Home For accounting professionals General accounting discussion
Current updates regarding coronavirus (Covid-19) and the precautions AAT are taking will be continually updated on the below page.

Please check this link for the latest updates:
We hope you are all safe and well and if you need us we will be here. 💚

B/F Retained profit + dividends to pay.. HELP

knowledgeispowerknowledgeispower Just JoinedRegistered Posts: 31
hope someone can help me please?
I've taken over a client from another accountant and having some trouble making sense of some of the things...The 'old' accountant has been really helpful but don't want to nag with silly stuff.
So, the client gets a monthly report of accounts with available dividends to take out and expenses that was paid from the client personal account etc.
However, there has been a B/F retained profit (from prev year) added on every month. even if client takes out all available dividends.
IE:month 9
Turnover 200
less expenses 50
operating profit 150

corp tax liability 30
less dividends paid to date 100
current net profit 20
B/F retained profit 10
dividends available 30

so the client then takes out 30 dividends (plus salary etc), but then B/F retained profit of 10 is added on again in month 10.
How can that be right? Am I not seeing something that I should?
Please help I am going out of my mind...

thanks in advance



  • Zoynal98Zoynal98 MAAT, AATQB Posts: 65
    edited May 2017
    It's brought forward from the previous month, no? Retained Profit should remain 10, dividends shouldn't impact this as it's not a P&L item.
  • knowledgeispowerknowledgeispower Just Joined Registered Posts: 31
    so it's been added up every month:
    Dividends available=B/F retained profit+current net profit
    and retained profit is from previous accounting year
    if client has taken out full amount in month 1 or 2 why is B/F retained profit is still being carried forward and added to available dividends to take out every month??
  • BertieBertie West Midlands Registered Posts: 376
    When you say you've taken on this client from an accountant do you also mean you're the new accountant?
  • BeccaLouJ9BeccaLouJ9 Experienced Mentor DevonFMAAT Posts: 1,022
  • BertieBertie West Midlands Registered Posts: 376
    When I was a young pup, during my time spent as a paper 'kid' some twenty years ago now (can't believe it's that long ago - but hey ho) I was under the impression that accountants were super stars.

    Now my thinking is closer to them being Cowboys.

    I'm by no means a Wizard, but some of the questions are extraordinary.

    And yes you're are correct @Mickdundee over step the line and your post will disappear.

    Ah well, best go and find the horse.
  • RyanMIPRyanMIP LincolnshireRegistered Posts: 50
    Knowledge may well be power, but a little knowledge is dangerous.
  • paulstaffordpaulstafford Feels At Home Registered Posts: 126
    Beam me up Scotty
Sign In or Register to comment.