Question

O Required information [The following information applies to the questions displayed below) On October 1, Ebony Erst organized Ernst Consulting; on October 3, the owner contributed $82,650 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. Retained earnings, October 1 as $0. Cash Accounts receivable Office supplies Land office equipment Accounts payable Common stock $15,200 12, 410 1,770 46,080 16,450 6,060 82,650 Cash dividends Consulting revenue Rent expense Salaries expense Telephone expense Miscellaneous expenses $ 460 12, 410 2,140 5, 300 750 560 Using the above information prepare an October 31 balance sheet for Ernst Consulting, ERNST CONSULTING Balance Sheet 0 $ 0 0 0 $

Answer 1

Ernst Consulting
Balance sheet
October 31
Assets		Liabilities
Cash	$     15,200	Accounts Payable	$          6,060
Accounts receivable	$     12,410
Office Supplies	$       1,770	Total liabilities	$          6,060
Land	$     46,080	Stockholder's equity
Office equipment	$     16,450	Common stock	$       82,650
		Retained earnings	$          3,200
		Total Stockholder's equity	$       85,850
Total assets	$     91,910	Total liabilities & stockholder's equity	$       91,910

Ernst Consulting
Income statement
For the month of October 31
Consulting revenues		$        12,410
Expenses:
Rent expense	$          2,140
Salaries Expense	$          5,300
Telephone expense	$             750
Miscellaneous expense	$             560
Total expenses		$          8,750
Net income		$          3,660

Ernst Consulting
Statement of Retained earnings
For the month of October 31
Retained earnings, beginning		$                  0
Add: net income		$          3,660
Less: Dividends (if any)		$              460
Retained earnings, endings		$          3,200