Gerdes Psychological Services, Inc., closes its temporary accounts once each year on December 31. The company recently
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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: |
GERDES PSYCHOLOGICAL SERVICES, INC. Income Statement For the Year Ended December 31, 2015 | ||||
Revenue: | ||||
Counseling revenue | $ | 225,000 | ||
Expenses: | ||||
Advertising expense | $ | 1,800 | ||
Salaries expense | 94,000 | |||
Office supplies expense | 1,200 | |||
Utilities expense | 850 | |||
Malpractice insurance expense | 6,000 | |||
Office rent expense | 24,000 | |||
Continuing education expense | 2,650 | |||
Depreciation expense: fixtures | 4,500 | |||
Miscellaneous expense | 6,000 | |||
Income taxes expense | 29,400 | 170,400 | ||
Net income | $ | 54,600 | ||
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. |
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