Question

Required information Use the following information for exercise 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 $84,000 in assets to launch the business. On October 31, the company's records show the following items and amounts. $ 2,000 14,000 3,550 7,000 760 Cash withdrawals by owner Consulting revenue Rent expense $11,360 Cash 14,000 Accounts receivable office supplies Land office equipment Accounts payable Owner investments 3,250 Salaries expense Telephone expense Miscellaneous expenses 46,000 18,000 8,500 84,000 580

Answer 1

Solution:

Balance Sheet:

Assets		Liabilities
Cash	11,360	Accounts Payable	8,500
Accounts receivable	14,000
Office supplies	3,250	Owner's Equity
Land	46,000	E. Ernst, Capital	84,110
Office equipment	18,000
	92,610		92,610

　

Working:

Income Statement
Revenues:
Consulting fees earned		14,000
Expenses
Rent expense	3,550
Salaries expense	7,000
Telephone expense	760
Miscellaneous expense	580	11,890
Net income / Loss		2,110
Statement of Owner's Equity
E. Ernst, Capital, October 1
Plus:
Investment by owner	84,000
Net income / Loss	2,110	86,110
Minus:
Withdrawals by owner		2,000
E. Ernst, Capital, October 31		84,110