Exercise $1-14$

Preparing an income statement

P$2$

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

Check Net profit, $$2,110$

Exercise $1-15$

Preparing a statement of changes in equity

P$2$

Use the information in Exercise $1-14$ to prepare an October statement of changes in equity for Ernst Consulting.

Exercise $1-16$

Preparing a balance sheet

P$2$

Use the information in Exercise $1-14$ to prepare an October $31$ balance sheet for Ernst Consulting. Hint: The solution to Exercise $1-15$ can help.

Exercise $1-17$

Preparing a statement of cash flows

P$2$

Use the information in Exercise $1-14$ to prepare an October $31$ statement of cash flows for Ernst Consulting. Assume the following additional information.

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 fees earned.