Retained profits are profits of that particular financial year (After taken into account of dividends payouts, transfer to reserves and etc) without adding profits from the previous year. When Retained profit of the current year is transferred to the balance sheet after adding previous year profits, it is called retained earnings.
(Retained profit + Retained earnings b/d = Retained earnings c/d).
Retained earnings are current year profit and Reserves are allotted the amount from last year profits as reserves.
1. If dividend paid: Retained Earnings = Net profit - dividend if dividend not paid: Retained earnings = Net profit
only PROFIT WHICH IS RETAINED IN THE BUSINESS
Retained earnings is that part of current year's profit which is not distributed to share holders of company, so as it is a part of profit , it is shown under capital portion of liability side of balance sheet.
Income: all valuable earnings. Profit: valuable earnings minus valued effort/cost in achieving initial income.
Retained earnings are current year profit and Reserves are allotted the amount from last year profits as reserves.
1. If dividend paid: Retained Earnings = Net profit - dividend if dividend not paid: Retained earnings = Net profit
retained earnings=profit after tax- dividend distribution
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.
only PROFIT WHICH IS RETAINED IN THE BUSINESS
Retained Earnings in BS. There are to terms in Finance Net profit and Retained Earnings. Net profit which is earned during the year from the business transactions. where the Retained earnings is carried over from the business over the period of time. which stays either asset or liability side of the balance sheet. Every year the Net profit/Loss is added to the Retained earnings account which is carried forward to the next year and Net profit account is become 0 at the end of the year.
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.
A retained earnings statement contains information about retained earnings and dividends. Some companies also refer to this a profit and loss statement.
If company has the policy to not distribute profit as a dividend then retained earnings will be equal to net income otherwise dividend and retained earnings will be equal to net income.
Retained earnings is that part of current year's profit which is not distributed to share holders of company, so as it is a part of profit , it is shown under capital portion of liability side of balance sheet.
Reserves are similar in this sence that these are also created from net income and retained earnings are as well but the difference is that both are created and limited for different uses in business.
Income: all valuable earnings. Profit: valuable earnings minus valued effort/cost in achieving initial income.