Kohler Corporation reports the following components of stockholders’ equity on December 31, 2015:
Common stock—$20 par value, 100,000 shares authorized, 50,000 shares issued and outstanding $ 1,000,000
Paid-in capital in excess of par value, common stock 70,000
Retained earnings 430,000 Total stockholders’ equity $ 1,500,000
In year 2016, the following transactions affected its stockholders’ equity accounts.
Jan. 1 Purchased 4,000 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 1,500 of its treasury shares at $24 cash per share.
Aug. 22 Sold 2,500 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 for 2016.
2. Prepare a statement of retained earnings for the year ended December 31, 2016.
3. Prepare the stockholders' equity section of the company’s balance sheet as of December 31, 2016.