Reference no: EM132623946

Question - On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $84,000 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 $11,360

Cash dividends $2,000

Accounts receivable 14,000

Consulting revenue 14,000

Office supplies 3,250

Rent expense 3,550

Land 46,000

Salaries expense 7,000

Office equipment 18,000

Telephone expense 760

Accounts payable 8,500

Miscellaneous expenses 580

Common stock 84,000

Also assume the following:

1. The owner's initial investment consists of $38,000 cash and $46,000 in land in exchange for its common stock.

2. The company's $18,000 equipment purchase is paid in cash.

3. The accounts payable balance of $8,500 consists of the $3,250 office supplies purchase and $5,250 in employee salaries yet to be paid.

4. The company's rent, telephone, and miscellaneous expenses are paid in cash.

5. No cash has been collected on the $14,000 consulting fees earned.

Required - Using the above information make an October 31 statement of cash flows for Ernst Consulting.