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How is net income connected to retained earnings and how does the Statement of Retained Earnings help the reader of financial statements understand a companys

How is net income connected to retained earnings and how does the Statement of Retained Earnings help the reader of financial statements understand a companys past performance? What could you conclude about a company who ended their 3rd year of operations with a Net Loss of $20,000 but that has an ending balance in retained earnings of $50,000? Describe a scenario that could explain how these results are possible

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