Balance Sheet unbalanced

[jazzymaddy]

Sorry to ask what has been asked several times already, but I can't find the specific answer I'm looking for. I'm going back and doing 2017 business taxes (no judging.... ;)), and thought I had entered everything correctly, but our balance sheet is not balanced. I have entered the bank statement balance for the beginning of the year and the end, and they're roughly 40K different (a loss for the year). The balance sheet is reflecting those numbers, but saying it's unbalanced. I think all the profit and loss I entered through the whole process reflect that loss, so I'm wondering why the balance sheet is wanting to show 0 when there IS a loss. I'm getting all twisted up trying to wrap my brain around it...

I went back and just entered zero for beginning and end to see what difference it would make, and it happily balanced, even considering all the profits and losses entered. I am sure I'm just looking at something sideways or something. Help??

Thanks!
Tracy

[Anonymous]

we probably can't help. we can not see the return and without knowing what transpired during the year, it's impossible to offer a proper solution.     here is an example: started the year with $60,000 cash no other assets and no liabilities.  for a Partnership Partners capital or for a Corporation capital stock + additional paid-in capital + retained earnings +/- adjustments to shareholders equity - treasury stock should equal $60,000

now you had a cash loss of the $40,000.   cash should now be $20,000 and partners capital or the net of the stockholder equity a/c's should be $20,000

[Anonymous_ · Accepted solution]

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@jazzymaddy wrote:

I think all the profit and loss I entered through the whole process reflect that loss, so I'm wondering why the balance sheet is wanting to show 0 when there IS a loss.

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You might not have to even bother with the balance sheet depending upon the form of entity and the volume of your business.

See Question 11 (Schedule B) for S corporations: https://www.irs.gov/pub/irs-pdf/f1120s.pdf

See Question 4 (Schedule B) for partnerships/LLCs: https://www.irs.gov/pub/irs-pdf/f1065.pdf

Regardless, it hopefully goes without saying that there is a difference between a balance sheet and a P&L statement. 

[PuckHead]

Hmm no those #1 rules don't work for us.  Still need the L & M-1.

All else balances  Income Reconciliation and Retained Earnings.  It looks like others just entered the difference in Retained earnings.  Is that the right way to go?

[Mike9241]

for 1120 does ending retained earnings per M-2 = retained earnings per balance sheet?

for 1120 does the total of the ending balances per M-2 = retained earnings per the balance sheet

if not the IRS may notice it was plugged whether they inquire or not is unknown