How do you handle balance sheets for corporations that don't keep books much less double entry ones? Any ideas beside asking them to go elsewhere? And what is the M 2 for anyway?
T C
T C
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How do you handle balance sheets for corporations that don't keep books much less double entry ones? Any ideas beside asking them to go elsewhere? And what is the M 2 for anyway?
T C -
How can you prepare a tax return if they don't keep books?Originally posted by T C THomas View Post
It doesn't have to be a double-entry bookkeeping system. You can take a checkbook and create an income statement and balance sheet. The question is whether the records they have are complete and correct. If not having books means they don't have records, I'd run away.Comment
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Can I assume this is the first year of the Corporation?This post is for discussion purposes only and should be verified with other sources before actual use.
Many times I post additional info on the post, Click on "message board" for updated content.Comment
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not alwaysComment
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Ok, so this is a test question not a real life problem.Originally posted by T C THomas View Post
In order to have a corporation, C/R checks need to be made payable to the corporation' name. Most states, if not all, will not cash a check made payable to the corporation without a corporate checking account. So, 1-Get all bank statements for the year 2- have the client produce all asset bill of sales. 3- Get copies of prior tax returns, if any. 4- find the begining balances for as many issues as there are. 5- get the ending balance for all of #4 above and any new issues developed during the current year. Developing a Balance Sheet is a must whether it is required or not on 1120s page 4.
This is just for starters. If he does not have bank statements> he is probably not a corporation, legally.
Your question about "M-2" indicates that you may be in over your head for this type of client . We all had to start somewhere and a good place for you is TTB section on S Corps. Read it over and over again......Last edited by BOB W; 08-31-2007, 10:34 AM.This post is for discussion purposes only and should be verified with other sources before actual use.
Many times I post additional info on the post, Click on "message board" for updated content.Comment
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I tell them they have to have a proper set of books that can produce an income statement and a balance sheet. I tell them that both are required in order to fill out the corporation tax return. I tell them I would be happy to fill out their corporation tax return once they have supplied me with the items I need in order to fill out the tax return.Originally posted by T C THomas View Post
Would you do a 1040 for an employee if the employee said he lost his W-2 and didn't keep any records of what he earned? Or would you tell him he needs to get a new W-2 before you can do his return?Comment
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Refer
him to a good bookkeeper or accounting firm, if that is something that you don't do.
If your business is both, it is a good way to get a new accounting client.
But all of the other answers were correct also.
Linda FComment
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