My Schedule L is out of balance.
Schedule L. Balance Sheets per Books.
Assets:
Line1: Cash: 16000
Liabilities:
Line 24: Retained earnings: 13000
Out of balance by: 3000
Where do I allocate the $3000 to balance the Schedule L? Some people add it to Line 23: "Additional paid-in capital", some add to "Capital stock" none of the choices seem right.. not sure.
If I added it to "Additional paid-in capital", will the amount become taxable later as some capital gain etc??
There must be some common practice that accountants use when the Schedule L does not balance with the problem as mine. I am not sure where the problem is or maybe it is not a problem.
The M-2 Worksheet from TurboTax Business calculated the $13000 value given distribution and non-deductible expenses.
Thank you in advance.
