21
Where do I transfer Retained Earnings & Opening Balance Equity Amounts to?
6/15/09 5:56 PM, Viewed by asker 6/18/09 1:14 PM
Total Views: 554
Total Views: 554
LLC (2 member) - I have an Equity account for each with Profits, Investments & Draws sub accounts. Which of these equity accounts do I transfer Opening Balance Equity after setup and Retained Earnings amounts to at each year end? Both to Profits Equity account? Thanks
All Replies: Answers (1)
Comments (1)
Rating 0
Answer
6/16/09 7:34 AM
If you did your setup right, Opening Balance Equity (a worthless, horrible, never-should-have-been-created account) ought to zero out.
Retained Earnings should be AJE'd to the members' Profits sub-accounts in accordance with their profit/loss sharing percentages.
Hey, we get sig files now! Cool - I wonder what I'll put here? Ah, I know: RTFM.
Comment
Thanks Phoebe,
Well we must have done our setup wrong because my OBE didn't zero out and we're probably 18 months to late in trying to fix that. We switched from Quicken to QB back then. We wish we had used QB from the very beginning because since we've opened we've learned more about accounting & QB (we have much more to learn) but we know that we screwed up bad with trying to use Quicken. In scanning the QB community post I see that we're far from alone with an OBE that didn't zero out. We zeroed this out by adjusting it to the members Profit sub accout based on memebr % P/L. Is this not exceptable or doesn't this clean things up even if it isn't exceptable? Should we have just left it in OBE?
With RE, after we adjust it with the members Profits sub account based on member % P/L, do we further balance each member Draw sub accout from there? Or do we leave it as is? Asking because I've seen some post about zeroing out member Draw accounts on a yearly basis to get a more clear yearly view.