EXERCISE 1 (100 points) The following is Rainbow Corporation year-end adjusted trial balance dated December 31, 2019. Rainbow Co. Adjusted Trial Balance at 31 December 2019 Debit Credit Cash 5,700 Accounts Receivable 4,500 Prepaid Insurance 2,100 Office Equipment 18,300 Accumulated Depreciation: Office Equipment 600 Accounts Payable 3,600 Unearned Revenue 5,300 Capital Stock 10,000 Retained Earnings 4,700 Dividends 1,100 Service Revenue Earned 19,750 Wages Expense 6,600 Utilities Expense 1,800 Rent Expense 2,700 Depreciation Expense 600 Income Taxes Expense 550 43.950 43.950. Instructions: Using Adjusted Trial Balance above, perform the following tasks: (1) Prepare an Income Statement for the year ended December 31, 2019 (10 points). (2) Prepare a Statement of Retained Earnings for the year ended December 31, 2019 (10 points). (3) Prepare a Balance Sheet dated December 31, 2019 (20 points). (4) Prepare all necessary closing entries at December 31, 2019 (20 points). (5) Prepare an after-closing trial balance dated December 31, 2019 (10 points). (6) Does the company appear to be liquid? Explain. Justify your conclusion with calculation of working capital and current ratio (15 points). (7) Has the company been profitable in the past? Is the company profitable this year? Justify your conclusion with calculation of net income percentage and return on equity (15 points).