On June 1, 2017, Elite Service Co. was started with an initial investment

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.

NOTE:  Enter a number in cells requesting a value; enter either a number or a formula in cells with a “?” .

Here’s the SOLUTION

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