The annual report for Sneer Corporation disclosed that the company declared and paid preferred dividends in the amount of $260,000 in the current year. It also declared and paid dividends on common stock in the amount of $1.40 per share. During the current year, Sneer had 1 million common shares authorized; 460,000 shares had been issued; and 244,000 shares were in treasury stock. The opening balance in Retained Earnings was $740,000 and Net Income for the current year was $240,000. 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.
The annual report for Sneer Corporation disclosed that the company declared and paid preferred dividends in the amount of $260,000 in the current year. It also declared and paid dividends on common stock in the amount of $1.40 per share. During the current year, Sneer had 1 million common shares authorized; 460,000 shares had been issued; and 244,000 shares were in treasury stock. The opening balance in Retained Earnings was $740,000 and Net Income for the current year was $240,000. 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![E11-11 (Algo) 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
$260,000 in the current year. It also declared and paid dividends on common stock in the amount of $1.40 per share. During the
current year, Sneer had 1 million common shares authorized; 460,000 shares had been issued; and 244,000 shares were in treasury
stock. The opening balance in Retained Earnings was $740,000 and Net Income for the current year was $240,000.
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.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
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.)
View transaction list
Journal entry worksheet
1
Required 3
2
3
4
Record the declaration of a cash dividend of $260,000 to the preferred
stockholders.
Note: Enter debits before credits.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6e0fefd6-f6db-496c-9a39-e894d1c47056%2F946a3981-24ed-417e-a7f3-816a514ba8fe%2Fsbs3qeo_processed.jpeg&w=3840&q=75)
Transcribed Image Text:E11-11 (Algo) 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
$260,000 in the current year. It also declared and paid dividends on common stock in the amount of $1.40 per share. During the
current year, Sneer had 1 million common shares authorized; 460,000 shares had been issued; and 244,000 shares were in treasury
stock. The opening balance in Retained Earnings was $740,000 and Net Income for the current year was $240,000.
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.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
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.)
View transaction list
Journal entry worksheet
1
Required 3
2
3
4
Record the declaration of a cash dividend of $260,000 to the preferred
stockholders.
Note: Enter debits before credits.
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