On October 1, Ebony Ernst organized Emst Consulting on October 3, the owner cont

Question

On October 1, Ebony Ernst organized Emst Consulting on October 3, the owner contribuned $84,000 in the business. On October 31, the company's records show the following hems and amounts Cash $11,36e Cash withdrawals by Accounts receivable 14,800 Consulting revenue office supplies Land Office equipment 18,600 Telephone expense 14,800 3,5se ,8e0 760 3,258 Rent expense 46,800 Salaries expense Accounts payable 8,5 Miscellaneous expenses8 Owner investeents 84,00 Using the above information prepare an October statement of owner's equity for Enst Consulting For Month Ended October 31

Explanation / Answer

Solution:

Statement of Owner's Equity

E. Ernst, Capital, October 1

Plus

Investment by owner

$84,000

Net income

$2,110

Less:

Withdrawals by owner

$2,000

E. Ernst, Capital, October 31

$84,110

Working:

Income Statement

Revenues:

Consulting fees earned

14000

Expenditure:

Rent

3550

Salaries

7000

Telephone

760

Misc.

580

11890

Net income

2110

Statement of Owner's Equity

E. Ernst, Capital, October 1

Plus

Investment by owner

$84,000

Net income

$2,110

Less:

Withdrawals by owner

$2,000

E. Ernst, Capital, October 31

$84,110

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