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The closing entries show a debit to retained earnings of $350, and a credit to retained earnings of $750. There was also a credit to dividends payable of $100. This company had a:

Respuesta :

jepessoa

Answer:

net income = $400

Explanation:

closing entries:

Dr Retained earnings 350

    Cr Income summary 350

Dr Income summary 750

    Cr Retained earnings 750

Dr Retained earnings 100

   Cr Dividends 100

net income = $750 - $350 = $400

Dividends reduce retained earnings, but net income must exist before any dividends can be distributed.

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