Your best friend is considering making an investment in Photometric Tailoring Co. She seeks your advice in interpreting the company's information. Specifically, she asks whether this trial balance provides the data to prepare a balance sheet and an income statement.

Required
Write a memo to answer your friend's questions. State which accounts go on the balance sheet and which accounts go on the income statement. In your memo, state the amount of net income that Photometric Tailoring earned in 20X9, and explain your computation.

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Photometric Tailoring Co Trial Balance December 31, 20X9 Cash Accounts receivable. Prepaid expenses Equipm Accounts payab l. Note payabl $12,000 .47,000 4,000 236,000 $105,000 92,000 30,000 32,000 139,000 Retained earnings.... Service revenue. Salary expens Rent expense Su Advertising expense... Total 63,000 26,000 7,000 3,000 $398,000 $398,000