1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
vivado [14]
3 years ago
12

Kohler Corporation reports the following components of stockholders’ equity at December 31, 2018. Common stock—$20 par value, 10

0,000 shares authorized, 60,000 shares issued and outstanding $ 1,200,000 Paid-in capital in excess of par value, common stock 70,000 Retained earnings 400,000 Total stockholders' equity $ 1,670,000 During 2019, the following transactions affected its stockholders’ equity accounts. Jan. 2 Purchased 5,000 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 1,875 of its treasury shares at $24 cash per share. Aug. 22 Sold 3,125 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. Required: 1. Prepare journal entries to record each of these transactions. 2. Prepare a statement of retained earnings for the year ended December 31, 2019. 3. Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2019.
Business
1 answer:
gogolik [260]3 years ago
3 0

Answer:

1. See the attached excel file for the journal entries.

2. Ending balance of retained earning is $346,125

3.Total Stockholder's Equity is $1,616,125

Explanation:

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

Note: See the attached excel file for the journal entries.

The following are tge workings:

w.1: Treasury stock = $5,000 * $20 = $10,000

w.2: Dividend payable = (Issued and outstanding shares - Shares repurchase) * Dividend per share = (60,000 - 5,000) * $4 = 55,000 * $4 = $220,000

w.3: Cash = Number of shares sold * Selling price per share = 1,875 * $24 = $45,000

w.4 = Treasury stock = Number of shares sold * Treasury price per share = 1,875 * $20 = $37,500

w.5: Additional paid in capital = Number of shares sold * (Selling price per share - Treasury price per share) = 1,875 * ($24 - $20) = $7,500

w.6: Cash = Number of shares sold * Selling price per share = 3,125 * $17 = $53,125

w.7 = Treasury stock = Number of shares sold * Treasury price per share = 3,125 * $20 = $62,500

w.8: Balancing figure = Treasury stock (w.7) – Cash (w.7) - Additional paid in capital (w.5) = $62,500 - $53,125 - $7,500 = $1,875

w.9: Dividend payable = (Issued and outstanding shares * Dividend per share = 60,000 * $4 = $240,000

2. Prepare a statement of retained earnings for the year ended December 31, 2019.

Kohler Corporation

Statement of Retained Earnings

On December 31, 2019

<u>Particulars                                                  Amount ($)  </u>

Opening balance                                       400,000

Income for the year                                    408,000  

Dividend Paid (220,000 + 240,000)        (460,000)

Loss on sale of treasury stock               <u>        (1,875)    </u>

Ending balance                                     <u>      346,125   </u>

3. Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2019.

Kohler Corporation

Stockholder Equity Section of Balance sheet

At December 31, 2019

<u>Particulars                                                        Amount ($)</u>

Common stock issued ($20 * 60,000)               1,200,000

Paid-in capital in excess of par v - c. stock     <u>        70,000  </u>

Total contributed Capital                                     1,270,000

Retained Earnings                                      <u>      346,125  </u>

Total Stockholder's Equity                             <u>     1,616,125  </u>

Download xlsx
You might be interested in
Sampson Co. sold merchandise to Batson Co. on account, $46,000, terms 2/15, net 45. The cost of the merchandise sold is $38,500.
Wewaii [24]

Answer:

Sampson Company

Dr Accounts Receivable -Batson Co.45,080

Cr Sales 45,080

Dr Cost of Merchandise Sold38,500

Cr Merchandise Inventory38,500

Dr Cash 45,080

Cr Accounts Receivable-Batson Co.45,080

Batson Company

Dr Merchandise Inventory45,080

Cr Accounts Payable - Sampson Co.45,080

Dr Accounts Payable -Sampson Co.45,080

Cr Cash45,080

Explanation:

Preparation of the Journal entries for both Sampson and Batson Companies would record

