Sneer Corporation declared and paid preferred dividends in the amount of $130,000 in the current year. It also declared and paid dividends on common stock in the amount of $2.30 per share. During the current year, Sneer had 1 million common shares authorized; 330,000 shares had been issued; and 127,000 shares were in treasury stock. The opening balance in Retained Earnings was $830,000 and Net Income for the current year was $330,000. Required:
a. Prepare journal entries to record the declaration, and payment, of dividends on (a) preferred and (b) common stock.
b. Using the information given above, prepare a statement of retained earnings for the year ended December 31.
c. Prepare a journal entry to close the dividends account.