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Rakhi Vasavada
Rakhi Vasavada , Financial and Legal Consultant
Category: Finance
Satisfied Customers: 4418
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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here are some opening balance figures from the balance sheet:-paid

Customer Question

here are some opening balance figures from the balance sheet:-
paid in capital 6000
retained earnings 698

net loss from current year 10103

assets
cash openingbl - 4447 - closing - 5000
assets opening 0.00 closing 47602

how this will impact the retained earnings balance?
Submitted: 2 years ago.
Category: Finance
Expert:  Rakhi Vasavada replied 2 years ago.

Rakhi Vasavada :

Dear Friend,

Hello and welcome. Thank you for providing an opportunity to assist you.

Rakhi Vasavada :

Kindly note that the retained earnings are affected by only one input out of all that you have given here. Typically speaking,

Retained Earnings = Beginning Balance + Net Income – Dividends

In your case, whatever the retained earnings are , they will get reduced by net loss of current year, i.e. by 10103. They will go into negative. Let me show you how.


698-10103 = - 9405

Note that -- Should a net loss be greater than beginning retained earnings, retained earnings can become negative, creating a deficit.


Rakhi Vasavada :

I am sure this would help. You may leave a positive rating if this helps or feel absolutely free to revert back with a reply for further assistance. I would be more than happy to keep assisting you.

Warm Regards,