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While it is arrived at through the income statement the net profit is also used in both the balance sheet and the cash flow statement.
Retained earnings on income statement example. The retained earnings at the end of the year 2015 will be. Retained earnings on january 1 20x8 were 47000. Example 1 kmp limited. It earned a net income of 14 890 during the year and paid a dividend to preferred shareholders amounting to 4 210 and to the equity shareholders worth 3 640.
There was also a prior period adjustment of 2 400. What are retained earnings. The final figure in the income statement net profit is included in the calculation of retained earnings and the statement of retained earnings itself and the balance sheet. Retained earnings re are the portion of a business s profits net income net income is a key line item not only in the income statement but in all three core financial statements.
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