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.
