What is retained earnings? What transactions and economic events have an effect on retained earnings? Why is retained earnings considered an indirect investment in an entity?
Answer to relevant QuestionsWhat is accumulated other comprehensive income (AOCI)? Where does it appear in the balance sheet? What causes it to change in a period? Distinguish between the book value and market value of equity. Why are the two amounts usually different? How is book value per share calculated? Why do you think property dividends are accounted for at their market value instead of their carrying amount? Why are property dividends relatively uncommon? Explain why changes in accounting policies and corrections of errors have an effect on retained earnings.For each of the following situations, calculate basic earnings per share for the year ended December 31,2018:
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