For example, if the difference between the total revenue and expenses is a profit of $1,400 , credit the amount in the retained earnings account, to zero out the income summary account.

Subtract the dividend payments from the result to get the ending retained-earnings balance. For example, if the beginning retained earnings balance is $100,000, net income is $50,000 and dividend ...

And the whole story will be laid out in one simple retained earnings statement. Fool contributor Rich Smith does not own shares of, nor is he short, any company named above.

An accurate statement of retained earnings will tell investors and other interested parties how a company uses its profits. This can help determine if a company is using its revenue efficiently.

Example of Unappropriated Retained Earnings For the fiscal year-end 2019, Company XYZ has retained earnings of $5 million. Currently, the company's machinery is aged and out of date.

Retained earnings = Cumulative net income minus cumulative ... I'll use a really friendly example so that you can calculate ... Costco reported net income of $2.058 billion on its income statement.

Calculating Costco's dividends in 2014In 2014, Costco reported net income of $2.058 billion on its income statement. On its balance sheet, it reported having retained earnings of $6.283 billion at ...