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View Full Version : Calculating Retained Earnings


caj1751
Sep 3, 2009, 06:55 AM
Would like to know how retained earnings is calculated

morgaine300
Sep 4, 2009, 12:03 AM
Revenues, expenses and dividends are the only things that affect retained earnings.

In real life, the revenues and expenses would already have been summarized on the income statement as net income. So in real life the beginning balance plus the net income from that statement, less any dividends declared, gives the new balance in retained earnings.

However, for the sake of homework, the problem could be giving you any different sorts of information to figure it out and we could not know what that is without seeing it.