serena and bill davis began operations of their furniture repair shop rumours furniture inc on january 1 2013/

Transactions during 2014 (summarized in thousands of dollars) follow:
a. Borrowed $ 25 cash on July 1, 2014, on an 8 percent note, payable on June 30, 2015.
b. Purchased equipment for $ 18 cash on July 1, 2014.
c. Sold 5,000 additional shares for $ + cash per share.
d. Earned revenues for 2014: $ 74, including $ 15 on credit.
e. Recognized other expenses for 2014: $ 35, including $ 9 on credit.
f. Purchased additional small- tools inventory, $ 3 cash.
g. Collected trade receivables, $ 8.
h. Paid trade payables, $ 11.
i. Purchased supplies on account, $ 10 (debit to Account No. 03).
j. Received a $ 3 deposit on work to start January 15, 2015. k. Declared and paid cash dividend, $ 12.
Data for adjusting entries are as follows:
l. Service supplies inventory of $ 4 and small- tools inventory of $ 9 on hand at December 31, 2014 (debit other expenses account). m. Depreciation on the equipment estimated at $ 4 per year. n. Accrued interest on notes payable (to be computed).
o. Wages earned since the December 24 pay date but not yet paid, $
4. p. Income tax expense payable in 2015, $ 4.
Required:
1. Set up T- accounts for the accounts on the trial balance and enter their beginning balances.
2. Record transactions (a) through (k) and post them to the T- accounts.
3. Record and post the adjusting entries (l) through (p).
4. Prepare a statement of earnings (including earnings per share) for 2014, a statement of changes in equity for 2014, and a statement of financial position at December 31, 2014.
5. Record and post the closing entries.
6. Prepare a post- closing trial balance.
7. Compute the following ratios for 2014 and explain what they mean:
a. Current ratio
b. Total asset turnover ratio
c. Net profit margin ratio
d. Return on equity