How to deal with year end undistributed profits?

Covering losses in previous years.

Reserved for future years.

provision of surplus reserves, etc.

Conversion of capital. Dividends to shareholders.

For individual shareholders, individual income tax should be paid on the basis of interest, dividends and bonuses (tax rate of 20%).

For corporate shareholders, corporate income tax is exempted.

The amount of undistributed profits at the end of the year has not been provided for surplus reserve (and the statutory provision has not been mentioned), and it is recommended to make up for it.

There is no distribution of dividends, can it be left all the time? - You can leave it all the time.

Profit distribution. 1.The surplus reserve is used to cover the loss.

Borrow: surplus reserve.

Credit: Profit Distribution - Other Transfers.

2.Withdrawal of surplus reserve and statutory community chest.

Borrow: Profit distribution - withdrawal of statutory surplus reserve.

Withdrawal of statutory Community Chest.

Withdraw any surplus reserve.

Credit: Surplus Reserve – Statutory Surplus Reserve.

Statutory Community Chest.

Arbitrary surplus reserve.

3.Profits that should be distributed to investors.

Borrow: Profit distribution - profit payable.

Credit: Profit payable.

4.The amount of capital to be converted according to the approval of the board of directors or similar body, after the capital increase procedures.

Borrow: Profit distribution - profits converted into capital.

Credit: paid-in capital, etc.

5.Adjust for increased prior year profits or adjust for decreased prior year losses and a corresponding increase in income tax.

Borrow: the relevant subject.

Credit: Prior Year Profit and Loss Adjustment.

Tax Payable – Income tax payable.

Adjust for reduced prior year profits or adjust for increased prior year losses and a corresponding reduction in income tax.

Debit: Profit and loss adjustments for prior years.

Tax Payable – Income tax payable.

Credit: The relevant account.

After the adjustment, the balance of the Prior Year Profit and Loss Adjustment account is transferred to the Profit Distribution - Undistributed Profit account.

Carry forward the profit (or loss) for the whole year

1.At the end of the year, the net profit realized for the whole year is transferred from the "Profit of the Year" account to the "Profit Distribution" account.

Borrow: Profit for the current year.

Credit: Profit Distribution – Undistributed Profits.

In the case of a net loss, the opposite accounting entry is made.

2.At the same time, the balances of other active accounts under the "Profit Distribution" account are transferred to the "Profit Distribution - Undistributed Profits" account.

Debit: Profit distribution - undistributed profits.

Credit: Profit Distribution – Withdrawal of Statutory Surplus Reserve.

Withdrawal of statutory Community Chest.

Withdraw any surplus reserve.

Profit payable. Profits converted into capital.

Borrow: Profit distribution - other transfers.

Credit: Profit Distribution – Undistributed Profits.

1. If the undistributed profit is a debit balance, it can be posted all the time. If you make a credit balance, you can make a profit distribution.

2. Profit distribution.

1) The net profit after tax realized by the enterprise in the current year shall be distributed in the order prescribed by the state. If the enterprise incurs a loss, it should make up for it in accordance with the prescribed procedures, and if it is an annual loss, it can be made up with the profit of the next year. If the profit in the next year is insufficient to make up, the pre-tax compensation can be continued within 5 years; If it is insufficient to make up for it within 5 years, it shall be made up with after-tax profits.

If the annual loss incurred by the enterprise and the period of 5 years of compensation with profits are exceeded, the reserve fund of the enterprise can also be used to make up for it. If the loss of the enterprise in the previous year has not been made up, the statutory surplus reserve fund shall not be withdrawn; Profits may not be distributed to investors until the surplus reserve fund has been withdrawn.

2) Procedures for the distribution of profits.

1. Make up for losses.

2. According to the provisions of the tax law, the loss of an enterprise can be offset by pre-tax profits within a certain number of years, and can only be offset by after-tax profits if it exceeds the specified number of years.

3. Withdraw the statutory surplus reserve.

4. Withdraw any surplus provident fund.

5. Distribute and pay profits to investors.

3) Accounting processing.

1. At the end of the year, the profit of the year will be closed**

1) If the profit for the year is a loss, accounting entries.

Debit: Profit distribution - undistributed profits.

Credit: Profit for the year.

2) If the profit for the year is profitable, accounting entries.

Borrow: Profit for the current year.

