The trial balance of Baker Specialties, Inc., follows:

Veronica Gomez, your best friend, is considering investing in Baker Specialties, Inc. Veronica seeks your advice in interpreting the company’s information. Specifically, she asks how to use this trial balance to compute the company’s total assets, total liabilities, and net income or net loss for the year.

Requirement
1. Write a short note to answer Veronica’s questions. In your note, state the amounts of Baker’s total assets, total liabilities, and net income or net loss for the year. Also show how you computed each amount.

Transcribed Image Text:

A1 Baker Specialties, Inc. Trial Balance December 31, 2018 2 Cash 3 Accounts receivable 4 Prepaid expenses 5 Building 6 Equipment 7 Accounts payable 8 Note payable 9 Common stock 10 Retained earnings 11 Dividends 12 Service revenue 13 Rent expense 14 Advertising expense 15 Wage expense 16 Supplies expense 17 Total 13,000 49,000 5,000 103,000 225,000 50,400 94,000 65,000 174,600 20,000 160,000 55,000 3,000 64,000 7,000 $ 544,000 $ 544,000 18