We have learned that net income is an increase in owners’ equity resulting from profitable operations. Previously, we learned when a business is organized as a corporation, retained earnings represents the increase in stockholders’ equity that has accumulated over the years as a result of profitable operations. Thus, net income for any one year should explain a large part of the change in retained earnings from the beginning of the year to the end. Go tohttp://www.jcpenney.com (Links to an external site.)
Find net income for most recent annual report on the companys 10-K. Now compute the difference between retained (reinvested) earnings at the beginning of the year and at the end. What are reasons for difference? Use excel file attached to complete.