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Hammerstone Consulting provides risk management services toindividuals and to corporate clients . The company closes itstemporary accounts once each year on December 31. The companyrecently issued the

Hammerstone Consulting provides risk management services toindividuals and to corporate clients . The company closes itstemporary accounts once each year on December 31. The companyrecently issued the following income statement as part of itsannual report:

 

HAMMERSTONE CONSULTING
Income Statement
For The Year Ended December 31, 2015

Revenue:

        

Consulting revenue—individualclients

    

$

60,000

Consulting revenue—corporateclients

      

240,000
         
     

$

300,000

Expenses:

        

Advertising expense

$

24,000

    

Depreciation expense:computers

  

36,000

    

Rent expense

  

14,400

    

Office supplies expense

  

6,600

    

Travel expense

  

86,700

    

Utilities expense

  

4,950

    

Telephone and Internet expense

  

2,850

    

Salaries expense

  

233,250

    

Interest expense

  

3,750

  

412,500
         

Net loss

    

$

(112,500)
         
 
 

The firm's statement of retained earnings indicates that a$37,500 cash dividend was declared and paid in 2015.

a.

Prepare the necessary closing entries on December 31, 2015.(If no entry is required for a transaction/event, select"No journal entry required" in the first accountfield.)
   

b.

If the firm's Retained Earnings account had a $450,000 balanceon January 1, 2015, at what amount should Retained Earnings bereported in the firm's balance sheet dated December 31, 2015?

Aug 16 2021 View more View Less

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