RETAINED EARINING ARE THE FINAL BALANCE OF THE PROFIT WHICH IS LEFT AND REATINED BACK IN THE BUSINESS AFTER DISTRIBUTION OF DIVIDENDS, HENCE RETAINED EARNING IS DERIVED AFTER PAYMENT OF DIVIDEND
Retained earnings are non distributed profit part and hence a liability of the company to payback to the owners of company on case of dissolution that's why retained earning is liability and not the asset.
Profits and losses are determined via the income statement. When you close out the books for the year that profit or loss gets closed and becomes part of the retained earnings. A loss would decrease retained earning and a profit would increase it. Loosely put, the retained earnings account is a cummulation of all the profits and losses over the years (not counting any other things that affect the bottom line like dividends paid out and such)
retained earnings an asset?
Yes
RETAINED EARINING ARE THE FINAL BALANCE OF THE PROFIT WHICH IS LEFT AND REATINED BACK IN THE BUSINESS AFTER DISTRIBUTION OF DIVIDENDS, HENCE RETAINED EARNING IS DERIVED AFTER PAYMENT OF DIVIDEND
Statment of retained earnings show tha how much opening retained earning was there at start of fiscal year how much net profit in current year and what is the closing balance of retained earnings.
Retained earnings are non distributed profit part and hence a liability of the company to payback to the owners of company on case of dissolution that's why retained earning is liability and not the asset.
Retained Earning is the profit bring in the share capital. Example Company XYZ is running since last 3 years they have not declare any dividend since last two years so in the year 2008 the profit of Rs. 100000 bring in share capital as a retained earning. In the year 2009 again profit of Rs. 150000 bring in share capital as retained earning so (100000 of year 2008 +150000 of year 2009 =250000 in the year 2009). now company declared dividend in the of Rs. 100000 in the year 2010 and generate profit of Rs. 200000 so in the year 2010 the retained earning is ( 100000 of 2008 + 150000 of 2009+200000 of 2010 - 100000 dividend= 350000)
No, retained profit and net profit are not the same. Net profit is the total revenue earned by a company after deducting all expenses, including taxes, overheads, and costs of goods sold. Retained profit, on the other hand, is a portion of net profit that is kept by the company for reinvestment in the business, rather than being distributed to shareholders as dividends.
Retained earning is that part of profit which is not distributed to share holders so it is not part of income statement rather it is part of balance sheet.
Paid in capital is that amount which investor invest in company while retained earning is that portion of profit which is not distributed to shareholders of company.
retained earnings an asset?
Profits and losses are determined via the income statement. When you close out the books for the year that profit or loss gets closed and becomes part of the retained earnings. A loss would decrease retained earning and a profit would increase it. Loosely put, the retained earnings account is a cummulation of all the profits and losses over the years (not counting any other things that affect the bottom line like dividends paid out and such)
Net earning of the firms, included retained earning, dividend etc.
Yes
Stock buyback is one of the three types of appropriated retained earning accounts. Also, new product development and acquisitions are two other types of appropriated retained earning accounts.