Question

On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $83,660 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. Retained earnings, October 1 as $0.

Cash	$	12,040		Cash dividends	$	1,760
Accounts receivable		13,720		Consulting revenue		13,720
Office supplies		2,990		Rent expense		3,210
Land		45,940		Salaries expense		6,690
Office equipment		17,710		Telephone expense		870
Accounts payable		8,230		Miscellaneous expenses		680
Common stock		83,660

Exercise 1-17 Preparing a balance sheet LO P2

Using the above information prepare an October 31 balance sheet for Ernst Consulting.

Answer 1