Kohler corporation reports the following components of stockholders’ equity on december 31, 2017. common stock—$10 par value, 100,000 shares authorized, 40,000 shares issued and outstanding $ 400,000 paid-in capital in excess of par value, common stock 60,000 retained earnings 270,000 total stockholders' equity $ 730,000 in year 2018, 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 $2 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 1,500 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 $2 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 $388,000 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 2018.
2. prepare a statement of retained earnings for the year ended december 31, 2018.
3. prepare the stockholders’ equity section of the company’s balance sheet as of december 31, 2018.

On july 1, 2016, killearn company acquired 103,000 of the outstanding shares of shaun company for $21 per share. this acquisition gave killearn a 40 percent ownership of shaun and allowed killearn to significantly influence the investee's decisions. as of july 1, 2016, the investee had assets with a book value of $6 million and liabilities of $1,468,500. at the time, shaun held equipment appraised at $140,000 above book value; it was considered to have a seven-year remaining life with no salvage value. shaun also held a copyright with a five-year remaining life on its books that was undervalued by $562,500. any remaining excess cost was attributable to goodwill. depreciation and amortization are computed using the straight-line method. killearn applies the equity method for its investment in shaun. shaun's policy is to declare and pay a $1 per share cash dividend every april 1 and october 1. shaun's income, earned evenly throughout each year, was $580,000 in 2016, $606,600 in 2017, and $649,200 in 2018. in addition, killearn sold inventory costing $93,000 to shaun for $155,000 during 2017. shaun resold $97,500 of this inventory during 2017 and the remaining $57,500 during 2018.a. determine the equity income to be recognized by killearn during each of these years. 2016 2017 2018b. compute killearn’s investment in shaun company’s balance as of december 31, 2018.

The stock of grommet corporation, a u.s. company, is publicly traded, with no single shareholder owning more than 5 percent of its outstanding stock. grommet owns 95 percent of the outstanding stock of staple inc., also a u.s. company. staple owns 100 percent of the outstanding stock of clip corporation, a canadian company. grommet and clip each own 50 percent of the outstanding stock of fastener inc., a u.s. company. grommet and staple each own 50 percent of the outstanding stock of binder corporation, a u.s. company. which of these corporations form an affiliated group eligible to file a consolidated tax return?

Assume the perpetual inventory method is used. 1) the company purchased $12,500 of merchandise on account under terms 2/10, n/30. 2) the company returned $1,200 of merchandise to the supplier before payment was made. 3) the liability was paid within the discount period. 4) all of the merchandise purchased was sold for $18,800 cash. what effect will the return of merchandise to the supplier have on the accounting equation?