Chapter 8, Problem 8.7E

To determine

Conceptual Introduction:

Retained Earnings

Retained Earnings are the profits that have been left with the company after its dividend distribution or any other distributions to its investors. A negative balance in the retained earnings account depict accumulated deficit. It is calculated at the end of each accounting period, whether annually or quarterly. The retained earnings amount is shown as a separate item in the stockholders equity section of the balance sheet.

Retained earnings balance as on December 31, 2017