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Retained earnings is not a tax line issue. The only place on a tax return that retained earnings would be placed is on the balance sheet if you are required to include a balance sheet with your return. Retained earnings is an account used to show the ongoing profits and losses in a business and to process the year end accounting.
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What are temporairly restricted retained earnings?
Prior year earnings, retained in the entity, that will be available for unrestricted use whenever whatever restrictions expire.
Why Auditors prefer to use before tax net earnings instead of after tax net earnings?
Most auditors prefer to use before-tax net earnings instead of after-tax net earnings when calculating materiality based on income statement chiefly because it eliminates the impact of external influences (ie. Changes in tax laws, changes in the tax rates etc.) that could have a significant impact on a company`s net earnings and subsequently the net income materiality base.
What financial statement would you use to find the balance of Retained Earnings?
The blance sheet. It'll be in the last section in Equity.
If a company has 20 million in retained earnings what does that mean?
It means that company can use that amount for favourable investment opportunities if company has available those.
Can you use your last pay slip to fill in tax return?
In Australia, yes you could provided your payslips set out gross YTD earnings and tax withheld from your pay over the course of the financial year.
Can you pull your retained earnings and put into dividends?
Yes retained earnings are maintained for use when company is low in liquidity so company can use its retained earnings to pay dividends or any other business activity in normal course of business.
What are temporairly restricted retained earnings?
Prior year earnings, retained in the entity, that will be available for unrestricted use whenever whatever restrictions expire.
When setting beginning balances where does retained earnings go?
Retained earnings, at a high level, represent a component of equity. Some companies keep separate retained earnings balances (e.g., by year), so the beginning balance in any given fiscal year is $0. Many companies; however, use a single balance for retained earnings and add (subtract) recent year earnings (losses) to prior year earnings (losses) to create the next year's beginning balance.
Is there a restriction on what you can do with retained earnings?
Yes, I think there are some restrictions as to its use. Retained earnings are the accumulated profits/ income that arose from the operation of the business. It's use is sometimes restricted when considering some accounting principles. Mostly, the timing of recording, limit of charging based on the transaction and accounting measures, and qualification of the transactions for Retained earnings to be affected.
How do you label negative retained earnings on a balance sheet?
The term "Retained Earnings" is generally used to describe that portion of stockholders equity derived from profits. (An older term, no longer generally in use, is "Earned Surplus".) Retained earnings represents the accumulation of earnings less dividends since the beginning of the company or accounting entity. In successful companies the retained earnings account normally has a positive balance; but if total losses should exceed total net income it is possible that the retained earnings account could have a negative balance. This is generally known as a "DEFICIT", in answer to the question.
What are the two parts of stockholder's equity in a corporations and indicate the purpose of each?
Stockholders' equity consists of two parts: common stock and retained earnings. Companies record as common stock the investments of assets into the business by the stockholders. They record as retained earnings the income retained for use in the business.
Is it legal for a corporation to buy then use lottery tickets as a deferred charge at the fiscal year-end?
Yes, then any winnings stay in the corporation as retained earnings after paying a smaller income tax than individuals
Why Auditors prefer to use before tax net earnings instead of after tax net earnings?
Most auditors prefer to use before-tax net earnings instead of after-tax net earnings when calculating materiality based on income statement chiefly because it eliminates the impact of external influences (ie. Changes in tax laws, changes in the tax rates etc.) that could have a significant impact on a company`s net earnings and subsequently the net income materiality base.
What is the bookkeeping entry for a revenue reserve?
The bookkeeping entry for a revenue reserve is a debit to the retained earnings account and a credit to the revenue reserve account. This entry is made to set aside a portion of the profits as reserves for future use or to cover potential losses. By separating the revenue reserve from retained earnings, it allows for better tracking and management of the reserve funds.
What financial statement would you use to find the balance of Retained Earnings?
The blance sheet. It'll be in the last section in Equity.
If a company has 20 million in retained earnings what does that mean?
It means that company can use that amount for favourable investment opportunities if company has available those.
You are a business owner can you deduct your life insurance premiums as a business expense?
As a business owner you can fund the policy from the retained earnings (RE) of the buisiness for individual use or coverage. This will allow the business owner to fund the policy from a pool of money that is taxed at the business level vs his/her individual taxation level (usually highest tax bracket)
