Gerdes Psychological Services, Inc., closes its temporary accounts once each year on December 31. The company recently issued the following income statement as part of its annual report:

The firm’s statement of retained earnings indicates that a $6,000 cash dividend was declared and paid during 2015.

a. Prepare the necessary closing entries on December 31, 2015.

b. If the firm’s Retained Earnings account had a $92,000 balance on January 1, 2015, at what amount should Retained Earnings be reported in the firm’s balance sheet dated December 31, 2015?

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GERDES PSYCHOLOGICAL SERVICES, INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2015 Revenue: $225,000 Counseling revenue Expenses: Advertising expense. Salaries expense... Office supplies expense Utilities expense. Malpractice insurance expense Office rent expense... Continuing education expense. Depreciation expense: fixtures. Miscellaneous expense Income taxes expense $ 1,800 94,000 1,200 850 6,000 24,000 2,650 4,500 6,000 29,400 170,400 $ 54,600 Net income..