Must prepare the journal entry for the following information and transactions and then determine the balance of retained earnings for Dec 31 when balance on Jan 1 was (49800).

15500 shares, 9%, $50 par- preferred stock and 90000 shares, $1 par-common stock. No dividends in arrears on preferred.

1. Declare the required dividend on the preferred stock and a $.75 per share dividend on the common stock. On December 1.
2. The date of record for the dividend is declared on December 14.
3. Pay dividends declared on Dec 1 on Dec 28.
4. Close income summary account, net income for the year is 445,000.

1. This requires you to calculate the amounts of preferred dividends and common dividends. For prefrerred dividends take your number of preferred shares issued and outstanding times the percentage rate times the par value of the preferred shares. For common stock take your number of common shares issued and outstanding times the dividend amount per common share. Add the two amounts together to get your total dividends.

2. This is your declaration journal entry. Your accounts will be Dividends Declared (or other appropriately named account) and Dividends Payable.

3. This is the journal entry when you actually pay the dividends. Your accounts will be cash and dividends Payable.

4. This is your closing entry. First your will transfer Net Income to retained Earnings. Your accounts will be Income Summary and Retained Earnings. Next you will post your dividends to reduce your Retained Earnings. Your accounts will be Dividends Declared (or other appropriate named account) and Retained Earnings.