Question

On December 1, Jasmin Ernst organized Ernst Consulting. On December 3, the owner contributed $85,360 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 $ 7,010 Cash dividends $ 3,390 Accounts receivable 18,350 Consulting revenue 18,350 Office supplies 4,480 Rent expense 4,820 Office equipment 19,360 Salaries expense 8,370 Land 46,040 Telephone expense 910 Accounts payable 9,740 Miscellaneous expenses 720 Common stock 85,360

Answer 1

The income statement illustrates that the net income will be $3530.

How to calculate the income statement?

The income statement will be:

Revenue

Consulting revenue 18350

Expenses

Miscellaneous expenses 720

Rent expense 4820

Salaries expense 8370

Telephone expenses 910

Total expenses 14820

Net income = 18350 - 14820 = 3530

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