The trial balance of Luxury Specialties, Inc., follows.

Ashley Richards, your best friend, is considering investing in Luxury Specialties, Inc. Ashley seeks your advice in interpreting this 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 Ashley€™s questions. In your note, state the amounts of Luxury Specialties total assets, total liabilities, and net income or net loss for the year.
Also show how you computed eachamount.

Transcribed Image Text:

Luxury Specialties Trial Balance December 31, 2010 Accounts receivab Prepaid expenses Equipment 11,000 48,000 5,000 239,000 105,000 $108,000 90,000 35,000 38,000 Accounts payabl. Note payable. Retained ear Dividends service revenue Rent expense 19,000 257,000 . 28,000 4,000 Wage expense.. 61,000 Supplies expense.8,000