Exercise 5.2 (Static) Financial Statement Preparation (LO5-1, LO5-2, LO5-6) Green Lawns, Inc., performs adjusting entries every month, but closes its accounts only at year-end. The following is the company's year-end adjusted trial balance dated December 31, current year. Cash Accounts receivable Supplies Equipment GREEN LAWNS, INC. Adjusted Trial Balance December 31, Current Year Accumulated depreciation: equipment Accounts payable. Income taxes payable Capital stock Retained earnings Dividends Lawn care revenue earned Salary expense Supply expense Advertising expense Depreciation expense: equipment Income taxes expense $ 218,640 10,800 728 28,800 $ 12,000 3,600 8,400 60,000 108,000 4,800 230,408 124,800 2,880 720 2,400 27,840 $ 422,400 $422,400 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 8-3. Prepare the company's balance sheet dated December 31, current year b. Does the company appear to be liquid? c. Has the company been profitable in the past? 13