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Retained Profit in the accounts

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mungry

Just completing my End of Year accounts and I need to understand where retained profits from the previous year goes on the balance sheet and how it impacts on the P&L account.

To clarify on the BS under Capital & Reserves I put this years retained profit. Do I have another line (Accumulated Retained Profit for example) within Capital & Reserves from which to add the previous years retained profits?

On the P&L account the previous years retained profits are added to this years accounts. Are these then added to the Retained Profit for the Period?

Thanks
 
Why don't you get an accountant to do this? If you don't know the answer to the above then you also don't know what you don't know.
Im not trying to be unhelpful but it's full of potential for future problems by trying to DIY.
 
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It's for Ltd. The CT600 isn't due yet. Trying to understand this particular sphere before I complete the paper accounts and then do the CT600.
 
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The PandL account just shows the profit or loss made in the year.

In the balance sheet , in the bottom half you have the capital and reserves. For most simple ltd cos you will have two entries

1. Capital - this is usually the shares in the company

2. Reserves - in a simple case this is last years reserves plus the profit made this year or minus the loss.
 
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Thanks Iridessa for a concise and simple answer. I should have known better to ask such a simple question on an accountant dominated forum. It would have been easier to ask a politician for a straight answer.
 
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David Griffiths said:
So you think that you can do the accounts without doing a tax computation? :rolleyes:
Click to expand...

I should have known it wouldn't be long before this typically patronising attitude rose to the fore.

These are my second year accounts and the question was purely about retained profits. My first year accounts were accepted without question, tax computations included!

I can now proceed with my second years accounts.

:rolleyes: :rolleyes: :rolleyes:
 
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I think what David and I mean is that you need to do your tax comp to include the tax charge in the accounts.

I am at a loss as to why you found this patronising but oh well - sounds like you have it all covered.

I have to say that the example I gave you does show how to represent the PR b/f so I am not sure why you feel that us accountants have not given you a straight forward answer.

Welcome to the forum by the way. I hope you will post often, add value and become a great forum member.

We often have a load of newbies that come along, ask a question, criticise the answers and then we never see them again.

I don;t think you will be one of tohse though will you?
 
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I'm sorry if you feel that replies were unhelpful though hope that you can appreciate that sometimes you need to be cruel to be kind. By asking the question that you did, you demonstrated that you have no capability to prepare accounts correctly and would be better getting someone in who could. It's all too easy to tell you the answer, you trot off on your merry way knowing how to deal with this aspect but getting all else wrong.

Anyway, bygones as Richard Fish would say, i'm with Elaine in looking forward to your informative and valuable contributions to the forum.
 
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My husband runs a ltd company and doesn't have the funds for an accountant which is why i've been stuck with the task for the last three years (however next year there will finally be money for an accountant hooray).

However i am struggling with the new joint form. My P&L account and my balance sheet correspond and balance however now the form insists that i add my profit from last year, however if i do this under reserves then the shareholders funds do not match the retained p&l for the year and the form is saying that they must match (that doesn't seem to make sense to me as it is the P&L for the current year)

My accounts are made up using the DIY accounting spreadsheets so i have all my computations etc but this part of the form is just driving me nuts so hope someone can help.

Thank you
 
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the problem is that due to bad debtors the past two years we have had VAT and CIS/PAYE debts and so the profit has been minimal and our corporation tax last year was £19! We are nearly finished paying them up and so there will finally be some profit we can use.
 
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The alternative is to use paid for specialist software which files the returns directly with HMRC and with the accounts as an iXBRL or pdf attachment. Generally for professional use only, but one whole sight better than the HMRC offering.
 
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