Financial statements for new Fix-It-Up Co
Not what you're looking for?
On June 1 Fix-It-Up Service Co. was started with an initial investment in the company of $26,200 cash. Here are the assets and liabilities of the company at June 30, and the revenues and expenses for the month of June, its first month of operations:
Cash $ 4,600 Notes payable $14,000
Accounts receivable 4,000 Accounts payable 500
Revenue 8,000 Supplies expense 1,000
Supplies 2,400 Gas and oil expense 600
Advertising expense 400 Utilities expense 300
Equipment 32,000 Wage expense 1,400
In June, the company issued no additional stock, but paid dividends of $2,000.
a) Prepare an income statement and a retained earnings statement for the month of June and a balance sheet at June 30, 2007.
b) Briefly discuss whether the company's first month of operations was a success.
c) Discuss the company's decision to distribute a dividend.
Purchase this Solution
Solution Summary
The solution presents the balance sheet and income statement in more proper form. Also included are comments about the the financial statements and responses to questions posed in the problem.
Solution Preview
a. The income statement and balance sheet are shown on attached Excel, but you may want to add some proper formatting like headings, classification between current and non-current assets and liabilities. There is a question in my mind as to whether the dividend paid should maybe be wages to the shareholder, but we aren't told.
b. The first month of operations looks good (even if wages were reported to the shareholder). A 53% net profit is excellent. Of course, we have no depreciation or ...
Purchase this Solution
Free BrainMass Quizzes
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.
Business Processes
This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.
Social Media: Pinterest
This quiz introduces basic concepts of Pinterest social media
SWOT
This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce