The correct formula to calculate retained earnings is:

b. Beginning retained earnings + net income - dividends

Here's the step-by-step process:

1. Start with the beginning retained earnings: This is the accumulated portion of net income that is not distributed to shareholders as dividends. You can find this number from the previous year's balance sheet.

2. Add the net income: This is the company's total earnings, also known as the bottom line. It's calculated as revenues minus expenses, taxes, and costs of goods sold. You can find this number on the income statement.

3. Subtract dividends: If a company pays dividends to its shareholders, this amount is subtracted from the retained earnings. Dividends are a portion of a company's earnings that are distributed to shareholders.

The result is the retained earnings for the current period.

Question

The correct formula to calculate retained earnings is:

b. Beginning retained earnings + net income - dividends

Here's the step-by-step process:

1. Start with the beginning retained earnings: This is the accumulated portion of net income that is not distributed to shareholders as dividends. You can find this number from the previous year's balance sheet.

2. Add the net income: This is the company's total earnings, also known as the bottom line. It's calculated as revenues minus expenses, taxes, and costs of goods sold. You can find this number on the income statement.

3. Subtract dividends: If a company pays dividends to its shareholders, this amount is subtracted from the retained earnings. Dividends are a portion of a company's earnings that are distributed to shareholders.

The result is the retained earnings for the current period.

Knowee AI · Accepted Answer

The correct formula to calculate retained earnings is:

b. Beginning retained earnings + net income - dividends

Here's the step-by-step process:

1. Start with the beginning retained earnings: This is the accumulated portion of net income that is not distributed to shareholders as dividends. You can find this number from the previous year's balance sheet.

2. Add the net income: This is the company's total earnings, also known as the bottom line. It's calculated as revenues minus expenses, taxes, and costs of goods sold. You can find this number on the income statement.

3. Subtract dividends: If a company pays dividends to its shareholders, this amount is subtracted from the retained earnings. Dividends are a portion of a company's earnings that are distributed to shareholders.

The result is the retained earnings for the current period.

The formula to calculate retained earnings is:a. Net income - dividendsb. Beginning retained earnings + net income - dividendsc. Net income + dividendsd. Beginning retained earnings - net income - dividends

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