UK Negative retained earnings


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Hi All,

Our company has a negative retained earning balance for last year of £(1m) for example and a net income of say £(500k). This would reduce the retained earnings even further to £(1.5m) in this year. However what are the debits and credits for this? Would the retained earning for the start of this year still have a debit balance? If I were to do the following to start the next year:

DR 1.5m P&L
CR 1.5m BS

I would end up with a credit balance which doesnt feel right?

Many thanks
 
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Joined
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Thanks Kirby, yes my mistake on the suggested entry!
 

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