gnment On October 1. Ebony Ernst organized Enst Consultingr on October 3 the own
ID: 2514708 • Letter: G
Question
gnment On October 1. Ebony Ernst organized Enst Consultingr on October 3 the owner contributed $83.850 im assetsin exchange for its commo and amounts. n stock to launch the business. On October 31, the company's records show the following items Cash Accounts receivable 14,eee Consulting revenue Office supplies Land Office equipment 17,820 Telephone expense Accounts payable Common Stock $11,580 Cash dividends $ 1,890 14,000 3,390 6,860 880 690 3,140 Rent expense 46,800 Salaries expense 8,400 Miscellaneous expenses 83,85e Also assume the following: a. The owner's initial investment consists of $37,850 cash and $46.000 in land in exchange for its common stock. b. The company's $17,820 equipment purchase is paid in cash. unts payable balance of $8.400 consists of the $3.140 office supplies purchase and $5.260 in employee salaries yet to be paid. d. The company's rent, telephone, and miscellaneous expenses are paid in cash. e. No cash has been collected on the $14,000 consulting fees earned Using the above information prepare an October 31 statement of cash flows for Ernst Consulting. by a minus sign.) Cash outflows should be indica KPrev5 of 7Next >Explanation / Answer
ERNST CONSULTING Cash flow for the month of October Cash Flow from Operating Activities: Cash payment for salaries -1600 Rent expense -3390 Telephone Expense -880 Miscellaneous expense -690 Cash flow from operating activities -6560 Cash flow from invensting activities: Purchase of equipment -17820 Cash flow from financing activities Issue of common stock 37850 Dividends paid -1890 Cash flow from financing activities 35960 Net Cash Flow 11580 Ending Cash balance 11580 Beginning cash balance 0 Net increase in cash balance 11580 SONY ELECTRONIC Balance Sheet as at December 31 Assets Liabilities and stockholders' Equity Cash 57140 Accounts Payable 8570 Accounts Receivable 800 Office Supplies 1270 Common Stock 65500 Electrical Equipment 14500 Retained Earnings 2260 Office Equipment 2620 Total Stockholders' Equity 67760 Total Assets 76330 Total Liabilities and Stockholders' Equity 76330 SONY ELECTRONIC Cash flow for the month of December Cash Flow from Operating Activities: net Income 3170 Increase in accounts receivable -800 Increase in office supplies -1270 Increase in accounts payable 370 Cash flow from operating activities 1470 Cash flow from invensting activities: Purchase of Electrical Equipment -6300 Purchase of office equipment -2620 Cash flow from investing activities -8920 Cash flow from financing activities Issue of common stock 65500 Dividends paid -910 Cash flow from financing activities 64590 Net Cash Flow 57140 Ending Cash balance 57140 Beginning cash balance 0 Net increase in cash balance 57140
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