The Total equity and the liabilities are $ 13,780 and $ 13,780 of the December 31 balance sheet.
In order to prepare a balance sheet, one needs to summarize the company's assets, liabilities, and equity. In the case of Ernst Consulting, the assets are as follows:
Cash: $0
Accounts receivable: $0
Supplies: $0
Prepaid rent: $0
Furniture: $14,020
Accumulated depreciation: -$240
Total assets: $13,780
The liabilities are as follows:
Accounts payable: $0Salaries payable: $0
Interest payable: $0
Total liabilities: $0
The equity is as follows:
Common stock: $83,540
Retained earnings: -$69,760
Total equity: $13,780
The balance sheet for Ernst Consulting as of December 31 is as follows:
Ernst Consulting Balance Sheet December 31, 20XX Assets Cash $0
Accounts receivable $ 0
Supplies$0
Prepaid rent $ 0
Furniture $ 14,020
Less: Accumulated depreciation ($240)
Total assets $ 13,780
Account payable$0
Salaries payable $ 0
Interest payable$0
Total liabilities$0
Equity Common stock $ 83,540
Retained earnings($69,760)
Total equity $ 13,780
Total liabilities and equity $ 13,780
Thus, the December 31 balance sheet for Ernst Consulting is as above.