E11-11 Recording Dividends and Preparing a Statement of Retained Earnings [LO 11-2, LO 11-3]

The annual report for Sneer Corporation disclosed that the company declared and paid preferred dividends in the amount of $210,000 in the current year. It also declared and paid dividends on common stock in the amount of $1.90 per share. During the current year, Sneer had 1 million common shares authorized; 410,000 shares had been issued; and 199,000 shares were in treasury stock. The opening balance in Retained Earnings was $790,000 and Net Income for the current year was $290,000.

Required:

1.	Prepare journal entries to record the declaration, and payment, of dividends on (a) preferred and (b) common stock. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

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

3.	Prepare a journal entry to close the dividends account. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)