A summary of the operations of Stellenbach Company for the year ended May 31, 2003, is shown below. “Advertising expense.......... $ 2,760 ~Supplies expense............ 37,820 “ Rent ExXpPenSerinn star et en 1,500 VSalariesexpensé 7. ..skeeh « : 18,150 Miscellaneous expense........ 4,170 DividendSerusnc casas cee or 12,400 Retained earnings (6/1/02) ..... 156,540 IncomettaxeS ac co tiie es = 21,180 Consulting fees (revenues). ... . 115,100 Administrative expense ....... 7,250 1. Determine the net income for the year by preparing an income statement. (There are 2,000 shares of stock outstanding.) 2. Prepare a statement of retained earnings for the year ended May 31, 2003. 3. Prepare a statement of retained earnings assuming that Stellenbach had a net loss for the year of $25,000. 4. Interpretive Question: Assuming a loss as in (3), is it a good idea for Stellenbach to still pay its shareholders dividends?