Required information [The following information applies to the questions displayed below.] On December 1, Jasmin Ernst organized Ernst Consulting. On December 3, the owner contributed $83,220 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. Cash $ 13,840 Accounts receivable 13,140 Office supplies 2,530 Rent expense Office equipment 17,200 Land 45,840 Telephone expense Accounts payable 7,810 Cash dividends Consulting revenue Salaries expense Miscellaneous expenses Common stock 83,220 $ 1,280 13,140 2,770 6,120 820 630 Using the above information prepare a December statement of retained earnings for Ernst Consulting. Hint: Retained Earnings on December 1 was $0. Answer is not complete. ERNST CONSULTING Statement of Retained Earning Retained earnings, December 1 $ 0 Add: Net income 2,800 2,800 Less: Dividends (1,280) Retained earnings, December 31 $ 1,520 Using the above information prepare a December income statement for the business. Answer is not complete. ERNST CONSULTING Income Statement Revenues Consulting revenue $ 13,140 Total revenues Expenses Salaries expense 6,120 Rent expense 2,770 Telephone expense 820 Miscellaneous expenses 630 Total expenses Net income $ 13,140 10,340 $ 2,800 Use the above information to prepare a December 31 balance sheet for Ernst Consulting. Cash Accounts receivable Office supplies Office equipment Land Answer is not complete. ERNST CONSULTING Balance Sheet Assets Liabilities $ 13,840 Accounts payable $ 7,810 13,140 2,530 7,810 17,200 Equity 17,200 Common stock 83,220 Retained earnings 1,520 Total equity 84,740 Total assets $ 63,910 Total liabilities and equity $ 92,550 Also assume the following: a. The owner's initial investment consists of $37,380 cash and $45,840 in land in exchange for its common stock. b. The company's $17,200 equipment purchase is paid in cash. c. Cash paid to employees is $840. The accounts payable balance of $7,810 consists of the $2,530 office supplies purchase and $5,280 in employee salaries yet to be paid. d. The company's rent expense, telephone expense, and miscellaneous expenses are paid in cash. e. No cash has yet been collected on the $13,140 consulting revenue earned. Using the above information prepare a December statement of cash flows for Ernst Consulting. (Cash outflows should be indicated by a minus sign.) Answer is not complete. ERNST CONSULTING Statement of Cash Flows For Month Ended December 31 Cash flows from operating activities Cash received from customers Cash paid to employees Cash paid for rent Cash paid for telephone expenses Cash paid for miscellaneous expenses Net cash used by operating activities Cash flows from investing activities Cash flows from financing activities Cash investments from shareholders Cash dividends to shareholders Net increase in cash Cash balance, December 1 Cash balance, December 31 $ 0 (840) (2,770) (820) (630) (17,200) $ (5,060) (17,200) 37,380 (1,280) 36,100 36,100 13,840 $ 49,940