Reference no: EM131557750

Assignment

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 1,050 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 it with your analysis.