Question

Required information

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On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $85,460 in assets to launch the business. On October 31, the company’s records show the following items and amounts.

Cash	$	6,650		Cash withdrawals by owner	$	3,490
Accounts receivable		15,520		Consulting revenue		15,520
Office supplies		4,640		Rent expense		4,920
Land		46,000		Salaries expense		8,500
Office equipment		19,560		Telephone expense		890
Accounts payable		9,890		Miscellaneous expenses		700
Owner investments		85,460

Using the above information prepare an October income statement for the business.

Answer 1

Income statement

October 31

Revenue
Consulting revenue		15520
Expense
Rent expense	4920
Salaries expense	8500
Telephone expense	890
Miscellaneous expense	700
Total expense		15010
Net income		510