Affordable Lawn Care, Inc., provides lawn mowing services to both commercial and residential customers. The company performs adj

usting entries on a monthly basis, whereas closing entries are prepared annually at December 31. An adjusted trial balance dated December, current year follows
Affordable Lawn Care, Inc.
Adjusted Trial Balance
December 31, current year
Debit Credits
Cash…………………………………………… $117,050
Accounts receivable……………………………. 9,600
Unexpired insurance…………………………. 16,000
Prepaid rent………………………………………. . 6,000
Supplies………………………………………….. 2,150
Trucks…………………………………………… 300,000
Accumulated depreciation: truck $240,000
Mowing equipment………………………. 40,000
Accumulated depreciation: mowing equipment 24,000
Accounts payables……………………………. 3,000
Notes payables………………………….................................................... 100,000
Salaries payables……............................................................................. 1,800
Interest payables…………………............................................................ 300
Income taxes payables........................................................................ 2,100
Unearned mowing revenue……........................................................ 1,800
Capital Stock............................................................................................. 40,000
Retained earnings…… ........................................................................... 60,000
Dividends……………………… 10,000
Mowing revenue earned………………..................................................... 340,000
Insurance expense………………. 4,800
Office rent expense………………….. 72,000
Supplies expense…………………….. 10,400
Salary expense………………………….. 120,000
Depreciation expense: truck……….. 60,000
Depreciation expense: mowing equipment 8,000
Repair and maintenance expense………. 6,000
Fuel expense………………………………… 3,000
Miscellaneous expense………………… 10,000
Interest expense……………………………. 6,000
Income taxes expense……………….. 12,000
$813,000 $813,000
1. Prepare an income statement and statement of retained earnings for the year ended December 31, current year. Also prepare the company’s balance sheet dated December 31, current year
2. Prepare the necessary year end closing entries
3. Prepare an after closing trial balance
4. Using the financial statement prepared in part a, briefly evaluate the company’s profitability and liquidity