Answer and Explanation:
The journal entries are shown below:
1 Cash Dividend Dr $120,000
To Dividend Payable $120,000
(Being the dividend is declared)
2 Dividend Payable Dr $120,000
To Cash $120,000
(Being the dividend is paid)
3 Cash Dividend Dr [(320,000 - 118,000) × $2.20] $444,400
To Dividend Payable $444,400
(Being the dividend is declared)
4 Dividend Payable Dr $444,400
To Cash $444,400
(Being the dividend is paid)
Now the preparation of the retained earning statement is presented below:
Sneer Corporation
Retained Earning statement
For the year ended December 31
Beginning balance of retained earning $820,000
Add: Net income $320,000
Less: Cash Dividend paid -$564,400 ($120,000 + $444,400)
Ending balance of retained earning $575,600
And, the journal entry to close the dividend account is
Retained Earnings Dr ($120,000 + $444,400) $564,400
To Cash Dividends $564,400
(Being the closing entry for dividend is closed)