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 "?" .

After you have completed P1-3A consider the following additional question. 1. Assume that service revenue and salaries and wages changed to $9,000 and $1,800 respectively.The additional revenue earned were all on account. Revise the financial statements to reflect these changes.

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 $7,500 $1,400 1,000 600 400 300 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 3,700 $3,800 $0 3,800 3,800 1,400 $2,400 ELITE SERVICE CO. Balance Sheet June 30, 2017 Assets Cash Accounts receivable Supplies Equipment Total assets Liabilities and Stockholders' Equity Liabilities Notes payable $12,000 Accounts payable 500 $4,600 4,000 2,400 26,000 $37,000 $12,000 500 1,000 600 300 1,400 Total liabilities Stockholders' equity Common stock Retained earnings Total liabilities and stockholders' equity 12,500 22,100 2,400 24,500 $37,000 After you have completed P1-3A consider the following additional question. 1. Assume that service revenue and salaries and wages changed to $9,000 and $1,800 respectively. The additional revenue earned were all on account. Revise the financial statements to reflect these changes