16.
The following table shows the effects of five transactions (a through e) on the assets, liabilities, and
equity of Mulan's Boutique. Match the given transaction with its probable description.
Assets
Accounts Office
Cash + Receivable + Supplies + L
$ 21,000 + $ 0 + $ 3,000 +
a. – 4,000 +
b. + 1,000
c. + 1,900
d. – 1,000
e. + 1,900 – 1,900
$ 17,900 + $ 0 + $ 4,000 +
Transaction Description
a. Purchased land for cash
b. Purchased office supplies on credit
c. Billed a client for services provided
d. Paid the account payable created in transaction b
e. Collected cash for the billing in transaction c
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Questions 17-19
[The following information applies to the questions displayed below.]
On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $84,000 in
assets to launch the business. On October 31, the company’s records show the following items and
amounts.
Cash $ 11,360 Cash dividends $ 2,000
Accounts receivable 14,000 Consulting fees earned 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
17.
Using the above information prepare an October income statement for the business.
, ERNST CONSULTING
Income Statement
For Month Ended October 31
Revenues
Consulting fees earned $14,000
Total revenues $14,000
Expenses
Salaries expense 7,000
Rent expense 3,550
Telephone expense 760
Miscellaneous expenses 580
Total expenses 11,890
Net income $2,110
18.
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, Oct. 1 $0
Add: Net income 2,110
2,110
Less: Dividends 2,000
Retained earnings, Oct. 31 $110
19.
Using the above information prepare an October 31 balance sheet for Ernst Consulting.
ERNST CONSULTING
Balance Sheet
As of October 31
The following table shows the effects of five transactions (a through e) on the assets, liabilities, and
equity of Mulan's Boutique. Match the given transaction with its probable description.
Assets
Accounts Office
Cash + Receivable + Supplies + L
$ 21,000 + $ 0 + $ 3,000 +
a. – 4,000 +
b. + 1,000
c. + 1,900
d. – 1,000
e. + 1,900 – 1,900
$ 17,900 + $ 0 + $ 4,000 +
Transaction Description
a. Purchased land for cash
b. Purchased office supplies on credit
c. Billed a client for services provided
d. Paid the account payable created in transaction b
e. Collected cash for the billing in transaction c
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Questions 17-19
[The following information applies to the questions displayed below.]
On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $84,000 in
assets to launch the business. On October 31, the company’s records show the following items and
amounts.
Cash $ 11,360 Cash dividends $ 2,000
Accounts receivable 14,000 Consulting fees earned 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
17.
Using the above information prepare an October income statement for the business.
, ERNST CONSULTING
Income Statement
For Month Ended October 31
Revenues
Consulting fees earned $14,000
Total revenues $14,000
Expenses
Salaries expense 7,000
Rent expense 3,550
Telephone expense 760
Miscellaneous expenses 580
Total expenses 11,890
Net income $2,110
18.
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, Oct. 1 $0
Add: Net income 2,110
2,110
Less: Dividends 2,000
Retained earnings, Oct. 31 $110
19.
Using the above information prepare an October 31 balance sheet for Ernst Consulting.
ERNST CONSULTING
Balance Sheet
As of October 31
