Answer Happy

Kohler Corporation reports the following components of stockholders' equity at December 31 of the prior year. Common stock-$25 par value, 100,000 shares authorized, 55,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity During the current year, the following transactions affected its stockholders' equity accounts. January 2 Purchased 6,000 shares of its own stock at $25 cash per share. January 5 February 28 July 6 August 22 September 5 $ 1,375,000 60,000 430,000 $1,865,000 Directors declared a $4 per share cash dividend payable on February 28 to the February 5 stockholders of record. Paid the dividend declared on January 5. Sold 3,000 of its treasury shares at $29 cash per share. Sold 3,000 of its treasury shares at $21 cash per share. Directors declared a $4 per share cash dividend payable on October 28 to the September 25 stockholders of record. October 28 Paid the dividend declared on September 5. December 31 Closed the $368,000 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 current year ended December 31. 3. Prepare the stockholders' equity section of the balance sheet as of December 31 of the current year.