McKenzie Riding, Inc.

Unadjusted Trial Balance

At December 31

Debits Credits

Cash $59,750

Accounts Receivable 3,300

Prepaid Insurance 4,700

Equipment 64,600

Land 23,000

Accounts Payable $29,230

Deferred Revenue 1,500

Notes Payable (long term) 74,000

Common stock 5,000

Retained Earnings 14,500

Dividends 0

Service Revenue 35,700

Salaries and Wages Expense 3,900

Repairs and Maintenance Expense 410

Office Expense 270

Totals $159,930 $159,930

Required:

1. Prepare an Income Statement for the year ending December 31;

2. Calculate the Net Profit Margin

3. Briefly explain what the profit margin means for Mckenzie Riding, Inc.