{"id":3244,"date":"2023-02-19T16:12:11","date_gmt":"2023-02-19T16:12:11","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/learn-it-16-2-3-financial-statements\/"},"modified":"2023-10-24T18:40:32","modified_gmt":"2023-10-24T18:40:32","slug":"learn-it-16-2-3-financial-statements","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/learn-it-16-2-3-financial-statements\/","title":{"raw":"Learn It 16.2.3: Financial Statements","rendered":"Learn It 16.2.3: Financial Statements"},"content":{"raw":"

Statement of Retained Earnings<\/h2>\r\n

The statement of owner's equity<\/strong> or statement of retained earnings, <\/strong>explains the changes in retained earnings between two balance sheet dates. We start with beginning retained earnings (in our example, the business began in January, so we start with a zero balance) and add any net income (or subtract net loss) from the income statement. Next, we subtract any dividends declared (or any owner withdrawals in a partnership or sole-proprietor) to get the ending balance in retained earnings (or capital for non-corporations)<\/p>\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Metro Courier Inc.<\/strong>\u00a0<\/strong>\u00a0<\/strong><\/td>\r\n<\/tr>\r\n
Statement of Retained Earnings<\/strong>\u00a0<\/strong>\u00a0<\/strong><\/td>\r\n<\/tr>\r\n
Month Ended January 31, 20XX<\/strong>\u00a0<\/strong>\u00a0<\/strong><\/td>\r\n<\/tr>\r\n
Beginning Retained Earnings, Jan 1<\/td>\r\n$\u00a0 \u00a00<\/td>\r\n<\/tr>\r\n
Net income from month (from income statement)<\/td>\r\n\u00a0$ 57,900<\/td>\r\n<\/tr>\r\n
Total increase<\/td>\r\n$ 57,900<\/td>\r\n<\/tr>\r\n
Dividends (or withdrawals for non-corporations)<\/td>\r\n\u00a0\u2013 $0<\/td>\r\n<\/tr>\r\n
Ending Retained Earnings, January 31<\/strong><\/td>\r\n$ 57,900<\/strong><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nThe ending balance we calculated for retained earnings (or capital) is then reported on the balance sheet.\r\n\r\n
[ohm2_question height=\"400\"]8603[\/ohm2_question]<\/section>","rendered":"

Statement of Retained Earnings<\/h2>\n

The statement of owner’s equity<\/strong> or statement of retained earnings, <\/strong>explains the changes in retained earnings between two balance sheet dates. We start with beginning retained earnings (in our example, the business began in January, so we start with a zero balance) and add any net income (or subtract net loss) from the income statement. Next, we subtract any dividends declared (or any owner withdrawals in a partnership or sole-proprietor) to get the ending balance in retained earnings (or capital for non-corporations)<\/p>\n\n\n\n\n\n\n\n\n\n\n
Metro Courier Inc.<\/strong>\u00a0<\/strong>\u00a0<\/strong><\/td>\n<\/tr>\n
Statement of Retained Earnings<\/strong>\u00a0<\/strong>\u00a0<\/strong><\/td>\n<\/tr>\n
Month Ended January 31, 20XX<\/strong>\u00a0<\/strong>\u00a0<\/strong><\/td>\n<\/tr>\n
Beginning Retained Earnings, Jan 1<\/td>\n$\u00a0 \u00a00<\/td>\n<\/tr>\n
Net income from month (from income statement)<\/td>\n\u00a0$ 57,900<\/td>\n<\/tr>\n
Total increase<\/td>\n$ 57,900<\/td>\n<\/tr>\n
Dividends (or withdrawals for non-corporations)<\/td>\n\u00a0\u2013 $0<\/td>\n<\/tr>\n
Ending Retained Earnings, January 31<\/strong><\/td>\n$ 57,900<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The ending balance we calculated for retained earnings (or capital) is then reported on the balance sheet.<\/p>\n