnings for the year ended December 31, 2017.
3. Prepare the stockholders' equity section of the company’s balance sheet as of December 31, 2017.
4. Record the purchase of 4,500 shares of its own common stock for $25 cash per share.
5. Record the declaration of a cash dividend of $4 per share.
6. Record the payment of the cash dividend.
7. Record the reissue of 1,688 shares of the treasury stock for $29 cash per share.
8. Record the reissue of 2,812 shares of the treasury stock for $22 cash per share.
9. Record the declaration of a cash dividend of $4 per share.
10. Record the payment of the cash dividend.
11. Record the entry to close the income summary account having a credit balance of $408,000.