This exercise should be used in conjunction with Exercises 1-24A through 1-26A.

The owner of Earl Copy Center seeks your advice as to whether he should cease operations or continue the business. Complete the report giving him your opinion of net income, dividends, financial position, and cash flows during his first month of operations. Cite specifics from the financial statements to support your opinion. Conclude your memo with advice on whether to stay in business or cease operations.

Payments of cash: Acquisition of equipment.. $420,000 $ Cash balance, June 30, 2010.. Cash balance, July 31, 2010.... Cash receipts: Dividends.. 4,800 10,900 Retained earnings June 30, 2010. Retained earnings July 31, 2010 Utilities expense Adjustments to reconcile Issuance (sale) of stock 69,500 2,200 to owners Rent expense. Common stock.. 10,000 69,500 420,000 Equipment. Office supplies.. Accounts payable . net income to net cash 14,800 provided by operations.. Salary expense. 2,200 167,000 17,000 543,200 Service revenue..