The annual report for Sneer Corporation disclosed that the company declared and paid preferred dividends in...

The annual report for Sneer Corporation disclosed that the company declared and paid preferred dividends in the amount of $200,000 in the current year. It also declared and paid dividends on common stock in the amount of $3.00 per share. During the current year, Sneer had 1 million common shares authorized; 400,000 shares had been issued, and 190,000 shares were in treasury stock. The opening balance in Retained Earnings was $900,000 and Net Income for the current year was $400,000.

Required:

1. Prepare journal entries to record the declaration, and payment, of dividends on (a) preferred and (b) common stock.

a. Record the declaration of a cash dividend of $200,000 to the preferred stockholders.

b. Record the payment of the cash dividend to the preferred stockholders.

c. Record the declaration of a cash dividend of $3.00 per share to the common stockholders payable on the shares outstanding.

d. Record the payment of the cash dividend to the common stockholders.

2. Using the information given above, prepare a statement of retained earnings for the year ended December 31.

SNEER CORPORATION
Statement of Retained Earnings
For the Year Ended December 31
Retained Earnings, January 1



Retained Earnings, December 31

3. Prepare a journal entry to close the dividends account (Record the entry to close the dividends account).

Transaction	General Journal	Debit	Credit
1

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ekkarill92 answered 10 months ago

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