A summary of the operations of Quincy Company for the year ended May 31, 2012, is shown below.

Required:
1. Determine the net income for the year by preparing an income statement. (There are 8,000 shares of stock outstanding.)
2. Prepare a statement of retained earnings for the year ended May 31, 2012.
3. Prepare a statement of retained earnings assuming that Quincy had a net loss for the year of $38,000.
4. Interpretive Question: Assuming a loss as in (3), is it a good idea for Quincy to still pay its shareholdersdividends?

Transcribed Image Text:

19,500 175,670 20,760 .. 25,340 Consulting fees (revenues)176,400 13,900 S4,650 Dividends 38,410 Retained earnings (6/1/11) 2,400 ncome taxes Advertising expense Supplies expense Salaries expense Miscellaneous expense.. 10,200 Administrative expense