! Required information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] On December 1, Jasmin Ernst organized Ernst Consulting. On December 3, the owner contributed $85,460 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 Accounts receivable Office supplies Office equipment Land Accounts payable Common stock Exercise 1-19 (Algo) Preparing a statement of retained earnings LO P2 Using the above information prepare a December statement of retained earnings for Ernst Consulting. Hint: Retained Earnings on December 1 was $0. ERNST CONSULTING Statement of Retained Earning Retained earnings, December 1 Add: Net income $6,650 Cash dividends 18,650 Consulting revenue 4,640 Rent expense 19,560 Salaries expense 46,000 Telephone expense 9,890 Miscellaneous expenses 85,460 Less: Dividends Retained earnings, December 31 $ $ 0 $ 3,490 18,650 4,920 8,500 890 700 3,640 3,640 3.490 150

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business…