Question

Return to question Required Informatilon (The following information applies to the questions displayed below On October 1, Ebony Emst organized Ernst Consulting: on October 3, the owner contributed $84,000 In assets In exchange for lts 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 $11,368Cash dividends 5 2,086 14,080 3,558 7,800 768 580 14,8e0 Consulting revenue 3,250 Rent expense 46,00 Salaries expense 18,880 Telephone expense 8,580 Miscellaneous expenses 84,800 Also assume the following a The owners intial investment consists of $38.000 cash and $46.000 in land in exchange for its common stock b. The company's $18,000 equlpment purchase is pald In cash. c. The accounts payable balance of $8.500 consists of the $3,250 office supplies purchase and $5,250 In employee salarles yet to be pald. d. The company's rent, telephone, and miscellaneous expenses are pald in cash. e. No cash has been collected on the $14.000 consulting fees earned Using the above Information prepare an October 31 statement of cash flows for Ernst Consulting. (Cash utflows should be Indicated by a minus sign.)

Answer 1

Answer:

Statement of cash flow
	Amount($)	Amount($)
Cash flows from operating activities
Collection from customers	-
Cash paid for rent	-3,550
Cash paid for telephone expenses	-760
Cash paid to employees (7000-5250)	-1,750
Cash paid for miscelleneous expenses	-580
Net cash from operating activities		-$6,640
Cash flows from investing activities
Cash paid for office equipment	-18,000	-18,000
Net cash used investing activities		-$18,000
Cash flows from financing activities
Cash Investment from owner	38,000
Cash Divedends to owner	-2,000	36,000
Net cash from financing activities		$ 36,000
Net Increase in cash and cash equivalents		$ 11,360
Cash Balance, October 1		$0
Ending Balance October 31		$11,360