Question

Required information [The following information applies to the questions displayed below.) On October 1, Ebony Ernst organized Ernst Consulting: on October 3, the owner contributed $83,850 in assets in exchange for its common stock to launch the business. On October 31, the company's records show the following items and amounts. Cash Accounts receivable Office supplies Land Office equipment Accounts payable Common Stock $11,580 Cash dividends 14,000 Consulting revenue 3, 140 Rent expense 46,000 Salaries expense 17,820 Telephone expense Ana Miscellaneous expenses 83,850 $ 1,890 14,000 3,390 6,860 880 690 Using the above information prepare an October income statement for the business. ERNST CONSULTING Income Statement Revenues Consulting revenue $ 14,000 $ 14,000 Total revenues Expenses Salaries expense Rent expense Telephone expense Miscellaneous expenses 6,860 3,390 880 690 Total expenses Net income 11,820 2,180 $

Answer 1

ERNST CONSULTING Income Statement Month Ended October 31 for Revenues Consulting revenue $14,000 $14,000 Total revenues Expenses Miscellaneous expenses hent expense Salaries expense Telephone expense $ 690 $3,390 $ 6,860 $ 880 Less: Total Net expenses Income $ 11,820 $2, 180 d) ERNST CONSULTING statement of Retained Earnings for month Ended October 31 Retained earnings, Oct. 1 Add: Met Income - $2,180 $ 2,180 $ 1,890 $ 290 les: Dividends Retained earnings, Oct 31

Casho ERNST CONSULTING Balance Sheet As of October 31 Assets - Liabilities $ 11,580 Accounts Payable Accounts Receivable $ 14,000 hand $ 46,000 t Equity office equipment $ 17,820 Common stock office supplies $3,190 Retained earnings $8,400 $83,850 $290 Total equity $84, 140 $92,540 Total liabilities and equity $92,540 Total assets Calculation: Retained earnings are calculated above in part (2).