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    Geek101's Avatar
    Geek101 Posts: 1, Reputation: 1
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    #1

    Sep 4, 2011, 05:17 AM
    How do you calculate retained earnings?
    A company started June 1 with an investment of $26,804 cash as of June 30th Cash=$5,204,Accounts Receivable=$4,284,Revenue=$7,594,Supplies=$2,371,A dvertising expense $400,Equipment=$29,594,Notes Payable=$13,198,Accounts Payable=$784,Supplies Expense=$1,039,Gas & oil Expense=$638,Utilities Expense=$262,Wage Expense=$1,994. In June the company issued no additional common stock, but paid dividends of $2,594.
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    Sep 4, 2011, 08:12 AM
    First you need to figure out your beginning Owners Equity. Hint: Initial investment

    Next you need to figure out your balances for Assets and Liabilities.

    Then subtract your liabilities from your Assets, which will be your ending Owners Equity.

    To check this figure subtract your expenses and dividends from your revenues, then add this amount to your beginning Owners Equity to get your Ending Owners Equity.

    Your two ending Owners Equity amounts should be the same.
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