ThomasM125
Expert Alumni

Business & farm

You can change the beginning of year retained earnings balance on line 24 of schedule L along with a corresponding change to line 1 of schedule M2, and that will change the ending retained earnings balance for the current year. However, you need to determine where the distributions ended up on your prior year balance sheet as listed on schedule L and offset the adjustment to retained earnings with a change to that account. In other words, do you have a liability or equity account on your prior year balance sheet where the distributions were entered? If so, transfer that balance to your prior year retained earnings, as that is what you should have done in the first place.

 

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post