Question

following are accounts and year-end adjusted balances of cruz company as of december 31.
number account title debit credit
101 cash $ 18,000
126 supplies 14,300
128 prepaid insurance 2,000
167 equipment 23,000
168 accumulated depreciation—equipment $ 8,500
307 common stock 9,575
318 retained earnings 39,600
319 dividends 6,000
483 services revenue 35,000
612 depreciation expense—equipment 2,000
622 salaries expense 20,405
637 insurance expense 1,470
640 rent expense 2,345
652 supplies expense 1,155
totals $ 90,675 $ 90,675
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prepare the december 31 closing entries. the account number for income summary is 901.
view transaction list
journal entry worksheet
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record the entry to close the dividends account.
note: enter debits before credits.
date general journal debit credit
december 31
record entry clear view general journal

Explanation:

Step1: Identify the accounts involved

To close the dividends account, we need to transfer the balance of the Dividends account (a temporary account) to Retained Earnings. The Dividends account has a debit balance of $6,000 (from the adjusted balances).

Step2: Determine the journal entry

• We debit Retained Earnings (because dividends decrease retained earnings) for the amount of dividends, which is $6,000.
• We credit Dividends to zero out its balance (since it's a temporary account and we are closing it).

Journal Entry:

Date	General Journal	Debit	Credit
	Dividends		6,000

Answer:

The closing entry for the dividends account is: Debit Retained Earnings $6,000; Credit Dividends $6,000.