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General Accounting Discussions: Retained Earning

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    • CommentAuthorDilawar
    • CommentTimeMay 27th 2007
     
    what is retained earning?
    How to find out retained earning? is there any specific formula for it?
    • CommentAuthorabril
    • CommentTimeJun 1st 2007
     
    retained earning is where you put your income and loss.. its more like the accumulation of your income and loss from the previous years of operation.

    retained earnings is part of the stockholder's equity.

    well, actually there is a formula for calculating the retained earnings but it's only use for problem solving purposes and its not specific. like for example, when you are asked to compute for the missing item such as dividends declared, net loss for the year or any items that are directly related to retained earnings, you need not to use a formula for that.. t-account will be the BEST WAY to use in getting the answer.
    • CommentAuthoradaclarke
    • CommentTimeJun 12th 2007
     
    You can also use "BASE" calculation

    Beginning = R/E at 12/2006
    Additions = Net Income (earned during 2007)
    Subtraction = Less dividends paid (during 2007)
    Ending = R/E at 12/2007

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