From the Statement of Retained earnings, we know that ending Retained earnings are equal to beginning retained earnings plus net income minus dividends. We can therefore replaced Retained earnings with these accounts in the equation: Assets = Liabilities + Common stock + Beginning retained earnings + Net income- DividendsFrom the Income Statement, we know that net income is equal to revenues minus expenses. After doing this, the equation becomes:Assets = Liabilities + Common stock + Beginning retained earnings + Revenues - Expenses- Dividends
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