Savory Ltd$.$ is completing the information$-$processing cycle at its fiscal year$-$end, December $31.$ Following are the correct account balances at December $31,$ both before and after the adjusting entries.

Trial Balance, December $31$ of the Current Year

UNADJUSTED ADJUSTED

Items Debit Credit Debit Credit

a$.$ Cash $ $12,600$ $ $12,600$

b$.$ Service revenue receivable $560$

c$.$ Prepaid insurance $840560$

d$.$ Equipment $168,280168,280$

e$.$ Accumulated depreciation, equipment $ $42,100$ $ $54,000$

f$.$ Accrued advertising payable $6,580$

g$.$ Contributed capital $112,000112,000$

h$.$ Retained earnings, January $119,60019,600$

i$.$ Service revenue $64,40064,960$

j$.$ Salary expense $56,38056,380$

k$.$ Depreciation expense $11,900$

l$.$ Insurance expense $280$

m$.$ Advertising expense $6,580$

$ $238,100$ $ $238,100$ $ $257,140$ $ $257,140$

Required:

$1.$ Compare the amounts in the columns before and after the adjusting entries to reconstruct the adjusting entries made at the end of the current year. $($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.$)$

$2-$a$.$ Compute the amount of net earnings, assuming that it is based on the amounts $($a$),$ before adjusting entries, and $($b$),$ after adjusting entries.

$2-$b$.$ Which net earnings amount is correct?

multiple choice

Amounts after adjusting entries Correct

Amounts before adjusting entries

$3.$ Compute the earnings per share, assuming that $4,000$ shares are outstanding all year. $($Round the final answer to $2$ decimal places.$)$

$4.$ Compute the net profit margin ratio and the return on equity, assuming that contributed capital did not change during the year. $($Round percentage answer to $1$ decimal place $($i$.$e$.,0\mathrm{.}124$ should be entered as $12\mathrm{.}4).)$

$5.$ Prepare the closing entries at December $31.($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.$)$