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
When an economy operates at its long-run potential output level,?
zaharov [31]
The economy is in equilibrium, and the natural and real or actual rates of unemployment will be equal. 

In order for an economy to operate at its long-run potential output level, it must be equilibrium, and the economy is balanced in its production. Unemployment is one measure of an economy's equilibrium with the natural and actual rates as two benchmarks rates that must be calibrated towards equilibrium. 
8 0
3 years ago
Which of the following types of production would most likely use job-order costing? A. Construction of custom homes B. Farming C
nignag [31]

Answer:

A and C

Explanation:

Construction of custom homes and

Manufacturing of heavy-duty machinery would most likely make use of job order costing.

Job Order Costing is useful for allocating costs based on a specific job order. It is a system that assigns and accumulates what it costs to manufacture an individual unit of output.

manufacturing businesses that use this system are clothing factories, food companies, air craft manufacturing companies.

service businesses that use the system include movie producers, accounting firms, law firms, hospitals etc.

5 0
3 years ago
The following labor standards have been established for a particular product:Standard labor hours per unit of output 4.3 hoursSt
Nat2105 [25]

Answer: 1. $690 (favorable)

2.  $9045 (favorable)

Explanation: These can be computed as follows :-

Labor rate variance = Actual labor cost - (standard rate * actual hours)

                                  =  $139,380 - ( $20.1 * 6900 hours )

                                  = $690 (favorable)

.

Labor efficiency variance = ( Actual hours - standard hours ) * (standard rate )

                                          = [6900 hours - (1500 units * 4.3 hours) ] * ($20.1)

                                          = $9045 (favorable)

7 0
3 years ago
The notes to a recent annual report from Weebok Corporation indicated that the company acquired another company, Sport Shoes, In
navik [9.2K]

Answer:

$221,500

Explanation:

The computation of the amount of the goodwill is shown below:

Goodwill = Acquiring value - fair market value of all assets

where,

Acquiring value = $502,000

And, the fair market value of all assets is

= Account receivable market value + inventory market value + fixed assets market value + other assets market value

= $35,000 + $183,000 + $46,500 + $16,000

= $280,500

So, the goodwill is

= $502,000 - $280,500

= $221,500

3 0
3 years ago
Salad Express exchanged land it had been holding for future plant expansion for a more suitable parcel of land along distributio
r-ruslan [8.4K]

Answer:

1.  $173,500

2. $ 71,000

Explanation:

Requirement 1: Solution

We can calculate the fair value of new parcel of land just by adding the current market price with additional cash paid to complete the transaction

Fair Value = Current market price + cash paid additionally

Fair Value = $150,000+$23,500

Fair value = $173,500

Requirement 2: Solution

We need to calculate Gain/loss on exchange first in order to record them on books. This can be done by just subtracting the land's book value from the current market price of land

Gain/loss on exchange = Current market price - book value

Gain/loss on exchange = $150,000 - $79,000

Gain/loss on exchange = $71,000

Entries:               Debit                          Credit  

New land           $173,500

Old land                                                 $79000

Cash                                                       $23,500

Gain                                                        $71,000

5 0
3 years ago
Other questions:
  • Section 1239 recharacterizes gain on the sale of depreciable property to related person as ordinary income.
    6·1 answer
  • Brittney is interested in the relationship between caloric intake and emotional arousal. She creates a carefully measured array
    11·1 answer
  • Helen, age 17. wanted to buy a Harley-Davidson "Sportster" motorcycle. She did not have the funds to pay cash butpersuaded the d
    9·1 answer
  • Identify whether each of the following transactions will take place in an input market or in an output market, and whether firms
    8·1 answer
  • "if a price ceiling on physician services is going to be effective, it must be set ______ the competitive market equilibrium pri
    5·1 answer
  • Moki Hunt recently purchased Swift Waters Adventures, a kayaking and canoeing rental business near the Salt River in Arizona. Sw
    11·1 answer
  • Which particular demographic do you think has the most effect on consumer purchasing decisions? Explain.
    12·1 answer
  • An
    7·1 answer
  • A corporation declares $25 million in net income, $1 million in preferred stock dividends, and $7 million in common stock divide
    8·1 answer
  • When meeting someone from a different culture it is more useful to focus on ________, or central tendencies and patterns within
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!