Make a payment of retained earnings to withdraw

1

how to make payments from retained earnings to capital accounts which is drawings are we using journal entry or on the payment tab or is there alternative solution

2

I am not sure if we did the right thing but our accounts and tax authorities were ok with it.

In our case we created in ā€˜Settings ā†’ Capital subaccountsā€™ a new account called ā€œshare of profit / or lossā€. We then made a journal entry where we selected the retained earnings account and credited the amount (source) and selected for each shareholder the capital account (one line for each) where their part was debited to (destination) each combined to total the balance in the first line retained earnings amount. Note that

This does not reflect any i.e. payments to the shareholder or in some cases receipts where the retained earnings would be negative (Loss).

3

and how can i write that i own my sole business and i need to pay myself as owner of the business how can i write in manager.io to record the transaction

4

Read the following two guides:
https://www.manager.io/guides/8936
https://www.manager.io/guides/14397

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5

@administrator4, understand that you never make a payment from Retained earnings. You can only make a payment from a cash or bank account. You can distribute profits from Retained earnings to someoneā€™s capital account. But this is just a transfer of credits from one account to another and has nothing to do with money leaving the business. The payment then credits the cash or bank account and debits the capital account, using the subaccount Drawings.

You should also read the Guide: Simplify equity accounting for sole traders / proprietors | Manager. You may not need to use capital accounts at all.

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