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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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What is the suggested format for the statement of retained earnings? What are the two most common elements in this statement?

To determine

Provide the format of the statement of retained earnings and also state the two common elements in the statement.

Explanation

Retained earnings:

Retained earnings are that portion of profits which are earned by a company but not distributed to stockholders in the form of dividends. These earnings are retained for various purposes like expansion activities, or funding any future plans.

  • The manner by which the  following the  statement of retained earnings is determined sis given below in the following format:
Particulars Amount in $
Beginning  retained earnings, as previously reported 
Add / (Minus): Prior period (and retrospective) adjustments (net income tax effect) 
Adjusted retained earnings  
Add/ (Minus): Net in...

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