topic I need help with the balance sheet on the 1120s! I'm filing for a business that was closed last year, so the only assets left are cash. No liabilities. in Business & farm

I need help with the balance sheet on the 1120s! I'm filing for a business that was closed last year, so the only assets left are cash. No liabilities.

Linds_ — Wed, 15 Jul 2020 00:52:08 GMT

I'm confused where it's telling me the year's income is a liability, and can't figure out where to adjust it on the assets. I hate accounting!!

Re: I need help with the balance sheet on the 1120s! I'm filing for a business that was closed last year, so the only assets left are cash. No liabilities.

Anonymous_ — Wed, 15 Jul 2020 01:30:54 GMT

Can you describe the issue (i.e. include numbers) more precisely?

I understand that you hate accounting but (a) you might not even be required to complete the balance sheet and (b) since cash is an asset, you need to balance that out on the liabilities/equity side.

Re: I need help with the balance sheet on the 1120s! I'm filing for a business that was closed last year, so the only assets left are cash. No liabilities.

Linds_ — Wed, 15 Jul 2020 15:22:00 GMT

Ok, so it won't let me skip it because my sales are over $250k. :( Unless there is a way around that?

My profit is only about $38k. It's showing that as a liability, but I can't figure out where to balance it as an asset.

Beginning bank balance: $9684

Ending bank balance: $0 because we closed the business, and cashed out. Do I need to show what was there when we closed in October?

Retained Earnings: $38,382.

As far as I can see on this balance sheet, that's all it's asking for? But where do Retained Earnings go as an asset??

Thank you so much!!

Re: I need help with the balance sheet on the 1120s! I'm filing for a business that was closed last year, so the only assets left are cash. No liabilities.

Anonymous_ — Wed, 15 Jul 2020 15:39:03 GMT

Go through the Retained Earnings Reconciliation and check there.

Also, if you closed the business during the tax year, there was probably a distribution to shareholders you did not enter (which will reduce your RE).

Re: I need help with the balance sheet on the 1120s! I'm filing for a business that was closed last year, so the only assets left are cash. No liabilities.

Linds_ — Wed, 15 Jul 2020 15:50:48 GMT

Ah!! So that income should be reported as shareholders' earnings in the wages/deductions??

Re: I need help with the balance sheet on the 1120s! I'm filing for a business that was closed last year, so the only assets left are cash. No liabilities.

Linds_ — Wed, 15 Jul 2020 15:56:25 GMT

Where would I put the beginning bank balance as a liability? Some sort of accounts payable? To shareholders' equity?

Re: I need help with the balance sheet on the 1120s! I'm filing for a business that was closed last year, so the only assets left are cash. No liabilities.

Anonymous_ — Wed, 15 Jul 2020 16:03:39 GMT

Cash is not a liability, it is an asset. Your beginning balance would most likely be the ending balance from the prior tax year. Your ending balance would be zero if you closed the business and withdrew and distributed the cash to shareholders (or paid balances due to creditors).

Re: I need help with the balance sheet on the 1120s! I'm filing for a business that was closed last year, so the only assets left are cash. No liabilities.

Linds_ — Wed, 15 Jul 2020 16:07:05 GMT

Ok. Yes. I understand that now. So I have my beginning balance as an asset, but where do I balance the excess? I have a little that would have been accounts payable to vendors at the end of the year. The rest was just the money in the business' checking account. Where would that go to balance out the cash as an asset?

Re: I need help with the balance sheet on the 1120s! I'm filing for a business that was closed last year, so the only assets left are cash. No liabilities.

Linds_ — Wed, 15 Jul 2020 16:10:18 GMT

Would I just put it all as accounts payable?

Re: I need help with the balance sheet on the 1120s! I'm filing for a business that was closed last year, so the only assets left are cash. No liabilities.

Anonymous_ — Wed, 15 Jul 2020 16:13:56 GMT

I am not sure I understand; you should have settled all accounts in the process of winding up the business.

Re: I need help with the balance sheet on the 1120s! I'm filing for a business that was closed last year, so the only assets left are cash. No liabilities.

Linds_ — Wed, 15 Jul 2020 16:18:14 GMT

I mean the beginning bank balance for the year. Last year we filed as a sole proprietor, so it didn't ask all these questions. The money in the bank at the beginning of the year was just money in the bank. Also, on that note, it's asking for last year's income to file. Since it was technically a different business, I guess, as a sole proprietor, do I say $0?

Re: I need help with the balance sheet on the 1120s! I'm filing for a business that was closed last year, so the only assets left are cash. No liabilities.

Anonymous_ — Wed, 15 Jul 2020 16:20:05 GMT

Frankly, that is what I would enter if the balance sheet would balance as a result.

Re: I need help with the balance sheet on the 1120s! I'm filing for a business that was closed last year, so the only assets left are cash. No liabilities.

Linds_ — Wed, 15 Jul 2020 16:20:32 GMT

Ok. Thank you so much!!

Re: I need help with the balance sheet on the 1120s! I'm filing for a business that was closed last year, so the only assets left are cash. No liabilities.

Anonymous_ — Wed, 15 Jul 2020 16:23:33 GMT

No problem whatsoever, but I sincerely hope you are aware that the balance sheet is not more consequential as is the fact that your 1120-S is very late; it was due on March 16th and there could be penalties involved for late filing.

Good luck! 😊

Re: I need help with the balance sheet on the 1120s! I'm filing for a business that was closed last year, so the only assets left are cash. No liabilities.

Linds_ — Wed, 15 Jul 2020 16:24:33 GMT

Yep. I didn't realize it was only personal taxes that got the date extended. Whoops.