Set of Financial Statements, and Performing Ratio Analysis Brothers Anthony and Christopher Gaber began operations of their tool and die shop $($A $\backslash$& C Tools Inc.$)$ on January $1,2022.$ The company's fiscal year ends on December $31.$ The trial balance on January $1,2023,$ was as follows:

Titles, Debit, Credit

Cash $$3,000$

Accounts receivable $5,000$

Service supplies inventory $12,000$

Land

Equipment, $60,000$

Accumulated depreciation $($equipment$)6,000$

Other assest $($not detailed to simplify$)4000$

Account Payable $5,000$

Notes payable

Wages payable

Interest payable

Income taxes payable

Contributed capital $(65,000$ shares$)65000$

Retained earnings $8000$

Service revenue

Depreciation revenue

Income tax expenses

Interest expenses

Other expenses

Total $84,00084,000$

Transactions and events during $2020$ are as follows:

a$.$ Bor$$owed $ $10,000$ cash on a $6$ percent note payable, dated March $1,2020.$

b$.$ Purchased land for future building site; paid cash, $ $9,000$

c$.$ Earned revenues for $2022$ $ $160,000$ including $ $50,000$ on credit.

d$.$ Sold $3,000$ additional shares for $$1$ cash per share.

c$.$ Recognized other expenses for $2023,$ $ $85,000,$ including $ $20,000$ on credit.

f$.$ Collected accounts receivable, $ $24,000.$

g$.$ Purchased additional assets, $ $10,000$ cash $($debit other assets account$).$

h$.$ Paid accounts payable, $ $13,000.$

i$.$ Purchased service supplies on account, $ $18,000($debit to Account No$.03).$

j$.$ Signed a $ $25,000$ service contract to start February $1,2021.$

k$.$ Declared and paid cash dividend, $ $15,000.$

Data for adjusting entries are as follows:

L$.$ Service supplies inventory on hand at December $31,2020,\backslash$$$12,000($debit other expenses act.

m$.$ Depreciation on the equipment estimated at $ $6,000\backslash )$ per year.

n$.$ Accrued interest on notes payable $($to be computed$).$

o$.$ Wages earned since the December $24$ pay date but not yet paid $ $15,000$

p Income tax expense for $2020$ payable in $2021,$ $ $8,000$

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$),$ a statement of changes in equity for $2020,$ and a statement of financial position at December $31,2023.$

$5.$ Record and post the closing entries.

$6.$ Prepare a post$-$closing trial balance.

$7.$ Compute the following ratios for $2020$ and explain what they mean:

a$.$ Current ratio

b$.$ Total asset turnover ratio

c$.$ Net profit margin ratio

d$.$ Return on equity

e$.$ Net profit margin ratio d$.$ Return on equity