Hanna Sports is a retailer that specializes in athletic equipment. The corporate strategy is to focus on towns with a population of less than 25,000 people, thereby avoiding head-to-head competition with large retail chains. Following is Hanna's adjusted trial balance for the year 20X7. Hanna's ending inventory is $525,525. HANNA SPORTS CORPORATION Adjusted Trial Balance As of December 31, 20X7 Debits Credits Cash $ 644,909 $ - Accounts receivable 333,654 - Inventory, Jan. 1 433,477 - Equipment 488,765 - Accumulated depreciation - 144,895 Accounts payable - 111,888 Loan payable - 500,900 Capital stock - 250,000 Retained earnings, Jan. 1 - 322,433 Dividends 25,000 - Sales - 3,665,667 Sales discounts 23,112 - Sales returns and allowances 144,367 - Purchases 2,198,560 - Purchase discounts - 114,432 Purchase returns and allowances - 26,341 Freight-in 73,091 - Selling expenses 185,312 - Rent expense 262,000 - Interest expense 60,400 - Salaries expense 200,700 - Depreciation expense 63,209 - $ 5,136,556 $ 5,136,556 (a) Prepare a comprehensive income statement. (b) Prepare closing entries. HANNA SPORTS CORPORATION Income Statement For the Year Ending December 31, 20X7 Revenues Cost of goods sold Gross profit Expenses Net income GENERAL JOURNAL Page Date Accounts Debit Credit Dec. 31 To close income statement accounts with a credit balance, and establish ending inventory balance Dec. 31 To close income statement accounts with a debit balance, and remove the beginning inventory balance Dec. 31 To close Income Summary to Retained Earnings Dec. 31 To close Dividends to Retained Earnings