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Unformatted text preview: This net income is then rolled into the statement of retained earnings. As it is net income the amount gets added to the prior retained earnings balance, which was zero in this example as the company just started in May. Any dividends declared during the period are subtracted from the retained earnings to arrive to the ending retained earnings balance. This amount is shown on the balance sheet as one of the components of the owner’s /stockholder’s equity. In general it would not be possible to complete one without the information from the other....
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This note was uploaded on 12/13/2009 for the course ACCOUNTING ACCTG 50 taught by Professor B during the Fall '09 term at University of Phoenix.
- Fall '09
- Financial Accounting