Question

during the year, total assets increased by $100,000 and total liabilities increased by $40,000. the company also paid $30,000 in dividends. no other transactions occurred except revenues and expenses. how much is net income for the year?

Answer 1

Retained earnings are calculated by subtracting the line item for common stock from the total quantity of common stock on your balance sheet.

How are retained earnings defined?

After paying all of a company's direct and indirect expenses, income taxes, and dividends to shareholders, the remaining profit is known as retained earnings. This is the equity stake in the company that can be used to finance purchases of new machinery, R&D, and marketing initiatives, among other things.

Retained earnings versus equity: what are they?

Owner's equity, which includes stockholders, partners, and founders, is the total amount of the company that is held in their possession. The net gain or loss of the corporation over the course of the business is referred to as retained earnings (subtracting any dividends paid to investors).

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