Chapter 1, Problem 18E

Preparing a statement of cash flows

Use the information hi Exercise 1-15 to prepare an October 31 statement of cash flows for Ernst Consulting. Assume the following additional information.

1. a. The owner’s initial investment consists of $38,000 cash and $46,000 in land in exchange for its common stock.
2. b. The company’s $18,000 equipment purchase is paid in cash.
3. c. 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. d. The company's rent, telephone, and miscellaneous expenses are paid in cash.
5. e. No cash has been collected on the $14,000 consulting fees earned.

Check Net increase in cash, $11,360