Final answer:
The question revolves around using an adjusted trial balance to assess financial transactions related to stock trading and changes in a bank's balance sheet due to shifts in business strategy.
Step-by-step explanation:
The topic in question relates to the use of an adjusted trial balance for the Stockton Company to perform financial assessments and decision-making regarding the buying and selling of stocks. Specifically, it involves understanding the financial impact of these transactions on the company's net profit and how changes in a business plan can alter a bank's balance sheet. The illustrative examples given provide scenarios where a company might incur transaction fees that would reduce its net profit from stock trading, and how a bank's assets and liabilities are impacted by its lending and reserve practices.
When calculating net profit from trading stocks, you must subtract the cost of purchasing the stocks and any associated transaction fees from the selling price. Adjustments to a business plan, such as those made by Singleton Bank, show a shift in its assets, with an increase in loans given and a maintenance of its deposit liabilities, impacting overall financial statements.