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-   -   Financial Statement relationship (https://www.askmehelpdesk.com/showthread.php?t=392801)

  • Sep 2, 2009, 08:28 AM
    bjsharper
    Financial Statement relationship
    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
  • Sep 2, 2009, 09:52 PM
    morgaine300

    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.

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