Question

Use the information in Exercise 1-14 to prepare an October 31 statement of cash flows for Real Answers.
In Exercise 1-14, On October 1, Keisha King organized Real Answers, a new consulting firm; on October 3, the owner contributed $84,000 cash. 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
Accounts receivable . . . . . . . . . . 14,000
Office supplies . . . . . . . . . . . . . . . 3,250
Land . . . . . . . . . . . . . . . . . . . . . . . 46,000
Office equipment . . . . . . . . . . . . 18,000
Accounts payable . . . . . . . . . . . . . 8,500
Owner investments . . . . . . . . . . . . 84,000
Cash withdrawals by owner. . . . . . $ 2,000
Consulting fees earned . . . . . . . . . 14,000
Rent expense . . . . . . . . . . . . . . . . . 3,550
Salaries expense . . . . . . . . . . . . . . 7,000
Telephone expense. . . . . . . . . . . . . 760
Miscellaneous expenses . . . . . . . . 580

Also assume the following:
a. The owner’s initial investment consists of $38,000 cash and $46,000 in land.
b. The company’s $18,000 equipment purchase is paid in cash.
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.
d. The company’s rent, telephone, and miscellaneous expenses are paid in cash.
e. No cash has been collected on the $14,000 consulting feesearned.


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  • CreatedNovember 14, 2013
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