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(d) Prepare closing entries for net income and cash dividends. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order displayed in the problem statement.) Date Account Titles and Explanation Debit Credit (To close net income/(loss)) (To close Cash Dividends to Retained Earnings)

(d) Prepare closing entries for net income and cash dividends. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order displayed in the problem statement.) Date Account Titles and Explanation Debit Credit (To close net income/(loss)) (To close Cash Dividends to Retained Earnings)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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After establishing their company's fiscal year-end to be October 31, Natalie and Curtis begin operating Cookie & Coffee Creations Inc. on November 1, 2022. On that date, after the issuance of shares, the paid-in capital section of the company's balance sheet is as follows Paid-in capital Preferred stock, $0.50 noncumulative, no par value, $11.200 11,200 shares authorized, 2,240 issued Common stock, no par value, 112,000 shares authorized, 29,048 issued 29,048 Cookie & Coffee Creations then has the following selected transactions during its first year of operations. 2022 Dec. 1 Issues an additional 896 preferred shares to Natalie's brother for $4,480. 2023 Apr. 30 Declares a semiannual dividend to the preferred stockholders of record on May 15, payable on June 1. Repurchases 840 shares of common stock issued to the lawyer, for $560. Recall that these were originally issued for $840. The lawyer had decided to retire and wanted to liquidate all of her assets. June 30 The company has had a very successful first year of operations. It earned revenues of $518,000 and incurred operating expenses of $414,400 (including $765 legal fee, but excluding income tax). Oct. 31 31 Records income tax expense. (The company has a 20% income tax rate.) 31 Declares a semiannual dividend to the preferred stockholders of record on November 15. payable on December 1. Date ACCount Tities and Explanation Debit Creait 122 Dec 1 Cash 4,480 Preferred Stock 4,480 123 Apr. 30 Cash Dividends 784 Dividends Payable 784 June 1 Dividends Payable 784 Cash 784 June 30 v Treasury Stock 560 Cash 560 Oct. 31 Income Tax Expense 20,720 Income Taxes Payable 20,720 (To record income tax expense) Oct. 31 Cash Dividends 784 Dividends Payable 784 (To record dividend declared)
Transcribed Image Text:After establishing their company's fiscal year-end to be October 31, Natalie and Curtis begin operating Cookie & Coffee Creations Inc. on November 1, 2022. On that date, after the issuance of shares, the paid-in capital section of the company's balance sheet is as follows Paid-in capital Preferred stock, $0.50 noncumulative, no par value, $11.200 11,200 shares authorized, 2,240 issued Common stock, no par value, 112,000 shares authorized, 29,048 issued 29,048 Cookie & Coffee Creations then has the following selected transactions during its first year of operations. 2022 Dec. 1 Issues an additional 896 preferred shares to Natalie's brother for $4,480. 2023 Apr. 30 Declares a semiannual dividend to the preferred stockholders of record on May 15, payable on June 1. Repurchases 840 shares of common stock issued to the lawyer, for $560. Recall that these were originally issued for $840. The lawyer had decided to retire and wanted to liquidate all of her assets. June 30 The company has had a very successful first year of operations. It earned revenues of $518,000 and incurred operating expenses of $414,400 (including $765 legal fee, but excluding income tax). Oct. 31 31 Records income tax expense. (The company has a 20% income tax rate.) 31 Declares a semiannual dividend to the preferred stockholders of record on November 15. payable on December 1. Date ACCount Tities and Explanation Debit Creait 122 Dec 1 Cash 4,480 Preferred Stock 4,480 123 Apr. 30 Cash Dividends 784 Dividends Payable 784 June 1 Dividends Payable 784 Cash 784 June 30 v Treasury Stock 560 Cash 560 Oct. 31 Income Tax Expense 20,720 Income Taxes Payable 20,720 (To record income tax expense) Oct. 31 Cash Dividends 784 Dividends Payable 784 (To record dividend declared)
(d). Prepare closing entries for net income and cash dividends. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order displayed in the problem statement.) Date Account Titles and Explanation Debit Credit (To close net income/ (loss)) (To close Cash Dividends to Retained Earnings)
Transcribed Image Text:(d). Prepare closing entries for net income and cash dividends. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order displayed in the problem statement.) Date Account Titles and Explanation Debit Credit (To close net income/ (loss)) (To close Cash Dividends to Retained Earnings)
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