On October 1, Ebony Ernst organized Ernst Consulting: on October 3, the owner contributed $84,580 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 eamings, October 1 as $0. Cash Accounts receivable Office supplies Land Office equipment Accounts payable Common stock $ 9,390 16,020 3,830 45,980 18,550 9,060 84, 580 Cash dividends Consulting revenue Rent expense Salaries expense Telephone expense Miscellaneous expenses $ 2,650 16,020 4,190 7,570 830 650 Exercise 1-16 Preparing a statement of retained earnings LO P2 Using the above information prepare an October statement of retained earnings for Ernst Consulting.
On October 1, Ebony Ernst organized Ernst Consulting: on October 3, the owner contributed $84,580 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 eamings, October 1 as $0. Cash Accounts receivable Office supplies Land Office equipment Accounts payable Common stock $ 9,390 16,020 3,830 45,980 18,550 9,060 84, 580 Cash dividends Consulting revenue Rent expense Salaries expense Telephone expense Miscellaneous expenses $ 2,650 16,020 4,190 7,570 830 650 Exercise 1-16 Preparing a statement of retained earnings LO P2 Using the above information prepare an October statement of retained earnings for Ernst Consulting.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Requlred Informatlon
Use the following information for exercise 15 to 18 LO P2
[The following information applies to the questions displayed below.]
On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $84,580 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 eanings, October 1 as $0.
$ 9,390
16,020
3,830
45,980
18,550
9, 060
84, 580
Cash
Accounts receivable
Office supplies
Cash dividends
Consulting revenue
Rent expense
Salaries expense
Telephone expense
Miscellaneous expenses
$ 2,650
16,020
4,190
7,570
830
Land
office equipment
Accounts payable
Common stock
650
Exercise 1-16 Preparing a statement of retalned earnings LO P2
Using the above information prepare an October statement of retained earnings for Ernst Consulting.
ERNST CONSULTING
Statement of Retained Earnings
For Month Ended October 31
Retained earnings, October 1
Add: Net income
Less: Dividends
Retained earnings. October 31](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F57bab7ca-7707-4175-9d89-135a9fbdb48d%2F2b1b2b8a-fcc4-4520-bacc-5e31a5da2d67%2Fwdf2s1k_processed.jpeg&w=3840&q=75)
Transcribed Image Text:!
Requlred Informatlon
Use the following information for exercise 15 to 18 LO P2
[The following information applies to the questions displayed below.]
On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $84,580 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 eanings, October 1 as $0.
$ 9,390
16,020
3,830
45,980
18,550
9, 060
84, 580
Cash
Accounts receivable
Office supplies
Cash dividends
Consulting revenue
Rent expense
Salaries expense
Telephone expense
Miscellaneous expenses
$ 2,650
16,020
4,190
7,570
830
Land
office equipment
Accounts payable
Common stock
650
Exercise 1-16 Preparing a statement of retalned earnings LO P2
Using the above information prepare an October statement of retained earnings for Ernst Consulting.
ERNST CONSULTING
Statement of Retained Earnings
For Month Ended October 31
Retained earnings, October 1
Add: Net income
Less: Dividends
Retained earnings. October 31
Expert Solution
Step 1
Solution:
Statement of retained earnings represents changes in retained profits during the year. Statement of retained earnings starts with Beginning retained earnings, then changes are reflected in terms of net income and dividend paid and thereafter we will get ending retained earnings to be shown in balance sheet.
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