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albertina
May 30, 2008, 07:07 PM
I am reading about cash flow statements. However, I am confused by the examples given. The net income is given to me of $108,00; however, this is not the difference between the retained earnings from the two years given on the comparative balance sheet. Am I supposed to be able to determine the net income from a comparative balance sheet? How do I get the net income from comparative years?

morgaine300
May 31, 2008, 08:30 PM
Retained earnings:
Beginning Balance + Net Income - Dividends Declared = Ending Balance

The dividends declared is accounting for part of the change in retained earnings.