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, 2007
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 2007.

a. Prepare the necessary closing entries on December 31. 2007.

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b. If the firm’s Retained Earnings account had a $92,000 balance on January 1,2007. at what amount should Retained Earnings be reported in the firm’s balance sheet dated December .31. 2007?