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    2boys4me2love's Avatar
    2boys4me2love Posts: 2, Reputation: 1
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    #1

    Apr 13, 2007, 12:39 PM
    Calculating retained earnings
    I'm stuck on a problem, and I hope someone here will be able to help.

    The goal is to find the retained earnings for this year, but the only information given is the assets, liabilities, and capital stock. I'm unsure how to figure out the retained earnings from this information since the textbook only gives this formula: retained earnings = beginning retained earnings + net income - dividends

    2xxx
    Assets = 350,000
    Liabilities = 80,000
    Capital stock = 210,000

    I'm grasping at straws here, but this is what I've figured out. I'm sure it's wrong! Lol

    Assets = Liabilites + Owners' Equity
    350,000 = 80,000 + (210,000 - x) (it's not a balanced equation with just the 80k and 210k)
    x = 60000

    My guess is the 60,000 is the retained earnings, but I'm not sure?

    Thanks in advance for any help that anyone can offer.
    pieeye12's Avatar
    pieeye12 Posts: 2, Reputation: 1
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    #2

    Apr 13, 2007, 02:40 PM
    Yes,
    Your answer is correct although your equation is incorrect. Owners' equity=capital
    stock + retained earnings(x).
    Therefore x=Assets-Liabilities-capital stock.
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #3

    Apr 13, 2007, 10:06 PM
    $60,000 is correct.

    In your equation, you wrote 210,000 - x, it should have been +x
    2boys4me2love's Avatar
    2boys4me2love Posts: 2, Reputation: 1
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    #4

    Apr 15, 2007, 06:37 PM
    Thank you both for the help!
    mariacajuste's Avatar
    mariacajuste Posts: 2, Reputation: 1
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    #5

    Jul 1, 2012, 07:26 AM
    Beginning retained earningss is 89,089 net income is a loss 0 for dividends and ending retained rearnings is 69674 how do I get the net income
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #6

    Jul 1, 2012, 02:41 PM
    Quote Originally Posted by 2boys4me2love View Post
    I'm stuck on a problem, and I hope someone here will be able to help.

    The goal is to find the retained earnings for this year, but the only information given is the assets, liabilities, and capital stock. I'm unsure how to figure out the retained earnings from this information since the textbook only gives this formula: retained earnings = beginning retained earnings + net income - dividends

    2xxx
    Assets = 350,000
    Liabilities = 80,000
    Capital stock = 210,000

    I'm grasping at straws here, but this is what I've figured out. I'm sure it's wrong! Lol

    Assets = Liabilites + Owners' Equity
    350,000 = 80,000 + (210,000 - x) (it's not a balanced equation with just the 80k and 210k)
    X = 60000

    My guess is the 60,000 is the retained earnings, but I'm not sure?

    Thanks in advance for any help that anyone can offer.
    This has been answered in previous questions
    IMBeliever's Avatar
    IMBeliever Posts: 1, Reputation: 1
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    #7

    Jul 19, 2012, 12:59 PM
    For the beginner accounting 1 students when looking at the trial balance sheet. To get the retained Earnings it is

    TOTAL DEBIT - TOTAL CREDITS = RE
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #8

    Jul 19, 2012, 02:58 PM
    Quote Originally Posted by IMBeliever View Post
    For the beginner accounting 1 students when looking at the trial balance sheet. To get the retained Earnings it is

    TOTAL DEBIT - TOTAL CREDITS = RE
    This is misleading and incorrect

    assets(debits) - liabilities(credits) = Equity
    Equity = issued capital + retained earnings

    Both issued capital and retained earnings are also credits
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