Net Income missing from Balance Sheet

Jannick Asmus jannick.news at gmail.com
Mon Jul 7 19:01:01 EDT 2008


Charles,

On 08.07.2008 00:39, Charles Day wrote:
> On Mon, Jul 7, 2008 at 2:10 PM, Jannick Asmus <jannick.news at gmail.com 
> <mailto:jannick.news at gmail.com>> wrote:
> 
>     On 07.07.2008 22:49, Tony Nelson wrote:
> 
>         Yes it is different than Retained Earnings.
> 
> 
>     I agree.
> 
> 
>         Both QuickBooks and GnuCash show the same "Retained Earnings"
>         amount,
>         which relects historic retained earnings through the end of the
>         prior
>         fiscal year.
> 
>         GnuCash, does not show a line item for Net Income, which is the
>         earnings
>         for the present fiscal year to date (at least that is what it is
>         with
>         QuickBooks).
> 
> 
>     I believe that GnuCash comprises net income in retained earnings.
> 
> 
> Yes, the GnuCash balance sheet's Retained Earnings line includes income 
> during the period. If Quickbooks shows Net Income on the balance sheet, 
> then where on the balance sheet does it show what amount of Net Income 
> has been paid out as dividends (as opposed to retained)?
> 
> I thought that retained earnings in period = net income - dividends 
> paid, so if you show net income on the balance sheet then you would have 
> to show a subtraction for dividends paid as well.

Net income is the company's result of the present fiscal year to date as 
Tony has pointed out above.

Net income of the prior fiscal period and dividends to be paid are to be 
agreed upon by the stakeholder's meeting in general; I expect it like 
that in most of the countries. Dividends are financed by withdrawal from 
(sub-accounts) of equity. Hence we can think of prior year's net income 
as fully retained and dividends as completely financed from earnings 
retained before (!) their distribution.

Note that dividends paid in year 05, say, can exceed net income of year 04.

> Cheers,
> Charles

Best wishes,
J.


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