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On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $84,200 in assets in exchange for its common stock to launch the business. On October 31, the company’s records show the following items and amounts.
Cash $ 10,710 Cash dividends $ 2,180
Accounts receivable 14,800 Consulting revenue 14,800
Office supplies 3,450 Rent expense 3,750
Land 46,030 Salaries expense 7,160
Office equipment 18,170 Telephone expense 780
Accounts payable 8,630 Miscellaneous expenses 600
Common Stock 84,200 Also assume the following:
1. The owner’s initial investment consists of $38,170 cash and $46,030 in land in exchange for its common stock..
2. The company’s $18,170 equipment purchase is paid in cash.
3. The accounts payable balance of $8,630 consists of the $3,450 office supplies purchase and $5,180 in employee salaries yet to be paid.
4. The company’s rent, telephone, and miscellaneous expenses are paid in cash.
5. No cash has been collected on the $14,800 consulting fees earned.
Using the above information prepare an October 31 statement of cash flows for Ernst Consulting. (Cash outflows should be indicated by a minus sign.)