Showing results for 
Search instead for 
Did you mean: 

Reply to message

View discussion in a popup

Replying to:
Level 10

Reply to message

Given that the net income passes through to the shareholder, you don't want to show any accumulating Retained Earnings. So I would create a journal entry dated 12/31 to move the Net Income for the year debit Retained Earnings, credit Equity (if a profit), but only after the tax return is filed and the Net Income agrees to the schedule reconciling book to tax profit in the tax return.  Then close the books.  The balance sheet will still show a Net Income for each year, as it is a calculation, but each year should be offset by the same amount in Retained Earnings, so it is not accumulating

View solution in original post

Need to get in touch?

Contact us