How to Calculate Retained Earnings?
This article will explain How to Calculate Retained Earnings?
What is Retained Earnings?
In Accounting, Retained earnings (RE) is the amount of net income left over for the business after it has paid out dividends to its shareholders.
What is The Formula of Retained Earnings?
The end of period Retained Earnings equlas to:
Start of Period Retained Earnings
+
Net Income During the Period
-
Dividends Paid
How to Retained Earnings?
First Step: Start of Period Retained Earnings
Second Step: Add Net Income During the Period
Third Step: Subsract Dividends paid
Example of Retained Earnings
Given the following Data:
Start of Period Retained Earnings: $ 10,000.00
Net Income During the Period: $ 2,000.00
Dividends paid: $ 1,000.00
The end of period Retained Earnings equlas to: $ 11,000 (10,000 + 2,000 - 1,000)
To find out How to Calculate Retained Earnings you could also use our Retained Earnings calculator