**Required Information***[The following information applies to the questions displayed below]*On December 1, Jasmin Ernst organized Ernst Consulting. On December 3, the owner contributed $84,580 in assets in exchange for its common stock to launch the business. On December 31, the company's records show the following items and amounts:| Item | Amount ($) ||----------------------------|------------|| Cash | 9,390 || Accounts receivable | 16,020 || Office supplies | 3,830 || Office equipment | 18,550 || Land | 45,980 || Accounts payable | 9,060 || Common stock | 84,580 || Cash dividends | 2,650 || Consulting revenue | 16,020 || Rent expense | 4,190 || Salaries expense | 7,570 || Telephone expense | 830 || Miscellaneous expenses | 650 |*Explanation*: This table lists the financial items and corresponding amounts recorded by Ernst Consulting company as of December 31, after its establishment and owner contribution in early December. It includes assets such as cash, accounts receivable, office supplies, office equipment, and land. It also details liabilities like accounts payable, and equity items like common stock and cash dividends. Revenue and expenses such as consulting revenue, rent expense, salaries expense, telephone expense, and miscellaneous expenses are also documented. These records represent the company's financial status at the end of the month. ### Ernst Consulting: December Statement of Retained EarningsTo understand how retained earnings for Ernst Consulting have changed over the month of December, the following statement of retained earnings has been prepared. This follows the initial note that retained earnings on December 1st were $0.**Ernst Consulting** **Statement of Retained Earning** | Description | $ ||----------------------------------|-----------|| **Retained earnings, December 1**| 0 || Add: Net income | 2,780 || | **2,780** || Less: Dividends | 2,650 || **Retained earnings, December 31**| **130** |### Explanation of the Statement Components:1. **Retained earnings, December 1:** It starts with $0 as there were no retained earnings at the beginning of the month.2. **Add: Net income:** The company earned a net income of $2,780 over the month.3. **Total before dividends:** Summing the initial retained earnings and the net income gives a total of $2,780.4. **Less: Dividends:** The company distributed $2,650 in dividends to the shareholders during the month.5. **Retained earnings, December 31:** After paying out the dividends, the remaining retained earnings amount to $130.This statement provides a clear view of how the retained earnings for the company are calculated and adjusted by accounting for the net income earned and the dividends paid out during the month.

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Description: **Required Information***[The following information applies to the questions displayed below]*On December 1, Jasmin Ernst organized Ernst Consulting. On December 3, the owner contributed $84,580 in assets in exchange for its common stock to launch t

Net Income = Revenue - Expenses Retained earnings is profits earned by organization over a period…

Business

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Required information [The following information applies to the questions displayed below.] On December 1, Jasmin Ernst organized Ernst Consulting. On December 3, the owner contributed $84,580 in assets in exchange for its common stock to launch the business. On December 31, the company's records show the following items and amounts. Cash Accounts receivable Office supplies Office equipment Land Accounts payable Common stock $ 9,390 Cash dividends Consulting revenue Rent expense 16,020 3,830 18,550 Salaries expense 45,980 Telephone expense 9,060 Miscellaneous expenses 84,580 $ 2,650 16,020 4,190 7,570 830 650

Required information [The following information applies to the questions displayed below.] On December 1, Jasmin Ernst organized Ernst Consulting. On December 3, the owner contributed $84,580 in assets in exchange for its common stock to launch the business. On December 31, the company's records show the following items and amounts. Cash Accounts receivable Office supplies Office equipment Land Accounts payable Common stock $ 9,390 Cash dividends Consulting revenue Rent expense 16,020 3,830 18,550 Salaries expense 45,980 Telephone expense 9,060 Miscellaneous expenses 84,580 $ 2,650 16,020 4,190 7,570 830 650

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Required information [The following information applies to the questions displayed below.] On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $83,540 in assets to launch the business. On October 31, the company's records show the following items and amounts. Cash $12,650 Cash withdrawals by owner $ 1,570 13,520 13,520 Accounts receivable Office supplies Land Consulting revenue Rent expense 2,850 3,110 45,940 Salaries expense 17,530 Telephone expense Office equipment Accounts payable 6,490 850 660 8,110 Miscellaneous expenses Owner investments 83,540 Using the above information prepare an October statement of owner's equity for Ernst Consulting. ERNST CONSULTING Statement of Owner's Equity 0
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Required information [The following information applies to the questions displayed below.] On December 1, Jasmin Ernst organized Ernst Consulting. On December 3, the owner contributed $85,360 in assets in exchange for its common stock to launch the business. On December 31, the company's records show the following items and amounts. Cash $ 7,010 Accounts receivable Office supplies 18,350 4,480 Office equipment 19,360 Land 46,040 Accounts payable 9,740 Common stock 85,360 Cash dividends Consulting revenue Rent expense Salaries expense Telephone expense Miscellaneous expenses $ 3,390 18,350 4,820 8,370 910 720 Also assume the following: a. The owner's initial investment consists of $39,320 cash and $46,040 in land in exchange for its common stock. b. The company's $19,360 equipment purchase is paid in cash. c. Cash paid to employees is $3,110. The accounts payable balance of $9,740 consists of the $4,480 office supplies purchase and $5,260 in employee salaries yet to be paid. d. The…
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