On October 1, Ebony Ernst organized Ernst Consulting; on October3, the owner contributed $85,050 in assets in exchange for itscommon stock to launch the business. On October 31, the company’srecords show the following items and amounts.
|
| Cash | $ | 7,950 | | Cash dividends | $ | 3,070 |
| Accounts receivable | | 17,500 | | Consulting revenue | | 17,500 |
| Office supplies | | 4,200 | | Rent expense | | 4,530 |
| Land | | 46,010 | | Salaries expense | | 8,090 |
| Office equipment | | 19,060 | | Telephone expense | | 880 |
| Accounts payable | | 9,430 | | Miscellaneous expenses | | 690 |
| Common Stock | | 85,050 | | | | |
|
Also assume the following:
- The owner’s initial investment consists of $39,040 cash and$46,010 in land in exchange for its common stock..
- The company’s $19,060 equipment purchase is paid in cash.
- The accounts payable balance of $9,430 consists of the $4,200office supplies purchase and $5,230 in employee salaries yet to bepaid.
- The company’s rent, telephone, and miscellaneous expenses arepaid in cash.
- No cash has been collected on the $17,500 consulting feesearned.
Using the above information prepare an October 31 statement of cashflows for Ernst Consulting. (Cash outflows should beindicated by a minus sign.)
