On June 1 Eckersley Service Co. was started with an initial investment in the company of $26,200 cash. Here are the assets and liabilities of the company at June 30, 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 $2,000.
Instructions
(a) Prepare an income statement and a retained earnings statement for the month of June and a balance sheet at June 30, 2010.
(b) Briefly discuss whether the company€™s first month of operations was a success.
(c) Discuss the company€™s decision to distribute adividend.

Transcribed Image Text:

Cash Accounts receivable Revenue Supplies Advertising expense Equipment $ 4,600 4,000 7,000 2,400 400 29,000 Notes payable Accounts payable Supplies expense Gas and oil expense Utilities expense Wage expense $12,000 500 1,000 600 300 1,400