Based on the information given we were told that Sampson Company sold merchandise to Batson Company At the amount of $46,000 with 2/15 term while the merchandise was sold at the amount of $38,500 and since we are Assuming that both of them uses a perpetual inventory system this means the transaction will be recorded as:

Journal Entries for Sampson Company

Dr Accounts Receivable -Batson Co.45,080

Cr Sales 45,080

(2%*46,000=920)

(45,000-920=45,080)

Dr Cost of Merchandise Sold38,500

Cr Merchandise Inventory38,500

Dr Cash 45,080

Cr Accounts Receivable-Batson Co.45,080

Journal Entries for Batson Company

Dr Merchandise Inventory45,080

Cr Accounts Payable - Sampson Co.45,080

(2%*46,000=920)

(45,000-920=45,080)

Dr Accounts Payable -Sampson Co.45,080

Cr Cash45,080

(2%*46,000=920)

(45,000-920=45,080)

6 0
3 years ago
A small Canadian firm that has developed some valuable new medical products using its unique biotechnology know-how is trying to
nasty-shy [4]

Answer:

Correct Answer:

a. Manufacture the product at home and let foreign sales agents handle marketing.

Explanation:

For the small Canadian company, manufacturing the product at home (Canada) would afford them the opportunity to protect their new medical product from piracy. Also, they would be able to receive tax incentives from their government as well file for patent of their new innovation.

<em>The foreign agent would strictly be focused on the marketing of the finished product without having access to the detailed information of the product.</em>

8 0
2 years ago
Sterling Company paid $1,200 for 3 months of rent on April 1 of the current year. On April 30, Sterling Company made an adjustin
irina [24]

Explanation:

the rent start on February first and paid 400 the expense rent are for 29 days on 13.7 USD per day

3 0
2 years ago
Which of the following statements is the most accurate?Consumers don't remember good advertisements.Advertising does not really
Alik [6]

Answer:

The correct answer is that the Advertising helps in paying for the production cost of the magazines and the newspapers.

Explanation:

Advertising is the source through which the company or the firm promote the product or a service of their business, so that the customers could be make aware of the products and the services offered by the firms.

And one of the benefits or the advantage provided by advertising that the money from advertisers help in paying the production cost of the magazines and the newspapers.

5 0
3 years ago
3. A politician makes the following argument: The economy would operate more efficiently if structural unemployment is completel
diamong [38]

Answer:

Agree with the statement.

Explanation:

Structural unemployment refers to the mismatch of the abilities of the workforce of the economy with the changing ability requirements demanded by the industries in the economy.

This mainly happens because of the new technological innovations and the obsolete education system in a country. One a new technology or a new innovation comes in, the knowledge and the experience possessed by the workers become obsolete.

To eliminate the structural unemployment, the education system, higher education system, professional education system and national employee training and development policies has to be changed and updated accordingly with the changing global market skills demand.

6 0
3 years ago
Other questions:
  • Randy is shopping for an all-in-one printer/copier/scanner/fax machine. he decides to purchase a certain model because it has th
    13·1 answer
  • Even though federal law mandates that workers and firms each pay half of the total fica tax, the tax burden may not fall equally
    12·1 answer
  • 9. Which of the following is an example of secondary research?
    8·1 answer
  • Selected accounts with a credit amount omitted are as follows:
    6·1 answer
  • In your research project on tourism, you must collect data before the tourist season ends because the project requires interview
    11·2 answers
  • You have an outstanding balance on your credit card of $10,000. You can pay off the balance if you make 36 monthly payments of $
    13·1 answer
  • Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $45,000. If the
    8·1 answer
  • In the case of ________, it was determined that a test for promotion of firefighters to certify test scores was discarded becaus
    5·1 answer
  • Thomas is concerned about his company's ability to pay off its short-term debts. If he wants to know more about his company's li
    5·1 answer
  • An analyst gathered the following information about a company for a fiscal year: QuarterPurchases in UnitsCost per UnitPurchases
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!