Retained earnings

Aug 26th, 2016
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The items contained in the Retained Earnings section of a balance sheet are often complex and confusing. Suggest an improvement for the reporting on this information that will help the users of the statement to have a better understanding of the activity. Provide support for your suggestion. Evaluate what a cumulative loss in the retained earnings section of a company’s balance sheet might indicate about the financial performance in the future, indicating how this may influence decisions made about the company. Provide support for your answer.

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The items contained in the Retained Earnings section of a balance sheet are often complex andconfusing. Suggest an improvement for the reporting on this information that will help the users of thestatement to have a better understanding of the activity. Provide support for your suggestion.Ans:Three basic components of retained earnings areCorporation keeps the 1 years prior old retained earnings which is entirely based upon the totalearning of the corporation since its birthNet income which is based on the current years income calculate after taxesDividend that is paid

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