Description
details attached
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.
Assignment Steps
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
$ 4,600Notes payable
$12,000
Accounts receivable 4,000Accounts payable
500
Service revenue
7,500Supplies expense
1,000
Supplies
2,400Maintenance and repairs expense
600
Advertising expense
400Utilities expense
300
Equipment
26,000Salaries and wages expense
1,400
Common stock
22,100
In June, the company issues no additional stock but paid dividends of $1,400.
Use and complete the Excel template in Student Materials for the following:
(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.(at least one
paragraph)
(c) Discuss the company’s decision to distribute a dividend. (at least one paragraph)
Note: There are separate worksheet tabs in the Excel template for the items above.
Click the Assignment Files tab to submit your completed Excel spreadsheet.
ACC 290 WEEK 1 ASSIGNMENT
ELITE SERVICE CO.
STUDENT NAME:
P1-3A Prepare an income statement, retained earnings statement and balance sheet; discuss results
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:
Cash
Accounts receivable
Service revenue
Supplies
Advertising expense
Equipment
Common Stock
$4,600
4,000
7,500
2,400
400
26,000
22,100
Notes payable
Accounts payable
Supplies expense
Maintenance and repairs expense
Utilities expense
Salaries and wages expense
In June, the company issued no additional stock but paid dividends of $1,400.
Instructions
(a)
Prepare an income statement and 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.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a “?” .
(a)
ELITE SERVICE CO.
Income Statement
For the Month Ended June 30, 2017
Revenues
Service revenue
Expenses
Salaries and wages expense
Supplies expense
Maintenance and repairs expense
Advertising expense
Utilities expense
Total expenses
Net income
Value
Value
Value
Value
Value
Value
ELITE SERVICE CO.
Retained Earnings Statement
For the Month Ended June 30, 2017
Retained earnings, June 1
Add: Net income
Less: Dividends
Retained earnings, June 30
?
?
Value
Value
?
Value
?
ELITE SERVICE CO.
Balance Sheet
June 30, 2017
Assets
Cash
Accounts receivable
Supplies
Equipment
Total assets
Liabilities and Stockholders’ Equity
Liabilities
Accounts payable
Value
Notes payable
Value
Total liabilities
Stockholders’ equity
Common stock
Value
Retained earnings
Value
Total liabilities and stockholders’ equity
Value
Value
Value
Value
?
?
?
?
$12,000
500
1,000
600
300
1,400
(b)
Briefly discuss whether the company’s first month of operations was a success.
WRITE YOUR RESPONSE HERE:
(c )
Discuss the company’s decision to distribute a dividend.
WRITE YOUR RESPONSE HERE:
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