881891 231 $18,000 4,080 2,400 $19,680 $18,000 600 38,400 33,600 $90,600 $ 8,400 46,800 1,920 2,400 5,400 $64,920 6,000 19,680 $25,680 $90,600 nt year. (You may reported correctly nancial statements any's profitability year.) 232 LO5-1, L05-2, LO5-4, LO5-5, LO5-6 PROBLEM 5.2A Preparing Financial Statements and Closing Entries of a Profitable Company Chapter 5 The Accounting Cycle: Reporting Financial Results Affordable Lawn Care, Inc., provides lawn-mowing services to both commercial and residential customers. The company performs adjusting entries on a monthly basis, whereas closing entries are prepared annually at December 31. An adjusted trial balance dated December 31, current year, follows: Cash. Accounts receivable Prepaid insurance. Prepaid rent Supplies Trucks Accumulated depreciation: trucks Mowing equipment. Accumulated depreciation: mowing equipment. Accounts payable. Notes payable Salaries payable Interest payable. Income taxes payable. Unearned mowing revenue. Capital stock Retained earnings. Dividends Mowing revenue earned Insurance expense Office rent expense Supplies expense Salary expense Depreciation expense: trucks. Depreciation expense: mowing equipment Repair and maintenance expense Fuel expense Miscellaneous expense AFFORDABLE LAWN CARE, INC. ADJUSTED TRIAL BALANCE DECEMBER 31, CURRENT YEAR a. Interest expense Income taxes expense b. C. d. Debits Credits $117,050 9,600 16,000 6,000 2,150 300,000 40,000 10,000 4,800 72,000 10,400 120,000 60,000 8,000 6,000 3,000 $240,000 24,000 3,000 100,000 1,800 300 2,100 1,800 40,000 60,000 340,000 Instructions 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. Prepare the necessary year-end closing entries. Prepare an after-closing trial balance. Using the financial statements prepared in part a, briefly evaluate the company's profitability and liquidity, 10,000 6,000 12,000 $813,000 $813,000

232 105.1,LO52,Los4,1055, to5-6. PROBLEM 5.2A Preparing Financial Shetements and Clasing Entres of a Protitable. Ceitany follow: Instructions sud by idifing. 232 105.1,LO52,Los4,1055, to5-6. PROBLEM 5.2A Preparing Financial Shetements and Clasing Entres of a Protitable. Ceitany follow: Instructions sud by idifing