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

Rachel Sill, your best friend, is considering making an investment in Famous Specialties, Inc. Rachel 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
Write a short note to answer Rachel’s questions. In your note, state the amounts of Famous Specialties’ total assets, total liabilities, and net income or net loss for the year. Also show how you computed eachamount.

Transcribed Image Text:

Famous Specialties, Inc. Trial Balance December 31, 2012 Cash Accounts receivable Prepaid expenses Equipment Building Accounts payable Note payable Common stock Retained earnings Dividends Service revenue Rent expense Advertising expense Wage expense Supplies expense Total S 27,000 40,000 6,000 239,000 97,000 $104,000 85,000 75,000 112,000 16,000 160,000 24,000 10,000 73,000 4,000 $536,000 S536,000