USA PIC & Retained Earnings

[Jason1482]

I am looking over a balance sheet for school, can someone explain how additional paid in capital can be positive on a balance sheet and the retained earnings is a negative value. I understand how each can positive or negative, but would the PIC be from investing capital, while the retained earning is just a cumulative loss? I was also considering the positive PIC was taken as a shareholder distribution, causing retained earnings to be at a negative now....is that possible?

Thanks

 

[bklynboy]

PIC is always positive meaning it cant be below 0 since it represents the amount of capital paid in by he shareholders. Retained earnings represents accumulated profits (or losses) of the company and is negative when the company has cumulative net losses. Doesnt impact the PIC which is solely what the y contributed as capital. They are not related.