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cettin
Dec 2, 2007, 04:24 PM
I need to calculate the retrained earnings for 06 and 05
For 06 I only have the revenue and expenses figures
For 05 I have the assets, liabilities, capital stock and dividends

How do I calculate the retained earnings for the 2 years

Thanks :)

CaptainForest
Dec 4, 2007, 02:30 PM
I assume you mean ending RE?

Ending RE for 2005:
Assets = Liabilities + Capital Stock – Dividends – Retained Earnings

Therefore,
Ending RE 2005 = Liabilities + Capital Stock – Dividends – Assets


As for 2006:
Opening RE (which is the ending 2005 RE which you just calculated above)
Plus Revenue
Less Expenses
Equals Closing RE 2006