Announcement

Collapse
No announcement yet.

Accounting question

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Accounting question

    A question about a Form 1120S balance sheet (Schedule L) and AAA account (Schedule M-2). As for the following two figures:

    (1) The year end balance of the AAA account on line 8 of the Schedule M-2

    and

    (2) The year end retained earnings on line 24 colume(d) of the Schedule L

    Must these two figures be the same?

    Thank you.

    #2
    Not necessarily.

    There are any number of reasons why they won't match.

    Two offhand I can think of - (and I'm sure there are many more) -

    The corporation may not have started out as an S Corp - could have trapped Retained Earnings from C period.

    There could have been investment earnings that were passed through to shareholders
    as Other Adjustments, not as Accumulated Adjustments of operating profits.

    There could have been Additional Paid In Capital.
    Uncle Sam, CPA, EA. ARA, NTPI Fellow

    Comment

    Working...
    X