The annual report for Sneer Corporation disclosed that the company declared and paid preferred dividends in the

Question:

The annual report for Sneer disclosed that the company declared and paid preferred dividends in the amount of $ 100,000 in the current year. It also declared and paid dividends on in the amount of $ 2 per share. During the current year, Sneer had 1 million common shares authorized; 300,000 shares had been issued; and 100,000 shares were in treasury stock. The opening balance in Retained Earnings was $ 800,000 and Net Income for the current year was $ 300,000.
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.
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
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