Prepare a balance sheet at june 30 2017

P1-3A
P1-3A 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 "?" .
(a) ELITE SERVICE CO.
Income Statement
For the Month Ended June 30, 2017
Revenues
Service revenue $7,500
Expenses
Salaries and wages expense $1,400
Supplies expense 300
Maintenance and repairs expense 400
Advertising expense 1,000
Utilities expense 600
Total expenses 3,700
Net income $3,800
ELITE SERVICE CO.
Retained Earnings Statement
For the Month Ended June 30, 2017
Retained earnings, June 1 Value
Add: Net income 3,800
?
Less: Dividends -1,400
Retained earnings, June 30 $2,400
ELITE SERVICE CO.
Balance Sheet
June 30, 2017
Assets
Cash $4,600
Accounts receivable 4,000
Supplies 2,400
Equipment 26,000
Total assets $37,000
Liabilities and Stockholders' Equity
Liabilities
Accounts payable $500
Notes payable 12,000
Total liabilities 12,500
Stockholders' equity
Common stock 22,100
Retained earnings 2,400 24,500
Total liabilities and stockholders' equity $37,000
Apparently it seems that the first month was success as the company has generted net income.
As the company has earned enough net income and there is no problem of cash flow therefore the company
has paid dividend to shareholders, the company has paid around 37% of its dividend.