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

Amy Swoboda, your best friend, is considering making an investment in Larrabee Design, Inc. Amy 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 Amy's questions. In your note, state the amounts of Larrabee 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 Larrabee Design, Inc Trial Balance December 31, 2016 Cash Accounts receivable 4 Prepaid expenses 5 Building 47,000 224.000 Accounts payable s- 1- 50,400 98,000 80,000 96,100 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 23,000 3,000 79 220,000