Reference no: EM131643210

Assignment

Prepare an income statement, retained earnings statement and balance sheet; discuss results On June 1, 2017, Elite Service Co. was started with an initial investment in the company of $22,100 cash.

Here are the assets, liabilities, and common stock of the company at June 30, 2017, and the revenues and expenses for the month of June, its first month of operations:

Cash	$4,600	Notes payable	$12,000
Accounts receivable	4,000	Accounts payable	500
Service revenue	7,500	Supplies expense	1,000
Supplies	2,400	Maintenance and repairs expense	600
Advertising expense	400	Utilities expense	300
Equipment	26,000	Salaries and wages expense	1,400
Common Stock	22,100

In June, the company issued no additional stock but paid dividends of $1,400.

Instructions

(a) Prepare an income statement and retained earnings statement for the month of June and a balance sheet at June 30, 2017.
(b) Briefly discuss whether the company's first month of operations was a success.
(c ) Discuss the company's decision to distribute a dividend.

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