I need to make a journal entry to change my net income to match my profit and loss. I have a loss for the last 6 months but have a gain for the past 18 months and my balance sheet shows retained earnings but a loss so my profit and loss shows a gain. how do i make a yr end journal entry to adjsut this?
Let's say that for all of 2008 you have income of $2,000. For the first six months of 2009 you have a loss of $500. Your 2009 income would be -$500, and your retained earnings for both periods is $1,500 positive.
Retained earnings on the balance sheet is the accumulation of P&L over time, not the annual amount.
Does this help?
yes it makes sense but i need to show a profit for the past 18months not a loss, i need the retained earnings to stay as earnings so the lack of income over the past couple months shows a profit not a loss
I don't understand your terminology, but from a GAAP standpoint, it's inappropriate, and considered misleading, to have an accounting period of more than a year in length. You can't just arbitrarily "pull" last year's net income forward so that it appears to be positive in the current year.
sffin, for whom do you "need" to show a profit?
Why don't you create a report for all the periods(like mine example was for 2008 and Jan-Jul 2009? Use those dates, Jan 08-Jul 09, but then modify the report so it totals the data into years(other words, Jan-Dec 2008 and Jan-Dec 2009)? The first column will be all of 2008 and the second column will be Jan-Jul 2009. Then 08 will be a profit and 09 will be a loss.
