1st year requiring a balance sheet

[criver]

I'm using Turbo Tax Business. We report on a cash basis. This is the first year that a balance sheet is required with sales over 250K.

The business is cash basis, no AR, no AP. No Inventory, No assets what-so-ever. All is rented and therefore expensed. There are no shareholder loans.

Lets assume there is zero net income. The only items appearing on the balance are BY bank account balance and YE bank account balance. The Balance sheet will be out of balance by sheer fact of the difference between  the opening and ending bank account balance!

Where would any other entry be made that balances it?

Now when you add in the net income, it appears as retained earnings. Which again confuses me since the S Corp is a pass-through entity. Why is it shown as retained earning? What effect will that then have on the next year's balance sheet?
Especially if the income is below 250K which doesn't require the balance sheet.

[Anonymous]

if you have $0 net income, how did cash balance change from beginning of year?  how does the S-Corp have beginning cash.   (the usual way is that shareholders put in money for the stock) .  you seem to know very little about s-corp operations and reporting.  seek professional help at least until you understand how thinks work to change balances.

true an S-Corp is a pass-through entity but undistributed earnings are reflected as retained earnings and taxed to shareholders regardless of whether distributed or not.  when you distribute the earnings (which will be tax free) retained earnings will go down. 

[criver]

Thank-you so much Tax Pro for your insight. You may still be able to answer my question.
       "This is the FIRST YEAR that a balance sheet is required with sales over 250K"
There are no numbers to carry forward from the previous balance sheets.
Initial owner investment for cash in the bank has been repaid long ago.
       "Lets ASSUME there is zero net income"
Lets ASSUME that expenses are also 250K. Therefore zeroing out the income.
There are no receivables and all bills are paid at the end of the year so no payables. But reporting is on a cash basis so nothing is accrued anyway.
There is no inventory value.
There are no business assets since everything is rented.

You may have read through my question too quickly. Admittedly, my weakest area is understanding all the background areas that cause a balance sheet to be out of balance. Perhaps you could take another look?