Problem 5.3A (Static) Preparing Financial Statements and Closing Entries of an Unprofitable Company (LO 5-1, LO 5-2, LO 5-3, LO 5-4, LO 5-6) Mystic Masters, Inc., provides fortune-telling services over the Internet. In recent years the company has experienced severe financial difficulty. Its accountant prepares adjusting entries on a monthly basis, and closing entries on an annual basis, at December 31 . An adjusted trial balance dated December 31 , current year, follows. (Hint: The company incurred no income taxes expense in the current year.) 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 performance. e. Identify information that the company is apt to disclose in the notes that accompany the financial statements prepared in part a. repare an income statement for the year ended December 31 , current year. Complete this question by entering your answers in the tabs below. Prepare a statement of retained earnings for the year ended December 31 , current year. Complete this question by entering your answers in the tabs below. Prepare the company's balance sheet dated December 31, current year. (Amounts to be deducted should be indicated with a minus sign.) Complete this question by entering your answers in the tabs below. Prepare an after-closing trial balance. Complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. Identify information that the company is apt to disclose in the notes that accompany the financial statements prepared in part a. The primary issue to be addressed in the notes to the financial statements is the company's ability, or lack thereof, to remain a going concern. In other words, just how much longer can this business stay afloat given its desperate financial condition? Information about the note payable should also be disclosed. Who is the maker of this note? When is it due? Is it secured with company assets? Etc. The company may also have to disclose information concerning any legal problems it faces. The legal expenses reported in the income statement may suggest that one or more lawsuits are currently pending