Wilderness Guide Services, Inc., performs adjusting entries every month, but closes its accounts only at year-end. The company’s year-end adjusted trial balance dated December 31, 2011, follows:

a. Prepare an income statement and statement of retained earnings for the year ended December 31, 2011. Also prepare the company’s balance sheet dated December 31, 2011.
b. Does the company appear to be liquid? Defend your answer.
c. Has the company been profitable in the past? Explain.

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WILDERNESS GUIDE SERVICES, INC. ADJUSTED TRIAL BALANCE DECEMBER 31, 2011 Cash. . Accounts receivable ^... Camping supplies Unexpired insurance policies. . .. Equipment Accumulated depreciation: equipment. Notes payable (due 4/1/12) Accounts payable Capital stock Retained earnings 12,200 31,000 7,900 2,400 .70,000 60,000 18,000 9,500 25,000 15,000 1,000 Guide revenue eamed Salary expense . Camping supply expense 102,000 87,500 1,200 9,600 5,000 1700 29,500 - . . Depreciation expense: equipment Interest expense $229,500