Fick Psychological Services, Inc

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Fick 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.

FICK PSYCHOLOGICAL SERVICES, INC.

Income Statement

For the year ended December 31, current year

Revenue: Counseling revenue $ 370,000

Expenses : Advertising expense $ 1,700 Salaries expense 93,000 Office supplies expense 2,500 Utilities expense 1,000 Malpractice insurance expense 6,000 Office rent expense 23,000 Continuing education expense 2,900 Depreciation expense: fixtures 3,500 Miscellaneous expense 7,000 Income taxes expense 26,500

167,100

Net income $ 202,900

Fick's statement of retained earnings indicates that a $8,000 cash dividend was declared and paid during the current year.

a. Prepare the necessary closing entries on December 31 of the current year.

b. If Fick's Retained earnings account had a $90,000 balance on at the beginning of the current year, at what amount should Retained Earnings be reported in the firm's year-end balance sheet dated December 31?