Affordable Lawn Care, Inc., provides lawn-mowing services to both commercial and residential customers….
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, 2015, follows.
|AFFORDABLE LAWN CARE, INC.
Adjusted Trial Balance
December 2015, 31
|Accumulated depreciation: trucks||$||240,000|
|Accumulated depreciation: mowing equipment||24,000|
|Income taxes payable||2,100|
|Unearned mowing revenue||1,800|
|Mowing revenue earned||340,000|
|Office rent expense||72,000|
|Depreciation expense: trucks||60,000|
|Depreciation expense: mowing equipment||8,000|
|Repair and maintenance expense||6,000|
|Income taxes expense||12,000|
|a-1.||Prepare an income statement for the year ended December 31, 2015.
|b.||Prepare the necessary year-end closing entries. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)|
|c.||Prepare an after-closing trial balance|
|d.||Using the financial statements prepared in part a, briefly evaluate the company’s profitability and liquidity. (Round your percentage answers to 1 decimal place (i.e. .1234 should be entered as 12.3))|
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