Final answer:
When a company earns net income, it increases its Retained Earnings by the same amount, assuming no dividends are given out. Therefore, Osborn Enterprises' Retained Earnings will increase by $1,700 due to its earned net income.
Step-by-step explanation:
The impact of Osborn Enterprises earning a net income of $1,700 during its first month of operation on its Retained Earnings is that Retained Earnings will increase by $1,700. Net income is the amount of earnings that remain after all expenses have been deducted from a company's total revenue. Since Retained Earnings reflect the cumulative amount of net income that a company retains rather than distributes to its shareholders as dividends, when a company earns net income, it increases Retained Earnings.
Assuming that there are no dividends or other deductions from Retained Earnings during that period, the correct answer is option b): Retained Earnings increase by $1,700. This is because the net income of $1,700 is a positive addition to the company's equity, specifically in the Retained Earnings account.