(1) Explain how the income statement and the statement of retained earnings relate to the balance sheet.

(2) A statement of retained earnings explains certain changes in the amount of the owners' equity in the business.

(3) Prepare an income statement, a statement of retained earnings, and a balance sheet.

(4) The format of the statement of retained earnings is not complicated.

(5) The prior-period adjustment appears on the corporation's statement of retained earnings to indicate to readers the amount and the nature of the change in the Retained Earnings balance.

(6) Explain the nature of retained earnings, account for dividends, and prepare a statement of retained earnings.

(7) Not a required financial statement , but widely used as a substitute for the statement of retained earnings .