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On October 1, Ebony Ernst organized Ernst Consulting, on October 3, the owner contributed $84,580 in assets in exchange for its common stock to launch the business. On October 31, the companys records show the following items and amounts. $2,65 Cash Accounts receivable office supplies Land Office equipment Accounts payable Common Stock 9,390 Cash dividends 16,ee0 Consulting revenue 3,830 Rent expense 45,988Salaries expense 18,550 Telephone expense 9,e60 Miscellaneous expenses 84,588 16,880 4,190 7,570 830 650 Using the above information prepare an October statement of retained earmings for Ernst Consulting ERNST CONSULTING Statement of Retained Earnings For Month Ended October 31 Retained earnings, Oct. 1
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Answer #1

Calculate Net Income

Consulting Revenue = 16000

Less Expenses (4190+7570+830+650) 13,240

Retained Earnings oct 1 = $0

Add: Net Income = 2760

Less Dividends = 2650

Retained Earnings Oct 31 = $110

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