Drs. Glenn Feltham and Gary Entwistle began operations of their physical therapy clinic called Northland Physical Therapy on January 1, 2011. The annual reporting period ends December 31. The trial balance on January 1, 2012, was as follows (the amounts are rounded to thousands of dollars to simplify):

Transactions during 2012 (summarized in thousands of dollars) follow:
a. Borrowed $22 cash on July 1, 2012, signing a six-month note payable.
b. Purchased equipment for $25 cash on July 1, 2012.
c. Issued additional shares of stock for $5.
d. Earned revenues for 2012 of $55, including $8 on credit and $47 received in cash.
e. Recognized wages expense for 2012 of $30, paid in cash.
f. Purchased other noncurrent assets, $3 cash.
g. Collected accounts receivable, $9.
h. Purchased supplies on account for future use, $7.
i. Paid accounts payable, $10.
j. Received a $3 deposit from a hospital for a contract to start January 5, 2013.
k. Declared and paid a cash dividend, $4.
Data for adjusting journal entries:
l. Supplies of $3 were counted on December 31, 2012.
m. Depreciation for 2012, $4.
n. Accrued interest of $1 on notes payable.
o. Wages incurred not yet paid or recorded, $3.
p. Income tax expense for 2012 was $4, and will be paid in 2013.
Required:
1. Set up T-accounts for the accounts on the trial balance and enter beginning balances.
2. Record journal entries for transactions (a) through (k), and post them to the T-accounts.
3. Prepare an unadjusted trial balance.
4. Record and post the adjusting journal entries (l) through (p).
5. Prepare an adjusted trial balance.
6. Prepare an income statement, statement of retained earnings, and balance sheet.
7. Prepare and post the closing journal entries.
8. Prepare a post-closing trial balance.
9. How much net income did the physical therapy clinic generate during 2012? What was its net profit margin? Is the business financed primarily by liabilities or stockholders' equity?
What is its current ratio?

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Account Titles Cash Accounts Receivable Debit Credit $ 7 Accumulated Depreciation Other Noncurrent Assets Accounts Payable Notes Payable Wages Payable Interest Payable Income Taxes Payable Unearned Revenue Contributed Capital Retained Earnin Dividends Declared Service Revenue Depreciation Income Tax Expense Interest Expense 4 15 0 0 Totals $25 $25