Chapter 3, Problem 5PSB

To determine

Adjusted Trial Balance:

It is a statement that contains balances of all account after all the adjusting entries has been made.

Income Statement:

It is a financial statement that shows the profit and loss made by the firm in a particular accounting period.

Retained Earnings:

It is a financial statement that shows the amount of profit retained by the company for future unforeseen events.

Balance sheet:

It shows the financial position of an enterprise. It consists of asset liabilities and stockholder’s equity.

The relation between the assets, liabilities, and stockholder’s equity is,

  $\text{Assets}=\text{Liabilities}+\text{Stockholders' Equity}$

Profit Margin:

It shows how much the company is earning for every dollar of its revenue. It comes after dividing net sales from revenue into percentage terms.

1.

a.

To prepare: Income statement with balances of adjusted trial balance.

b.

To determine

To prepare: Retained earnings statement.

c.

To determine

To prepare: Balance sheet.

2.

To determine

Profit margin.