Discuss the companys decision to distribute a dividend

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Reference no: EM131500237 , Length: word count : 1000

Resources: Financial Accounting: Tools for Business Decision Making, p. 36

Scenario: On June 1, 2017, Elite Service Co. was started with an initial investment in the company of $22,100 cash. Below are the assets, liabilities, and common stock of the company 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 issues no additional stock but paid dividends of $1,400.

Prepare an income statement, retained earnings statement, and balance sheet analyzing your findings using the questions below, in a total of 700-1000 words:

Briefly address whether the company's first month of operations was a success.

Discuss the company's decision to distribute a dividend.

Use the Excel® spreadsheet to show your work and submit with your analysis. There are two documents to be submitted (Excel spreadsheet showing the financial statements and analysis on Word document).

Reference no: EM131500237

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