accounting

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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.

  • accounting -

    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.

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