(Learning Objective 5: Making closing entries; evaluating retained earnings) The accounts of Sunny Stream Service, Inc., at March 31, 20X6, are listed in alphabetical order.

❙ Requirements 1. All adjustments have been journalized and posted, but the closing entries have not yet been made. Journalize Sunny Stream’s closing entries at March 31, 20X6.

2. Set up a T-account for Retained Earnings and post to that account. Then compute Sunny Stream’s net income for 20X6. What is the ending balance of Retained Earnings?

3. Did Retained Earnings increase or decrease during the year? What caused the increase or decrease?