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Chapter 1 Exercises: 35 points \( \mathbf{i} \)
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Use the following information for the Exercises below. (Static)
[The following Information applies to the questions displayed below.]
On December 1, Jasmin Ernst organized Ernst Consulting. On December 3, the owner contributed \( \$ 84,000 \) in assets in exchange for Its common stock to launch the business. On December 31 , the company's records show the following Items and amounts.
\begin{tabular}{lrlr}
Cash & \( \$ 11,360 \) & Cash dividends & \( \$ 2,000 \) \\
Accounts receivable & 14,000 & Consulting revenue & 14,000 \\
Office supplies & 3,250 & Rent expense & 3,550 \\
Office equipment & 18,000 & Salaries expense & 7,000 \\
Land & 46,000 & Telephone expense & 760 \\
Accounts payable & 8,500 Miscellaneous expenses & 580 \\
Common stock & 84,000 & &
\end{tabular}
Exercise 1-21 (Static) Preparing a statement of cash flows LO P2
Also assume the following:
a. The owner's intial Investment consists of \( \$ 38,000 \) cash and \( \$ 46,000 \) In land in exchange for its common stock.
b. The company's \( \$ 18,000 \) equipment purchase is pald in cash.
c. Cash pald to employees is \( \$ 1,750 \). The accounts payable balance of \( \$ 8,500 \) consists of the \( \$ 3,250 \) office supplies purchase and \( \$ 5,250 \) in employee salarles yet to be pald.
d. The company's rent expense, telephone expense, and miscellaneous expenses are pald in cash.
e. No cash has yet been collected on the \( \$ 14,000 \) consulting revenue earned.
Using the above Information prepare a December statement of cash flows for Ernst Consulting.
Note: Cash outflows should be indicated by a minus sign.
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8,500 Miscellaneous expense
1
Exercise 1-21 (Static) Preparing a statement of cash flows LO P2
Also assume the following:
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