Hanna Sports is a retailer that specializes in athletic equipment. The corporate strategy is to focus on towns with a population of less than 25,000 people, thereby avoiding head-to-head competition with large retail chains. Following is Hanna's adjusted trial balance for the year 20X7. Hanna's ending inventory is $525,525.

(a) Prepare a comprehensive income statement.

(b) Prepare closing entries.

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HANNA SPORTS CORPORATION Adjusted Trial Balance As of December 31, 20X7 Debits Credits Cash $ 644,909 Accounts receivable Inventory, Jan. 1 333,654 433,477 Equipment Accumulated depreciation Accounts payable 488,765 $144,895 111,888 Loan payable Capital stock 500,900 250,000 Retained earnings, Jan. 1 322,433 Dividends 25,000 Sales 3,665,667 Sales discounts 23,112 Sales returns and allowances 144,367 Purchases 2,198,560 Purchase discounts 114,432 Purchase returns and allowances 26,341