Divine Cosmetics Co., a company that provides skin care treatment, was started on June 1 with an investment of $26,200 cash. Following are the assets and liabilities of the company at June 30 and the revenues and expenses for the month of June.

No additional investments were made by stockholders in June, but a dividend of $1,700 in cash was paid during the month.
Instructions

(a) Prepare an income statement and retained earnings statement for the month of June and a balance sheet at June 30, 2006.

(b) Prepare an income statement and retained earnings statement for June assuming the following data are not included above: (1) $800 of revenue was earned and billed but not collected at June 30, and (2) $100 of gas and oil expense was incurred but not paid.

Transcribed Image Text:

Cash $10,000 Notes Payable $13,000 Accounts Receivable 4,000 Accounts Payable 1,200 Service Revenue 5,500 Supplies Expense 1,600 Cosmetic Supplies 2,000 Gas and Oil Expense 800 Advertising Expense 500 Utilities Expense 300 Equipment 25,000