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Retained earnings: Prepare the Closing Entry

Retained earnings at 1/1/10 was $100,000 and at 12/31/10 it was $210,000. During 2010, cash dividends of $50,000 were paid and a stock dividend of $40,000 was issued. Both dividends were properly charged to retained earnings.

You are to provide the missing closing entry. Please indicate DR (debit) or CR (credit) to the left of the account title, and place a comma between the account title and the amount of the adjustment.

Solution Preview

The entry will be as follows..

Debit - Income Statement/Summary - ...

Solution Summary

The solution provides closing entry for retained earning.