Help me, Mr. Wizard!

[BOB W]

You may also want to look at the repair part of the business. These trucks that he is selling probably get fixed up for sale. All those fix-up expenses need to be assigned to the particular truck as additional inventory to that truck and only expensed when that truck is sold. Capitalization rules need to be reviewed also.

Just something else to review to pass the time of day.

[Golden Rocket]

To Openfire

Roast me a couple marshmellers.

I make a motion that we accept Openfire's entity posture as it is, not how we think it should be. It is like trying to herd cats, and is sidetracking his original post and the problems presented therein. I think Zee is on the trail to finding the real problems. For example, forget the fact that a proprietor has paid himself a payroll. If his proprietorship deducted his salary in both years, this won't cause a $57K problem.

Sounds like the client has QuikBooks. Once his 2012 return was filed, the retained earnings balance should have been poured in concrete. It should become the Ark of the Covenant, not to be touched without an amended return. If the accountant saved a hard copy of the trial balance for 2012, ask him to produce it. Then compare it to a freshly printed version. This should show the differences and which accounts bear the difference.

One of the things borne by a previous post says the accountant intentionally changed the retained earnings balance, and said it had to be done. If that be true, then he/she should share with you what was done and why it was done.

Time does not permit a discussion of all the possible things that could go wrong, but if you can get the reports mentioned above, it should tell you what you need to know. From the limited discussion, I would be very suspicious of inventory of trucks. When you get to the bottom of the problem, you will probably need to file an amended return for the year that had retained earnings balance changed.

[Openfire]

Thank you all for the input. I really appreciate the assistance. I did have the previous year's B.S. and P&L reprinted to see that I was still working with the same figures. When I questioned things on the account from two years ago, the retiring CPA couldn't answer my questions. Most things were clear, but a few were not. I believe most of the book work is as accurate, but am still relying heavily on a third party bookkeeper, as many of us do, and end up with ending numbers and a few detail printouts. I do not have the bookkeeping account for this one.

I will revisit inventory, and ask the accountant who does the books to review it. I will ask him to look over the previous year's inventory as well. That is a great jumping point.

Working alone, at times I often question if I missed something and really appreciate hearing the thoughts and approaches from you all. Thanks!