The owners of Electrix Company are selling the business. They offer the following trial balance to prospective buyers:

Your best friend is considering buying Electrix Company. He seeks your advice in interpreting this information. Specifically, he asks whether this trial balance is the same as a balance sheet and an income statement. He also wonders whether Electrix must be a sound company. After all, the accounts are in balance.

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Write a short note to answer your friend's questions. To aid his decision, state how he can use the information on the trial balance to compute Electrix's net income or net loss for the current period. State the amount of net income or net loss in your note.

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ELECTRIX COMPANY TRIAL BALANCE DECEMBER 31, 19XX Cash.... $ 7,000 Accounts receivable. 11,000 Prepaid expenses. 4,000 Land......... 31,000 Accounts payable...... $ 31,000 Note payable......... 20,000 Common stock......... 33,000 Dividends.......... 21,000 Service revenue.. 47,000 Rent expense.. 14,000 Advertising expense. 3,000 Wage expense. 33,000 Supplies expense.. 7,000 $131,000 $131,000