fordable Lawn Care, Inc., provides lawn-mowing services to both commercial and re ljusting entries on a monthly basis, whereas closing entries are prepared annually at ecember 31, current year, follows. AFFORDABLE LAWN CARE, INC. Adjusted Trial Balance December 31, Current Year Debits $ 117,050 9,600 16,000 6,000 2,150 300,000 Credits Cash Accounts receivable Unexpired insurance Prepaid rent Supplies Trucks Accumulated depreciation: trucks Mowing equipment Accumulated depreciation: mowing equipment Accounts payable Notes payable Salaries payable Interest payable Income taxes payable Unearned mowing revenue Capital stock Retained earnings Dividends Req A1 Req A2 Req A3 Req B Req C Req D $ 240,000 Using the financial statements prepared in part a, briefly evaluate the company's profitability and liquidity. (Round your percentage .1234 should be entered as 12.3)) 40,000 24,000 3,000 100,000 1,800 300 2,100 1,800 40,000 60,000 For the year ended December 31, Current Year, the company generated net income of on sales. Thus, net income as a percentage of sales was approximately | %. Moreover, the profit represented a return on average stockholders' equity of approximately %, which is a fairly strong return on investment. The company's balance sheet at December 31, Current Year, reports cash and accounts receivable totaling . It also reports various payables (liabilities) totaling . Depending on when the note payabli reported in the balance sheet is due, the company may be extremely liquid. If this obligation is not due in the near future, 10,000 the company has in cash and accounts receivable to cover obligations of only Moreover, 340,000 Mowing revenue earned Insurance expense Office rent expense Supplies expense Salary expense Depreciation expense: trucks Depreciation expense: mowing equipment Repair and maintenance expense Fuel expense Miscellaneous expense Interest expense Income taxes expense of the of obligations, the Unearned Mowing Revenue amount, will not require 4,800 72,000 10, 400 120,000 60,000 8,000 6,000 3,000 10,000 6,000 12,000 $ 813,000 a cash outlay. Even if this note is due shortly, the company still appears to be liquid. $ 813,000