Acquisition costs of trucks: Cost of trucks include purchase price (not list price) and any other costs on making the truck fit for use. This includes any one time costs incurred prior to the usage of the truck, e.g., accessories used. Sometimes trucks are not obtained by payment of cash but in exchange of shares or any other asset. In such cases the market value of the shares exchanged or the fair value of the asset is considered in the calculation of cost. When trucks are obtained in exchange of notes payable, the present value of the notes is used in cost calculations. To prepare: To prepare the appropriate journal entries for purchase of trucks.

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ht = ences X On December 1, Jasmin Ernst organized Ernst Consulting. On December 3, the owner contributed $84,920 in assets to launch the business. On December 31, the company's records show the following items and amounts. Cash withdrawals by owner Consulting revenue Salaries expense Cash $ 8,450 Accounts receivable 16,950 Office supplies 4,080 Rent expense Land 46,020 Office equipment 18,860 Telephone expense Accounts payable 9,280 Owner investments 84,920 Miscellaneous expenses $ 2,930 16,950 4,420 7,900 860 680 Exercise 1-18 (Algo) Preparing an income statement LO P2 Using the above information prepare a December income statement for the business. ERNST CONSULTING Income Statement Revenues Rent expense Salaries expense Telephone expense Total revenues $ 4,420 7,900 860 $ SA Assets Cash 8,450 Accounts receivable 16,950 Office supplies 4,080 Land 46,020 Office equipment 18,860 navable 9,280 13,180 5 11 of 14 Next >

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Chapter 10, Problem 3E

To determine

Acquisition costs of trucks: Cost of trucks include purchase price (not list price) and any other costs on making the truck fit for use. This includes any one time costs incurred prior to the usage of the truck, e.g., accessories used. Sometimes trucks are not obtained by payment of cash but in exchange of shares or any other asset. In such cases the market value of the shares exchanged or the fair value of the asset is considered in the calculation of cost. When trucks are obtained in exchange of notes payable, the present value of the notes is used in cost calculations.

To prepare: To prepare the appropriate journal entries for purchase of trucks.

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ht = ences X On December 1, Jasmin Ernst organized Ernst Consulting. On December 3, the owner contributed $84,920 in assets to launch the business. On December 31, the company's records show the following items and amounts. Cash withdrawals by owner Consulting revenue Salaries expense Cash $ 8,450 Accounts receivable 16,950 Office supplies 4,080 Rent expense Land 46,020 Office equipment 18,860 Telephone expense Accounts payable 9,280 Owner investments 84,920 Miscellaneous expenses $ 2,930 16,950 4,420 7,900 860 680 Exercise 1-18 (Algo) Preparing an income statement LO P2 Using the above information prepare a December income statement for the business. ERNST CONSULTING Income Statement Revenues Rent expense Salaries expense Telephone expense Total revenues $ 4,420 7,900 860 $ SA Assets Cash 8,450 Accounts receivable 16,950 Office supplies 4,080 Land 46,020 Office equipment 18,860 navable 9,280 13,180 5 11 of 14 Next >

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