Below is the adjusted trial balance for Anna Pavlova Company on... Below is the adjusted trial balance for Anna Pavlova Company on December 31, Year Two.

Anna Pavlova

Company Trial Balance

December 31, Year Two

Debit Credit

Cash 13,400

Accounts Receivable 8,800

Inventory 12,250

Supplies 3,200

Investments 23,000

Land 50,000

Accounts Payable 15,000

Salaries Payable 9,250

Capital Stock 20,000

Retained Earnings 1/1/Year Two 33,000

Sales Revenue 97,200

Service Revenue 43,000

Interest Revenue 1,200

Cost of Goods Sold 43,000

Salary Expense 37,800

Insurance Expense 12,000

Advertising Expense 1,350

Supplies Expense 5,150

Rent Expense 6,700

Dividends 2,000

$ 218,650

$ 218,650

1. Prepare the closing entries for December 31, Year Two.

2. What is the amount of net income for year two?

3. Why are dividends not included in the net income calculation?

4. is the balance in retained earnings after the closing entries?