P2-60A. (Learning Objective 4: Analyzing a trial balance) 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 each amount.

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A1 B D E Luxury Specialties Trial Balance 1 December 31, 20X6 2 Cash $ 12,000 3 Accounts receivable 46,000 4 Prepaid expenses 3,000 5 Equipment 6 Building 7 Accounts payable 8 Note payable 9 Share capital 10 Retained earnings 11 Dividends 12 Service revenue 13 Rent expense 14 Advertising expense 15 Wage expense 16 Supplies expense 17 Total 18 $ 524,000 $ 524,000 245,000 101,000 $ 107,000 95,000 32,000 35,000 19,000 255,000 308,000 5,000 58,000 7,000