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, current year, is as follows.

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

WILDERNESS GUIDE SERVICES, INC. ADJUSTED TRIAL BALANCE DECEMBER 31, CURRENT YEAR Cash.... $ 12,200 Accounts recelvable 31,000 Camping supplles.. 7,900 Unexpired Insurance policies. 2,400 Equipment .... 70,000 ..... Accumulated depreclation: equlpment. $ 60,000 Notes payable (due 4/1/next year). 18,000 Accounts payable. 9,500 Capital stock.... 25,000 Retalned earnings. 15,000 DIvidends 1,000 Gulde revenue earned. 102,000 Salary expense Camping supply expense Insurance expense... 87,500 ...... 1,200 9,600 Depreclation expense: equipment.. Interest expense... 5,000 1,700 $229,500 $229,500