Chapter 5 The Accounting Cycle: Reporting Financial Results -4, L05-5, 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 losin able AFFORDABLE LAWN CARE, INC. ADJUSTED TRIAL BALANCE DECEMBER 31, CURRENT YEAR Cash... . . . . . . . "" Accounts receivable Prepaid rent Supplies Trucks .. Accumulated depreciation: trucks Mowina equipment. Accumulated depreciation: mowing equipmen Accounts payable . Notes avable Salaries payable Interest payable. Income taxes pavable. uneamed mown revenue Capital stock.. Retained earnings Dividends .. Mowina revenue earned Insurance expense Office rent expense Supplies expense Salarv expense Depreciation expense: trucks Depreciation expense: mowing equip Repair and maintenance expens Fue expense. Interest expense xpense. Debits $117.050 9,600 16.000 6.000 2,150 300,000 40,000 Credits $240.000 24.000 3.000 100,000 1,800 300 2,100 1,800 40.000 60,000 340.000 10.000 4,800 72.000 10,400 120.000 60,000 8,000 6.000 3,000 10,000 6.000 12,000 $813,000 $813.000 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.

Chspter 5 The Accounting Cycle: RepsrtingFi-andal Results Affordable Lawn Care, Lne., prorides lawa-nowing secvices to both commercial and residential customers. The company performs adjusting entries on a monthly basis, whereas closing entries are peepared annually at December 31 . An adjusted trial balance dated December 31 , current year. tollows. Instructions a. Prepare an inoome statement and statement of retainot eamings for the year ended December 31 . curreat year. Also prepare 1bo coenpany"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 stalements prepared in part at briefly evaluale the company's prolitability and liquidity