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View Full Version : Financial Statement relationship


bjsharper
Sep 2, 2009, 08:28 AM
Assets $
Liabilities $160,000
Paid-in-capital $110,000
Retained earnings $
Net Income $136,000
Dividends declared & paid 24,000
Retained earnings 100,000

Calculate the missing amount

morgaine300
Sep 2, 2009, 09:52 PM
You've left some information out. So I'm going to have to assume the asset, liability and paid-in capital numbers, along with the missing retained earnings, are beginning balances. It's the only thing I can think of that would make this make sense.

Retained earnings does this:
Beginning Balance
+ Net Income
- Dividends
= Ending Balance

Plug in what you have and work towards what you don't have by working backwards.

The rest you can get from using your accounting equation. If you don't know it, it's in your book and you should get it memorized ASAP as it's the backbone of much of what you'll learn.