Revenues
revenue
$7,000.00
Total revenue
$7,000.00
Expenses
Supplies expense $1,000.00
Gas and oil expense
$600.00
Utilities expense
$300.00
Wage expense
$1,400.00
Advertising expense $400.00
Total expenses $3,700.00
Net income $3,300.00
Retained earnings statement
R/E as of 6/30/2010 $-
Net Income $3,300.00
Dividends paid during 2010 $2,000.00
$1,300.00
b. the company's first month of operation was a success because they made $1,300.00 in June.
c.
initial investment in the company of $26,200 cash. Here are the assets and liabilities for the month of June, its first month of operation.
Cash $4,600.00
Accounts receivable $4,000.00
Revenue $7,000.00
Supplies $2,400.00
Advertising expense $400.00
Equipment $29,000.00
Notes Payable $12,000.00
Accounts payable $500.00
Supplies expense $1,000.00
Gas and oil expense $600.00
Utilities expense $300.00
Wage expense $1,400.00
In June, the company issued no additional stock, but paid dividends of $2000.
a. Prepare a income statement and a retained earnings 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 a dividend.
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