Using the data below, how do I calculate the retained earnings balance as of December 31,2007

Retained earning dec 31 2008 - $245,200
Net decrease in total assets during '08 - $37,400
Net increase in accounts receivable in '08 - $8,600
Dividends declared and paid in '08 - $33,600
Proceeds from issuance of bonds during '08 - $88,400
Net loss for the year ended Dec 31, 2008 - $23,000

Thanks

I am not sure if I am doing this correctly. I think the answer I wrote below couldbe right and I added them altogether as we are trying to find out the balance as of 2007 would be 1 year in the past. Could you check my answer, and if I am wrong, possibly point me in the right direction?

245,200+23,000+33,600 = Retained Earnings as Dec 31 2007
Retained Earnings = 301,800

A loss would be a reduction in retained earnings, not an addition.
Similarly, dividends reduce equity, they do not increase equity

Herman

The answer you have from aahuja1 is correct.

Retained Earnings is affected by the following transactions:

Retained Earnings Beginning of the Period
Less (Plus) previous period accounting errors (Retrospective Approach)
Less (Plus) Changes in accounting principles (retrospective Approach)
Less: Dividends Declared
Plus: Net Income for the period
Less: Loss for the period
Plus: Quasi Reorganizations
retained Earnings at the End of the Period

In this case you have:
begging Balance - ? 301,800 Plug In
Less: Declared Dividends - 33,600
Less: Loss for the period - 23,000
Ending balance - 245,200

Therefore, 245,200 + 33600 + 23000 = 301,800

Plug the number in in the above chart and you will see that you get to the ending balance for 2008.

Hi,

SO, in applying to another "balance sheet"... if I have a retaining at the end of the year as $57,605 with Net Income of $31,386 and a Common Dividends Paid of $12,554. I should do the math reversely to find out the Balance of the Retain Earning at the beginning of the year.

$57,605 - $31,386 + $12,554 = $38,773

Right?
Thanks

Yes, that is correct.

Hope you have it this time