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Purpose of Assignment
The purpose of this assignment is to help students become familiar with the presentation of the income statement and the retained earnings statement, including how parts of the financial statement is evaluated to determine the operational success of the business.
Resources: Financial Accounting: Tools for Business Decision Making, p. 36
Scenario: On June 1, 2017, Elite Service Co. was started with an initial investment in the company of $22,100 cash. Below are the assets, liabilities, and common stock of the company June 30, 2017, and the revenues and expenses for the month of June, its first month of operations:
|Cash||$ 4,600||Notes payable||$12,000|
|Accounts receivable||4,000||Accounts payable||500|
|Service revenue||7,500||Supplies expense||1,000|
|Supplies||2,400||Maintenance and repairs expense||600|
|Advertising expense||400||Utilities expense||300|
|Equipment||26,000||Salaries and wages expense||1,400|
In June, the company issues no additional stock but paid dividends of $1,400.
Prepare an income statement, retained earnings statement, and balance sheet analyzing your findings using the questions below, in a total of 1,050 words:
Use the Excel® spreadsheet to show your work and submit it with your analysis.
Click the Assignment Files tab to submit your assignment.
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