Seduction Interiors has the following balances before closing entries are performed:
Retained Earnings ........$5,000
Fees Earned .........$25,000
Salaries expense ........$17,000
Operating expenses ......$12,000
Dividends distributed .....$7,000
The company's bookkeeper prepares the closing entries and becomes concerned.
a. Prepare the closing entries for the company.
b. What caused the bookkeeper concern?
c. Should the company had paid dividends during the year?
d. What can the shareholders do?