Chapter 1, Problem 15E

Preparing an income statement

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. Use this information to prepare an October income statement for the business.

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

Check Net income $2,110