The Top Hat, Inc., is a chain of magic shops that is organized as a corporation. During

Question:

The Top Hat, Inc., is a chain of magic shops that is organized as a During the month of June, the stockholders’ equity accounts of The Top Hat were affected by the following events:
June 3 The sold 1,000 shares of capital stock at $20 per share.
June 10 The declared a 25 cents per share on its 20,000 shares of outstanding capital stock, payable on June 23.
June 23 The paid the declared on June 10.
June 30 The Income Summary account showed a credit balance of $60,000; the corporation’s accounts are closed monthly.

Instructions
a. Prepare journal entries for each of the above events in the accounts of The Top Hat. Include the entries necessary to close the Income Summary and Dividends accounts.
b. Prepare a statement of retained earnings for June. Assume that the balance of retained earnings on May 31 was $520,000.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...