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Just create a journal entry. Debit retained earnings and credit capital accounts.
@alwakeel There is no restriction in manager for transfer of retained earnings to capital.
Just do the entry as told by @Tut
HI,
Indeed, purely from a bookkeeping viewpoint, you can simply (D) Retained earnings / (C) Capital, and your capital account will reflect the total of the capital+ retained earnings (which is called “Equity” or “Own funds”.
However, from an accounting/legal viewpoint, by doing this you have increased your capital to a new amount. Capital represents the funds that were apported by shareholders/owners into the company, the booking above would therefor show that shareholders apported new capital to the company which is not the case. Very possible that in most countries a capital increase through transfer of reserves (which is Retained Earnings) you need a report for an external accountant/auditor, for this to be done legally. Once funds become capital, they are no longer available for distribution of dividends to shareholders. Capital is only returned to shareholders when the company is liquidated, or when a capital decrease is allowed, which normally would also require an external auditor/accountant report.
Hope this helps.
In the event that the owner of the company is one person or a group of shareholders and they are unanimous in converting the retained earnings to an increase in the paid-up capital without distributing profits from it, provided that it is completely transferred to the capital. For some reason related to obtaining facilities in exchange for raising the company’s capital
my question?
What is the way to transfer the retained earnings to raising the salary through the manager program?
That is only one source of capital. Retained earnings distributed to capital account holders is another. And you speak only in the context of corporate organizations with shareholders. Practices for sole proprietors using capital accounts or partners using capital accounts are completely different.
You completely overlook commonplace capital drawings.
Please just read the Guides:
https://www.manager.io/guides/9820
https://www.manager.io/guides/14397
The second one includes an illustrated example answering your exact question.
In the event that the owner of the company is one person or a group of shareholders and they are unanimous in converting the retained earnings to an increase in the paid-up capital without distributing profits from it, provided that it is completely transferred to the capital. For some reason related to obtaining facilities in exchange for raising the company’s capital
my question?
What is the way to transfer the retained earnings to raising the salary through the manager program?
That is a question for your accountant. It is not related to Manager’s functionality.
No need to shout.
Tut gave the answer in his two links to the guides
If you cannot be bothered to read the guides, then I think you need to move on to another accounting software system asap
I should be sending a private message to you but I chose to make this public for all of us to learn from it.
@alwakeel I have deleted your recent post. Kindly observe all Forum Etiquette here and read the guides (Guides | Manager)
@eko I find your approach aggressive. We are here to get help and also help others. Do all you can to help a new user to understand Manager and Forum etiquette but do not approach a new user, moderators or anyone on this forum like that.
The forum moderators are scattered around the globe and live in different time zones, they cannot police this forum 24 hours a day. If any wrongdoing comes to your attention kindly flag it, report it to a moderator through a private message, or send a private message to the poster to edit or delete the post.
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As @alwakeel Said Specifically about Companies only. Then only there is two reason for transferring Retained earnings to Share Capital:-
- If Bonus Shares Are issued
- If Right Shares Are issued
A. Issue price is more than Face value (entry
for transfer not possible)
B. Issue price is less than face value (retained
earnings used to cover the loss).
If Company decides to Transfer then there must be bonus shares or Right share case B.
welcome
I am the only owner of one of the companies and I do not need to withdraw profits from the company and the addition of the retained earnings has led to the capital. Note that I know very well how, the methods, rules and laws of transferring that money, according to the accounting system, to the capital of the company.
my question is:-
How can this procedure be completed by the manager’s program, and if this procedure is applied by the manager? What accounts are affected by that? Will this lead to changes in the company’s balance sheet?
Note that I have uploaded enough pictures to express through the forum
But everyone who replied to my tweet with regret did not understand my question well
We hope you read the topic well and carefully without answering with a word. Return to the guide
Thank you all for your cooperation
Obviously there is a language barrier, but as I understand it, you want to transfer the amount in “30200 retained earnings” to “30100 capital account.” If that is correct, the answer to
was provided by @Tut in post #4. Simply create the journal entry using the Journal Entries tab.
The only accounts affected will be the retained earnings account and capital account. It will not change the company’s balance sheet because they are both Equity accounts so the total equity will remain unchanged.
But since you are the only owner, this entry would be unnecessary unless required by local laws or regulations, or you plan to admit more owners; all the company’s equity is yours regardless of which sub-account it is recorded in.
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Consistent with this the guide for sole traders recommends renaming “Retained Earnings” to “Owner equity” https://www.manager.io/guides/6971
Hi Tut,
Yes, I was speaking from a company/corporate viewpoint, if it’s a sole woners business, then indeed the “capital” and Retained earnings" could be considered as “C/A owner”
As to “common capital drawings”, again I agree with you, but if it’s a corporation, then funds taken out of the company to shareholders or working partners should be debited to a C/A partners/shareholders account, as it’s an advance to them from the company, not based on a board decision to distribute either dividends or capital.
To answer your question about converting Earnings to Capital :
D : Retained Earnings
to C: Capital
Retained earnings to raise salary ? If salaries are increased, then automatically at moment of increased salary expense, the retained earnngs will be affected by that expense.
But as somebody already pointed out, you’re asking pure accounting questions on a accounting program forum. There are better suited forums for these questions.
Agreed. Not only is this a general accounting topic, it also has to do with local regulations for companies and capital.
Both of which are outside the scope of this forum.
As I understood, @alwakeel is based in Egypt and this is a question regarding Egyptian legal accounting. So why not try to approach one of the Egyptian accountants in this forum?
https://www.manager.io/accountants/eg/
Important note: These accountants are not officially associated with NGSoftware or the Manager software; Manager just provides their contacts as free help.
Whatever happens between you and the accountant is your business and shall result in no obligation on the part of Manager or NGSoftware.