intacct
Sep 23, 2007, 09:38 PM
I was working on the Trial Balance sheet:
1. I was wondering if Accumulated depreciation should be added to credit account or debit in both trial balance and close trial balance. It is actually part of assets (depreciated from equipment/fixed assets).
2. I am also slightly confused about the retained earning statements. I do get the answer and have put together the statement. But I do not understand the purpose behind the accounts/calculations that take place in that statement. It is very confusing concept for me. I have done the reading also and it is still confusing why we calculate what we are calculating in that statement.
For example:
Why do we do the following and in which order :
Beginning Retained earning=?? 221700 ( how do we calculate this?)
Plus net Income 65275
= ??? (What is this amount called)286975
Why do we minus dividend from the above??? 19100 (given value)
And get ending retained earnings= 267875 (calculated in balance sheet)
Why do we initially calculate Income minus dividend paid=65275-19100=46175
Beginning retained earnings=Retained earning - 46175
Why do we need to plug this number i.e. 46175 above??
I do get the answers but I really wish to understand it completely so that I know the concept behind and why one step is done before the other .for example: why net income is added before dividends are subtracted . I am so sorry for asking such confusing questions. The retained earnings does confuse me a lot even though I know what I need to do to calculate it.
BRE +Net Income-Dividend= end retained earnings ( I use this as well to calculate beginning retained earning but again, concept is confusing)
I would appreciate if you could please help me with this concept,
Thanks a lot in advance,
Jia
1. I was wondering if Accumulated depreciation should be added to credit account or debit in both trial balance and close trial balance. It is actually part of assets (depreciated from equipment/fixed assets).
2. I am also slightly confused about the retained earning statements. I do get the answer and have put together the statement. But I do not understand the purpose behind the accounts/calculations that take place in that statement. It is very confusing concept for me. I have done the reading also and it is still confusing why we calculate what we are calculating in that statement.
For example:
Why do we do the following and in which order :
Beginning Retained earning=?? 221700 ( how do we calculate this?)
Plus net Income 65275
= ??? (What is this amount called)286975
Why do we minus dividend from the above??? 19100 (given value)
And get ending retained earnings= 267875 (calculated in balance sheet)
Why do we initially calculate Income minus dividend paid=65275-19100=46175
Beginning retained earnings=Retained earning - 46175
Why do we need to plug this number i.e. 46175 above??
I do get the answers but I really wish to understand it completely so that I know the concept behind and why one step is done before the other .for example: why net income is added before dividends are subtracted . I am so sorry for asking such confusing questions. The retained earnings does confuse me a lot even though I know what I need to do to calculate it.
BRE +Net Income-Dividend= end retained earnings ( I use this as well to calculate beginning retained earning but again, concept is confusing)
I would appreciate if you could please help me with this concept,
Thanks a lot in advance,
Jia