Question

Required information Use the following information for exercises 15 to 18 LO P2 [The following information applies to the questions displayed below.] On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $83,220 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 $13,840 12,000 2,530 45,840 17,200 7,810 83,220 Cash dividends Consulting revenue Rent expense Salaries expense Telephone expense Miscellaneous expenses $ 1,280 12,000 2,770 6,120 820 630

Answer 1

Ernst Consulting Statement of Cash Flows
Cash Flows from Operating Activities
Cash paid to employees	- 840
Cash paid for rent	-2,770
Cash paid for telephone expense	-820
Cash paid for miscellaneous expenses	-630
Net cash used in Operating Activities		-5,060
Cash Flows from Investing Activities
Cash paid for purchase of equipment	-17,200
Net cash used in Investing Activities		- 17,200
Cash Flows from Financing Activities
Cash invested by owner	37,380
Cash dividends	-1,280
Net cash flows from Financing Activities		36,100
Net increase ( decrease) in cash		13,840
Cash balance, October 1		0
Cash balance, October 31		13,840