Additional Brief Exercise 177 Sebastien Company earned net income of $44,000 dun

Question

Additional Brief Exercise 177 Sebastien Company earned net income of $44,000 duning 2014. The company paid dividends totaling $20,000 during the period. Prepare the entries to close Income Summary and the Dividends account. (Credit account titles are automatially indented when the amount is entered. Do not indent manually Account Titles and Explanation Debit Credit To dose net income to retained eamings.) Te dese drvidends to retained earnings Question Attempts: O of 1 used SAVE FOR LATE SUBHIY ANSWER

Explanation / Answer

Closing entry for net income:

Income summary ( net income) Dr $44,000

To Retained earnings Cr. $44,000

(Being closing entry recorded for net income)

Closing entry for Dividends paid

Retained earnings . Dr. 20,000

To dividends. Cr. 20,000

(Being dividends closing entry recorded)

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