Kennington Company had a net income of $90,000 and paid cash dividends of $18,000 for 20--. Mueller and Hanson Company had a net loss of $18,000 and distributed a 10% stock dividend with a market value of $17,000.

Required:

	1. Prepare the journal entries for Kennington as of December 31, 20--, to close Income Summary and Cash Dividends into Retained Earnings.
	2. Prepare the journal entries for Mueller and Hanson as of December 31, 20--, to close Income Summary and Stock Dividends into Retained Earnings.

CHART OF ACCOUNTS

General Ledger

	ASSETS
101	Cash
122	Accounts Receivable
141	Supplies
181	Office Equipment

	LIABILITIES
202	Accounts Payable
204	Income Tax Payable
205	Common Dividends Payable
206	Preferred Dividends Payable
219	Wages Payable

	EQUITY
321	Common Stock
323	Preferred Stock
325	Stock Dividends Distributable
331	Retained Earnings
333	Cash Dividends
334	Stock Dividends
399	Income Summary

	REVENUE
401	Sales

	EXPENSES
511	Wages Expense
512	Advertising Expense
513	Bank Credit Card Expense
514	Store Supplies Expense
515	Travel and Entertainment Expense
549	Miscellaneous Expense
555	Income Tax Expense

1. Prepare the journal entries for Kennington as of December 31, 20--, to close Income Summary and Cash Dividends into Retained Earnings.

General Journal Instructions

PAGE 1

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4

2. Prepare the journal entries for Mueller and Hanson as of December 31, 20--, to close Income Summary and Stock Dividends into Retained Earnings.

PAGE 1

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4