ACME Pest Control Services (organized as a corporation on September 1, 2009) has completed the accounting cycle for the second year, ended August 31, 2011. ACME Pest Control also has completed a correct trial balance as follows:

Required:
1. Prepare an income statement for the reporting year ended August 31, 2011. Include income tax expense, assuming a 30 percent tax rate. Use the following major captions: revenues, expenses, profit before income tax, income tax, profit, and earnings per share (list each item under these captions as appropriate).
2. Prepare the journal entry to record income taxes for the year (not yet paid).
3. Prepare a statement of financial position at the end of the reporting year, August 31, 2011. Use the following captions (list each item under these captions as appropriate).

4. Compute the net profit margin and the return on equity ratios. What do these ratios suggest?
5. Prepare the closing entries at August 31, 2011.

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ACME PEST CONTROL SERVICES Trial Balance At August 31, 2011 Account Titles Cash Debit Credit $ 26,000 Trade receivables Supplies inventory 30.800 1.300 Service vehicles (company vans) Accumulated doprociation, automobiles Equipment Accumulated depreciation, equipment Trade payables 60,000 $ 20,000 14,000 4,000 16,700 Salaries payable Note payable, long term Share capital (10,000 shares) 1,100 34,000 40,000 Retained earnings (on September 1, 2007) 4,300 Dividends declared 2,000 Sales revenue 38,000 Maintenance contract revenue 17,000 Operating exponses (detail omitted to conserve your time) 27,000 Depreciation expense (inclucing S2,000 on equipment) 12,000 Interest expense 2,000 Totals $175.100 $175,100