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.

AFFORDABLE LAWN CARE, INC.
Adjusted Trial Balance
December 31, Current Year
		Debits				Credits
Cash	$	117,050
Accounts receivable		9,600
Unexpired insurance		16,000
Prepaid rent		6,000
Supplies		2,150
Trucks		300,000
Accumulated depreciation: trucks					$	240,000
Mowing equipment		40,000
Accumulated depreciation: mowing equipment						24,000
Accounts payable						3,000
Notes payable						100,000
Salaries payable						1,800
Interest payable						300
Income taxes payable						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: trucks		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

Required:

a-1. Prepare an income statement for the year ended December 31, Current Year.

a-2. Prepare a statement of retained earnings for the year ended December 31, Current Year.

a-3. Prepare the company's balance sheet dated December 31, Current Year.

b. Prepare the necessary year-end closing entries.

c. Prepare an after-closing trial balance.

d. Using the financial statements prepared in part a, briefly evaluate the company's profitability and liquidity.