Solution-Prepare an income statement and a retained earnings

Prepare an income statement and a retained earnings

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Reference no: EM13572604

Special Delivery was started on May 1 with an investment of $45,000 cash. Following are the assets and liabilities of the company on May 31, 2012, and the revenues and expenses for the month of May, its first month of operations.

Accounts receivable	$6,200	Notes payable	$28,000
Service revenue	10,400	Salaries and wages expense	2,000
Advertising expense	800	Equipment	56,000
Accounts payable	2,400	Maintenance and repairs expense	2,900
Cash	15,800	Insurance expense	400

No additional common stock was issued in May, but a dividend of $1,700 in cash was paid.

Instructions

(a) Prepare an income statement and a retained earnings statement for the month of May and a balance sheet at May 31, 2012.

(b) Briefly discuss whether the company"s first month of operations was a success.

Reference no: EM13572604

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Prepare an income statement and a retained earnings

Reference no: EM13572604

Reference no: EM13572604

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