Hello,
As far as I understand, a balance sheet statement includes accumulated profit/loss from all previous years (less dividends paid). So how to reftect retained profit from the previous years on a current P/L statement? Would the following be OK?
...
Net Profit/Loss for the current financial year ......... £ 1000
Dividends Payable ......... £ 200
Retained profit/loss from the previous year ......... £ 500
Total Retained Profit / Loss ........ £ 1300 (this will go to the balance sheet - "Profit & Loss Accounts")
Thank you.
Replies (7)
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In what context are you talking about?
Accounts for a sole trader?
Statutory accounts for a limited company?
Other?
This will have a bearing on the answer.
Yes on those figures the retained profit in the balance sheet at the end of the year will indeed be £1,300.
You are not an accountant I take it.
@Tom
Sole trader? Not if he is paying dividends!
Yes, but:
1. It is preferable to show the movements on Retained Profit in a separate note to the accounts.
2. If you must show them at the bottom of the P&L, the balance brought forward from the previous year should come before the deduction for dividends because dividends are paid out of the retained profits to date, not just out of the current year's profit.
OP never bother responds - see their previous questions.
We need to have markers at the side of usernames for bellends like this.