I'm taking Accounting 102 and somehow I'm supposed to calculate the retained earnings off of the balance sheet accounts for a publicly held corporation. I came up with the figure by actually preparing the balance sheet, but somewhere along the way I'm certain I should have journal entries or math to prove the number. Any ideas?
2007-03-25 20:03:39 · 0 answers · asked by Erica B 3 in Business & Finance ➔ Corporations
I have no previous year info, just a complete list of balance sheet accounts
2007-03-25 20:19:33 · update #1
Retained earnings is basically the carried forward profit held in the company. ie. year 1 company make a profit of $50,000 and pays $20,000 dividend, retained earnings is $30,000. In year 2 company makes a profit of $100k and pays dividends of $50,000, retained earnings at the end ofg year 2 is $80,000.
If a company makes a profit, it can be dealt with in 2 ways - kept in the company (retained earnings) or paid out as a dividend to shareholders.
Hope this helps.
2007-03-25 20:11:01 · answer #1 · answered by shano 2006 1 · 11⤊ 0⤋
How To Calculate Retained Earnings
2016-10-02 23:31:19 · answer #2 · answered by mauzon 4 · 0⤊ 0⤋
Retained Earnings Formula
2016-12-08 23:07:22 · answer #3 · answered by ? 4 · 0⤊ 0⤋
RE:
How do I calculate retained earnings?
I'm taking Accounting 102 and somehow I'm supposed to calculate the retained earnings off of the balance sheet accounts for a publicly held corporation. I came up with the figure by actually preparing the balance sheet, but somewhere along the way I'm certain I should have journal...
2015-08-02 00:37:49 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Retained earnings refers to money a company has earned and not used for paying expenses or dividends. When finalizing your balance sheet, you need to know how to calculate the company's new retained earnings. Before you do so, you need to know the retained earnings from the previous year, the company's net income and the amount of money the company paid in dividends. The retained earnings plus the common stock value equal the shareholders' equity in the company. Companies are required to officially document their financial history. If you can manage, it's usually easiest to calculate current retained earnings by using these official values for a company's retained earnings to date, net income, and dividends paid out, rather than calculating these by hand. A company's retained earnings up to the most recent recording period and its ownership equity should appear on the current balance sheet, while its net income should appear on a current income statement.
2014-10-09 14:34:37 · answer #5 · answered by ? 2 · 13⤊ 0⤋
Sorry, I was trying to get a formula to calculate how to get the formula for retained earnings!
2014-03-10 05:00:07 · answer #6 · answered by Susi 1 · 0⤊ 0⤋