Chapter 14, Problem 10Q

To determine

Retained Earnings: The profit of the company which is retained for further business operations is called as retained earnings.

Retained Earnings Statement: The statement which provides retained earning’s information over a period of time to the balance sheet is called as retained earnings statement. It shows changes in owner’s equity over a period of time.

Prior Period Adjustment: The rectification of those errors or mistakes which were committed earlier in financial statements is called as prior period adjustment.

To prepare: The retained earnings statement of the company after the adjustment of depreciation expense of the prior period.