Fick 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.

FICK PSYCHOLOGICAL SERVICES, INC.
Income Statement
For the year ended December 31, current year
Revenue:
Counseling revenue					$	330,000
Expenses:
Advertising expense	$	1,800
Salaries expense		95,000
Office supplies expense		2,700
Utilities expense		850
Malpractice insurance expense		6,000
Office rent expense		23,000
Continuing education expense		3,800
Depreciation expense: fixtures		4,500
Miscellaneous expense		6,000
Income taxes expense		29,000				172,650
Net income					$	157,350

Ficks statement of retained earnings indicates that a $6,000 cash dividend was declared and paid during the current year.

a. Prepare the necessary closing entries on December 31 of the current year.

b. If Ficks Retained earnings account had a $94,000 balance on at the beginning of the current year, at what amount should Retained Earnings be reported in the firm's year-end balance sheet dated December 31?

Journal entry worksheet

• Record the entry to close the revenue account.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
1	Counseling revenue
	Income summary

Journal entry worksheet

• Record the entry to close expense accounts.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
2	Income summary

• Record the transfer of Net income/loss.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
3

• Record the transfer of Net income/loss.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
3