Mr Cooper Group Inc fka COOP

[CBA09]

Ref: . Just what Are' ?, a company's "Retained Earnings" ?, ... and were' the company's, ... "Retained Earnings", ... Bankruptcy Remote

Comment:

Retained Earnings is a permanent "accumulation" account. A given balance is the result of "TOTAL" PAST:

1) Net Income. ( increases Retained Earnings )

2) Net Losses. ( reduces Retained Earnings )

3) Dividends Paid. ( reduces Retained Earnings )

Each fiscal (year end) the net result of temporary accounts (i.e., income and expenses ) from the Income Statement are zeroed out . If Total Income for that year is higher than Total Expenses the net result is an increase to Retained Earnings.

Example: Year end - 2008 Entries to zero out Income Statement Temporary accounts -

Debit Credit
Income $ 1,000

Expenses $ 750

Retained Earnings $ 250 - (Increase as Income greater than Expenses)

Note: a Negative Retained Earnings is a Deficit - meaning:

1) Past Expenses have been greater than Past Income from the Income Statement.


Ref: Retained Earnings, pre-petition as of 09/26/2008 = Deficit $16,739,175,191.00

Retained Earnings, pre-petition as of 02/29/2012 = Deficit $20,770,648,942.00

Comment:

Appears $ 4 Billion of the $ 4.04 decrease in Retained Earnings was related to recognizing the exchange event of trusts preferred. The accounting journal entry would be as follows:

1) Retained Earnings deduction - ( Theory here is that past earnings transferred )

2) Preferred Trust increased