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, CURRENT YEAR $270,000 Revenue: Counseling revenue ......... Expenses: Advertising expense........... ........... Salarles expense. Office supplies expense Utilities expense. Malpractice Insurance expense ........... Office rent expense ............ Continuing education expense............. Depreciation expense: fixtures.. Miscellaneous expense.................................... Income taxes expense......................... ... Net Income........ $ 2.160 112.800 1,440 1,020 7,200 28,800 3,180 5,400 7,200 35,280 PE S C I ALLIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204,480 $ 65,520 The firm's statement of retained earnings indicates that a $7,200 cash dividend was declared and paid during the current year. a. Prepare the necessary closing entries on December 31, current year. b. If the firm's Retained Earnings account had a $110,400 balance on January 1, current year, at what amount should Retained Earnings be reported in the firm's balance sheet dated December 31, current year