Question

On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $82,890 in assets to launch the business. On October 31, the company’s records show the following items and amounts.

Cash	$	15,140		Cash withdrawals by owner	$	830
Accounts receivable		12,720		Consulting revenue		12,720
Office supplies		2,110		Rent expense		2,380
Land		46,010		Salaries expense		5,620
Office equipment		16,780		Telephone expense		780
Accounts payable		7,360		Miscellaneous expenses		600
Owner investments		82,890

Using the above information prepare an October statement of owner's equity for Ernst Consulting.

Answer 1

Income Statement
For the Year ended October 31
Consulting revenue		$         12,720
Expenses:
Rent expenses	$               2,380
Salaries expenses	$               5,620
Miscllaneous expenses	$                  780
Miscllaneous expenses	$                  600
Total Expenses		$           9,380
Net Income		$           3,340
Ernst Consulting
Statement of Owner's Equity
As at Year ended October 31
Owner's Investment as on October 1		$         82,890
Add:Net Income for October		$           3,340
		$         86,230
Less:Withdrawls during October		$              830
Omar Farah, capital, October 31		$         85,400