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

Question

On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $84,200 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. Cash $ 10,710 Cash dividends $ 2,180 Accounts receivable 14,800 Consulting revenue 14,800 Office supplies 3,450 Rent expense 3,750 Land 46,030 Salaries expense 7,160 Office equipment 18,170 Telephone expense 780 Accounts payable 8,630 Miscellaneous expenses 600 Common Stock 84,200

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

Explanation / Answer

Income Statement For Month Ended October 31 Revenues Consulting fees earned 14800 Total revenues 14800 Expenses Salaries expense 7160 Rent expense 3750 Telephone expense 780 Miscellaneous expenses 600 Total expenses 12290 Net income 2510

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