P2-67B. (Learning Objective 4: Analyzing a trial balance) The trial balance of Advantage Specialties, Inc., follows:

Rebecca Smith, your best friend, is considering making an investment in Advantage Specialties, Inc. Rebecca 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 Rebecca’s questions. In your note, state the amounts of Advantage 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 Advantage Specialties, Inc. Trial Balance December 31, 20X6 1 2 Cash Accounts receivable 3 4 Prepaid expenses 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 12,100 48,000 6,000 225,000 95,000 105,000 87,500 35,000 37,000 22,000 244,600 23,000 5,000 67,000 6,000 509,100 509,100 D