Kohler Corporation reports the following components of stockholders’ equity on December 31, 2013: Common stock—$15 par value, 100,000 shares authorized, 55,000 shares issued and outstanding $ 825,000 Paid-in capital in excess of par value, common stock 80,000 Retained earnings 430,000 Total stockholders’ equity $ 1,335,000 In year 2014, 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 $408,000 credit balance (from net income) in the Income Summary account to Retained Earnings.

Kohler Corporation reports the following components of stockholders’ equity on December 31, 2013:


Common stock—$15 par value, 100,000 shares authorized, 55,000 shares issued and outstanding	$	825,000
Paid-in capital in excess of par value, common stock		80,000
Retained earnings		430,000

Total stockholders’ equity	$	1,335,000

In year 2014, 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 $408,000 credit balance (from net income) in the Income Summary account to Retained Earnings.

1. Prepare journal entries to record each of these transactions for 2014.

Explanation:

Jan.	1	Purchased treasury stock (5,500 × $20) = $110,000.

Jan.	5	Declared $4 dividend on 49,500 outstanding shares

July	6	Cash = (2,063 × $24) = $49,512.
		Treasury Stock, Common = (2,063 × $20) = $41,260.
		Paid-In Capital, Treasury Stock = (2,063 × $4) = $8,252.

Aug.	22	Cash = (3,437 × $17) = 58,429.
		Treasury Stock, Common = (3,437 × $20) = $68,740.

Sept.	5	Declared $4 dividend on 55,000 outstanding shares = $220,000.

Prepare a statement of retained earnings for the year ended December 31, 2014. (Amounts to be deducted should be indicated by a minus sign.)

Prepare the stockholders' equity section of the company’s balance sheet as of December 31, 2014.

Explanation:

Common stock ($15 par value, 100,000 shares authorized, 55,000 shares issued and outstanding) = $825,000