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:

In June, the company issued no additional stock but paid dividends of $1,400.
Instructions
(a) Prepare an income statement and a 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.

Transcribed Image Text:

Cash Accounts receivable Service revenue Supplies Advertising expense Equipment Common stock 4,600 Notes payable ,000 Accounts payable 7,500 Supplies expense 2,400 $12,000 500 1,000 600 300 1,400 Maintenance and repairs expense 00 Utilities expense 26,000 Salaries and wages expense 22,100