For the year ended December 31, 2014, Huron Lake Enterprises Ltd. had the following revenues and expenses:

Question:

For the year ended December 31, 2014, Huron Lake Enterprises Ltd. had the following revenues and expenses: Sales, $745,000; Cost of Goods Sold, $450,000; Operating Expenses $135,000; and Income Tax Expense, $35,000. The company also declared $25,000 of dividends to the common shareholders on each of June 30 and December 31. The dividend declared on December 31 will be paid on January 10, 2015.

(a) Prepare closing entries.

(b) Post the entries to the Retained Earnings account assuming the balance in that account on December 31, 2013, was $382,000.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...