Amber Shea, owner of the Shea Law Firm, is considering adding another lawyer. Courtney Martinez is considering joining Shea and asks to see Shea's financial information. Shea gives Martinez the firm's trial balance, which follows. Help Martinez decide whether to join the firm by answering these questions for her.

1. How much are the firm's total assets? total liabilities? net income or net loss?

2. Suppose Shea earned all the service revenue on account. Make a single journal entry to record the revenue, set up the two \(\mathrm{T}\)-accounts affected, and post to those accounts.

3. In your own words, describe the accounting process that results in Shea's \(\$ 12,000\) balance for Cash. Use the following terms in your explanation: account, balance, journal ledger, post, and trial balance.

4. If Martinez joins Shea as a co-owner of the law firm, what form of business organization will the firm take? If necessary.

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SHEA LAW FIRM Trial Balance December 31, 2008 Balance Account Title Cash Accounts receivable Debit Credit $ 12,000 27,000 Prepaid expenses Furniture 4,000 31,000 Accounts payable $ 35,000 Amber Shea, capital Amber Shea, withdrawals $3,000 30,000 Service revenue 121,000 Rent expense 26,000 Utilities expense Wage expense Supplies expense Total 7,000 $186,000 $186,000 3,000 23,000