Question

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 in exchange for its common stock to launch the business. On October 31, the company's records show the following i and amounts. Retained earnings, October 1 as $0. Cash Accounts receivable office supplies Land Office equipment Accounts payable Common stock $11,362 14,000 3,250 46,000 18,000 8,500 84,000 Cash dividends Consulting revenue Rent expense salaries expense Telephone expense Miscellaneous expenses $ 2,000 14,000 3,550 7,000 760 580 Exercise 1-18 Preparing a statement of cash flows LO P2 Also assume the following:

Answer 1

Solution 1 Ernst consulting : statement of cash flows. for the month ended october 31 Amount:25) Amount 25 cash flows from operating Activities: cash received from customers. $0 cash paid to employees : $1,750) Cash paid for vent. $13,550) cash paid for Telephone expenses : . $(760) Cash paid for miscellaneous expenses. $ (580) Nel cash used by operating activities. $26,640) cash flows from. Investing Activities: - cash paid for office equipment : $18,000) Net cash used by Investing activities $118,000) cash flows from Financing Activities: Investments by owner $38,000 withdrawals by owner $ 12,000) Net cash provided by Financing activities $36,000 Net "Increase in cash $ 11,360 cash balance, october 1 $ 0. cash balance october 31 $11,360 Notes Dcash paid to salaries Expense - salaries yet to be paid employees = $1,000 - $5,250 => $1,750, .