income
statement
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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 |
600 |
|
Advertising expense |
400 |
Utilities expense |
300 |
|
Equipment |
26,000 |
Salaries and wages |
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.
Usethe Excel®spreadsheet to show
your work andsubmit with your
analysis. There are two documents to be submitted (Excel spreadsheet
showing the financial statements and analysis on Word document).
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