The trial balance of Colby Design, Inc., follows:

Clara Lancey, your best friend, is considering making an investment in Colby Design, Inc. Clara 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 Clara’s questions. In your note, state the amounts of Colby Design’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 Colby Design, Inc. Tríal 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 18 13,000 55,000 6,500 104,000 235,000 50,300 94,000 50,000 167,200 24,000 200,000 28,000 6,000 85,000 5,000 $ 561,500 $ 561,500