Credit: Profit Distribution – Undistributed Profits.

2. The statutory surplus reserve of the enterprise shall be withdrawn according to 10% of the after-tax profit, and the statutory surplus reserve can no longer be withdrawn when the cumulative amount of the statutory surplus reserve has reached 50 of the registered capital.

Withdrawal of Entries: Debit: Profit Distribution - Withdrawal of Statutory Surplus Reserve.

Credit: Surplus Reserve – Statutory Surplus Reserve.

Meantime. Debit: Profit distribution - undistributed profits.

Credit: Profit distribution - statutory surplus reserve.

3. Withdraw any surplus reserve.

Borrow: Profit distribution - withdrawal of arbitrary surplus reserve.

Credit: Surplus Reserve – Any surplus reserve.

Meantime. Debit: Profit distribution - undistributed profits.

Credit: Profit distribution - arbitrary surplus reserve.

4. Distribute dividends to shareholders.

Borrow: Profit distribution - withdrawal of statutory surplus reserve.

Credit: Dividends payable.

Meantime. Debit: Profit distribution - undistributed profits.

Credit: Profit distribution - dividends payable.

The end of each accounting year is the busiest time for our accountants, this is because we need to account for more things than Tongping, and the undistributed profit of the enterprise is one of the key points, and the carry-over of undistributed profits needs to be dealt with comprehensively, let's understand it in detail.

The distribution of profits is the distribution of capital appreciation in operation, not the return of capital. According to this principle, under normal circumstances, if an enterprise has uncovered losses, it should first make up for the losses and then make other distributions.

Undistributed profits have two meanings: one is the profit that is set aside for disposal in subsequent years; The second is the profit for which a specific purpose is not specified. Relative to the rest of the owner's equity, the business has greater autonomy over the use of undistributed profits.

The total profit realized by the enterprise in the current year can be distributed in the following order:

1. Make up for the losses of previous years; (There is no need to make special accounting entries to cover losses with profits).

2. Pay income tax.

3. Withdraw the statutory surplus reserve and public welfare fund.

4. Withdraw any surplus reserve;

5. Distribute dividends on the priority of frankly shouting shares;

6. Distribution of dividends on common shares.

Accounting entries for undistributed profits of a business.

Transfer the balance of the current year's profit account to the undistributed profit account.

Borrow: Profit for the current year.

Credit: Profit Distribution – Undistributed Profits.

Withdraw any surplus provident fund.

Debit: Profit distribution - undistributed profits.

Credit: Surplus Reserve.

Distribution of profits to shareholders (dividends, generally after the shareholders' meeting of the following year).

Debit: Profit distribution - undistributed profits.

Credit: Dividends payable.

The above content is about the treatment of undistributed profits of the enterprise, we must not only learn how to write entries, but also apply it in practical work, and consider the actual situation in many aspects.

The calculation of undistributed profit is as follows: undistributed profit = closing balance of profit for the current year + closing balance of profit distribution. Undistributed profit refers to the undistributed profit of the enterprise, which refers to the profit of the enterprise that has been retained in the enterprise after making up for the loss, withdrawing the surplus reserve and distributing the profit to investors.

Specifically, there are two situations: one is the profit that is left for disposal in the following year, and the other is the profit that is not specified for the specific purpose of the pure Qi. In addition, according to the relevant laws and regulations, after the total profit realized by the enterprise in the current year is distributed in the following order, the remaining profit is the undistributed profit at the end of the year:

1. Make up for the losses of previous years; 2. Pay income tax. 3. Withdraw the statutory surplus reserve and public welfare fund. 4. Withdraw any surplus reserve; 5. Distribution of dividends on preferred shares; 6. Distribution of dividends on common shares.

The undistributed profit at the end of the period = the undistributed profit at the beginning of the period + the net profit realized in the current period - the surplus reserve withdrawn in the current period - the profit distributed to investors in the current period.

The undistributed profit is the result of the adjustment between the profit realized in the current year and the distributed profit at the end of the year.

Undistributed profit refers to the profit of the enterprise after the net profit realized by the enterprise has been retained in the balance of the enterprise over the years after the profit realized by the enterprise has made up for the loss, withdrawn the surplus reserve and distributed the profit to investors. Compared with other parts of the owner's equity, the enterprise has greater autonomy over the use of undistributed profits, and is restricted by national laws and regulations.