Question

Kohler Corporation reports the following components of stockholders’ equity on December 31, 2015:

Common stock—$20 par value, 100,000 shares authorized, 45,000 shares issued and    outstanding	$	900,000
Paid-in capital in excess of par value, common stock		70,000
Retained earnings		370,000
Total stockholders’ equity	$	1,340,000

In year 2016, the following transactions affected its stockholders’ equity accounts.
Jan.	1		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 Feb. 28 to the Feb. 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 $368,000 credit balance (from net income) in the Income Summary account to Retained Earnings.

2.	Prepare a statement of retained earnings for the year ended December 31, 2016. (Amounts to be deducted should be indicated by a minus sign.)

KOHLER CORPORATION
Statement of Retained Earnings
For Year Ended December 31, 2016
Retained earnings, Dec. 31, 2015	$370,000
Add: Net income	368,000
	738,000
Less: Cash dividends declared
Less: Treasury stock reissuances
Retained earnings, Dec. 31, 2016	$738,000

Answer 1