The adjusted trial balance for China Tea Company at December 31, 2016, is presented below:

Debit Cash 10,500 Accounts receivable 150,000 Prepaid rent 5,000 Inventory 25,000 Equipment 300,000

CREDIT Accumulated depreciation - equipment 125,000 Accounts payable 30,000 Notes payable - due in three months 30,000 Salaries payable 4,000 Interest payable 1,000 Capital stock 200,000 Retained earnings 50,000 Sales revenue 400,000

DEBIT Costs of goods sold 180,000 Salaries expense 120,000 Rent expense 15,000 Depreciation expense 30,000 Interest expense 2,000 Advertising expense 2,500

Totals 840,000 840,000

REQUIRED: a. Prepare closing entries for the China Tea Company for 2016 in good form.

b. What is the balance in Retained Earnings after the closing entries are made?