Abraham Company is completing the information processing cycle at the end of its fiscal year, December 31, 2009. Following are the correct balances at December 31, 2009, for the accounts both before and after the adjusting entries for 2009.

Required:
1. Compare the amounts in the columns before and after the adjusting entries to reconstruct the adjusting entries made in 2009. Provide an explanation of each.
2. Compute the amount of income, assuming that it is based on the amount (a) before adjusting entries and (b) after adjusting entries. Which income amount is correct? Explain why.
3. Compute earnings per share, assuming that 5,000 shares of stock are outstanding.
4. Compute the net profit margin. What does this suggest to you about the company?
5. Record the closing entries at December 31, 2009.
6. Prepare a post-closing trial balance at December 31,2009.

Trial Balance, December 31, 2009 Before After Adjusting Entries Debt Credit Adjusting Entrles Adjustments Itenis Debit bit Cdit Debit Credit S 18,000 a Cash b. Accounts receivable c. Prepaid rent d. Property. plant, and S 18,000 1.500 800 1,200 210,000 210,000 equipment e. Accumulated depreciation f Income taxes payable g. Unearned revenue h. Contributed capital i. Retained earnings, 52,500 70,000 6,500 8,000 I 10,000 6,000 110,000 January 1, 2009 j. Service revenue k Salary expense L. Depreciation expense m. Rent expense n. Income tax expense 21.700 21,700 83,000 92,500 54,000 54,000 17.500 400 6,500 $283,200 $283.200 $308.700 S308,700