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Retained Earnings represent that Portion of Profits that are retained by the business generated through profitable operations. These are utilized to pay Dividend and for other business purposes like for profitable business operations of the business or paying off debts and especially in case of Crisis or Depression period of Economy. Retained Earnings Equation / Retained Earnings Formula Opening Retained Earnings + Net Income for the year – Dividend = Closing Retained Earnings / Retained Loss Example: For Example, ABC Company has the following for the Accounting Period 2016: Opening Retained Earnings From the previous accounting period = 4200000, Profit for the Current Accounting Period = 1000000, Dividend Declared to Shareholder = 500000, then the Closing Retained Earnings can be calculated by using above Equation or Formula. 4200000 + 1000000 – 500000 = 4700000 Format ABC Statement of Retained Earnings For ...

This is the seventh step of the Steps in the Accounting Cycle . Statement Of Owner's Equity Definition Or Meaning: It is the summary of changes in the Shareholders’ Equity over the period of time. It is wider financial statements than Statement of Retained Earnings . We also called this as "Statement of Owner's Equity" or  "Stateme nt of Moveme nts i n Equity". Components of Statement of Owner's Equity Opening Equity is the Opening Balance from the previous year’s Financial Statements. + Retained Earnings : is the income retained in the company businesses. It is calculated by preparing Statement of Retained Earnings.              To Find Retained Earnings, we use the following Retained Earnings Equation or Formula: Retained Earnings Equation / Components Opening Retained Earnings + Net Income (-Net Loss) for the year - Dividend (It is the profit paid out of the profits of the company business...