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?