2. On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner

Question

2. On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $84,580 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.  

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

Cash $ 9,390 Cash dividends $ 2,650 Accounts receivable 16,000 Consulting revenue 16,000 Office supplies 3,830 Rent expense 4,190 Land 45,980 Salaries expense 7,570 Office equipment 18,550 Telephone expense 830 Accounts payable 9,060 Miscellaneous expenses 650 Common Stock 84,580

Explanation / Answer

Income statement

For the month ended October 31

Revenue Consulting revenue 16000 Expense Rent expense 4190 Salaries expense 7570 Telephone expense 830 Miscellaneous expenses 650 Total Expenses 13240 Net Income (loss) 2760

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