Hayley Inc. prepared the following adjusted trial balance as of December 31. Adjusted Trial Balance December 31 Accounts Cash Accounts receivable Inventory Prepaid insurance Equipment Accumulated depreciation-equipment Accounts payable Salaries payable Interest payable Note payable Common stock Retained earnings Dividends Sales Cost of goods sold Salaries expense Repair expense Insurance expense Selling expense Debit Credit $30,000 32,000 40,000 1,200 225,000 3,000 200,000 119,200 2,100 1,500 2,200 $45,000 35,000 4,000 400 50,000 110,000 80,000 350,000

Hayley Inc. prepared the following adjusted trial balance as of December 31. Adjusted Trial Balance December 31 \begin{tabular}{|l|r|r|} \hline \multicolumn{1}{|c|}{ Accounts } & \multicolumn{1}{c|}{ Debit } & \multicolumn{1}{c|}{ Credit } \\ \hline Cash & $30,000 & \\ \hline Accounts receivable & 32,000 & \\ \hline Inventory & 40,000 & \\ \hline Prepaid insurance & 1,200 & \\ \hline Equipment & 225,000 & \\ \hline Accumulated depreciation-equipment & & $45,000 \\ \hline Accounts payable & & 35,000 \\ \hline Salaries payable & & 4,000 \\ \hline Interest payable & & 400 \\ \hline Note payable & & 50,000 \\ \hline Common stock & & 80,000 \\ \hline Retained earnings & 3,000 & \\ \hline Dividends & & 350,000 \\ \hline Sales & 200,000 & \\ \hline Cost of goods sold & 119,200 & \multirow{2}{*}{} \\ \hline Salaries expense & 2,100 & \\ \hline Repair expense & 1,500 & \\ \hline Insurance expense & 2,200 & \\ \hline Selling expense & & \\ \hline \end{tabular} \begin{tabular}{|l|r|r|} \hline \multicolumn{1}{|c|}{ Accounts } & \multicolumn{1}{c|}{ Debit } & \multicolumn{1}{|c|}{ Credit } \\ \hline Cash & $30,000 & \\ \hline Accounts receivable & 32,000 & \\ \hline Inventory & 40,000 & \\ \hline Prepaid insurance & 1,200 & \\ \hline Equipment & 225,000 & \\ \hline Accumulated depreciation-equipment & & $45,000 \\ \hline Accounts payable & & 35,000 \\ \hline Salaries payable & & 4,000 \\ \hline Interest payable & & 400 \\ \hline Note payable & & 50,000 \\ \hline Common stock & & 110,000 \\ \hline Retained earnings & & 80,000 \\ \hline Dividends & 3,000 & \\ \hline Sales & & 350,000 \\ \hline Cost of goods sold & 5,000 & \\ \hline Salaries expense & 200,000 & \\ \hline Repair expense & 119,200 & \\ \hline Insurance expense & 2,100 & \\ \hline Selling expense & 1,500 & \\ \hline Depreciation expense & 2,200 & \\ \hline Interest expense & 13,200 & \\ \hline Net earnings & & \\ \hline \end{tabular} a. Prepare the income statement for the year ended December 31. b. Prepare closing entries as of December 31. Use the Income Summary account for closing. - Note: Do not use negative signs with any of your answers. \begin{tabular}{|l|l|l|l|} \hline \multicolumn{1}{|c|}{ Account Name } & Dr. & Cr. \\ \hline To close revenues to income summary. & & 0 & 0 \\ \hline & & 0 & 0 \\ \hline & & 0 & 0 \\ \hline To close expenses to income summary. & & 0 & 0 \\ \hline & & 0 & 0 \\ \hline To close income summary to retained earnings & & 0 & 0 \\ \hline & & 0 & 0 \\ \hline To close dividends to retained earnings & & 0 & 0 \\ \hline \end{tabular}