The annual report for Sneer Corporation disclosed that the company declared and paid preferred dividends in the amount of $200,000 in the current year. It also declared and paid dividends on common stock in the amount of $3.00 per share. During the current year, Sneer had 1 million common shares authorized; 400,000 shares had been issued; and 190,000 shares were in treasury stock. The opening balance in Retained Earnings was $900,000 and Net Income for the current year was $400,000. Required:

1. Prepare journal entries to record the declaration, and payment, of dividends on (a) preferred and (b) common stock.
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.