Preparing Financial Statements and Closing Entries Hayley Inc. prepared the following adjusted trial balance as of December 31, 2020. Adjusted Trial Balance Account Debit Credit Cash $22,500 $ Accounts receivable 24,000 Inventory 30,000 Prepaid insurance 900 Equipment 168,750 Accumulated depreciation-equipment 33,750 Accounts payable 26,250 Salaries payable 3,000 Interest payable 300 Note payable 37,500 Common stock 82,500 Retained earnings 60,000 Dividends 2,250 Sales 262,500 Cost of goods sold 150,000 Salaries expense 89,400 Repair expense 1,575 Insurance expense 1,125 Selling expense 1,650 Depreciation expense 9,900 Interest expense 3,750 Totals $505,800 $505,800 a. Prepare the income statement for Hayley Inc. for the year ended December 31, 2020. b. Prepare closing entries as of December 31, 2020. Income Statement Journal Entries a. Prepare the income statement for Hayley Inc. for the year ended December 31, 2020. Note: Enter revenues and expenses in the order of the largest dollar amount to the smallest dollar amount. Note: Do not use negative signs with any of your answers. Hayley Inc. Income Statement For the Year Ended December 31, 2020 Revenues Total Revenues Expenses Total Expenses Check Income Statement Journal Entries b. Prepare closing entries as of December 31, 2020. General Journal Account Name Dr. Cr. . To close revenues to income summary. Salaries Expense Depreciation Expense Selling Expense Repair Expense Insurance Expense 3,750 To close expenses to income summary. To close income summary to retained earnings. > To close dividends to retained earnings. Check