Party Wagon, Incorporated, provides musical entertainment at weddings, dances, and various other functions. The company performs adjusting entries monthly but prepares closing entries annually on December 31. The company recently hired Jack Armstrong as its new accountant. Jack’s first assignment was to prepare an income statement, a statement of retained earnings, and a balance sheet using an adjusted trial balance given to him by his predecessor, dated December 31, current year.From the adjusted trial balance, Jack prepared the following set of financial statements:PARTY WAGON, INCORPORATEDIncome StatementFor the Year Ended December 31, Current YearRevenue: Party revenue earned $ 156,000Unearned party revenue 2,160Accounts receivable 10,800Total revenue $ 168,960Expenses: Insurance expense $ 2,160 Office rent expense 14,400 Supplies expense 1,440 Dividends 1,200 Salary expense 90,000 Accumulated depreciation: van 19,200 Accumulated depreciation: equipment and music 16,800 Repair and maintenance expense 2,400 Travel expense 7,200 Miscellaneous expense 4,320 Interest expense 5,280 164,400Income before income taxes $ 4,560Income taxes payable 480Net income $ 4,080PARTY WAGON, INCORPORATEDStatement of Retained EarningsFor the Year Ended December 31, Current YearRetained earnings (per adjusted trial balance) $ 18,000Add: Income 4,080Less: Income taxes expense 2,400Retained earnings December 31, current year $ 19,680PARTY WAGON, INCORPORATEDBalance SheetDecember 31, Current YearAssets Cash $ 18,000Supplies 600Van $ 48,000 Less: Depreciation expense: van 9,600 38,400Equipment and music $ 42,000 Less: Depreciation expense: music and equipment 8,400 33,600Total assets $ 90,600Liabilities and Stockholders' equity Liabilities: Accounts payable $ 8,400Notes payable 46,800Salaries payable 1,920Prepaid rent 2,400Prepaid insurance 5,400Total liabilities $ 64,920Stockholders' equity: Capital stock 6,000Retained earnings 19,680Total stockholders' equity $ 25,680Total liabilities and stockholders' equity $ 90,600Required:Prepare a corrected set of financial statements dated December 31, current year. (You may assume that all of the figures in the company’s adjusted trial balance were reported correctly except for Interest Payable of $240, which was mistakenly omitted in the financial statements prepared by Jack.)Prepare the necessary year-end closing entries.Using the financial statements prepared in part a, briefly evaluate the company’s profitability and liquidity. (No transactions affected the capital stock account during the year.)