Closing the year in an LLC
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I want to close the year by distributing net income to LLC member Capital accounts. If I use Retained Earnings, my final Bal Sheet shows Net Income +2700 & Retained Earnings -2700. How can I get them to -0- so I just have the Partner's Capital accounts?
Answer
On the first day of the new year, last year's net income/loss will be in retained earnings. Make a journal entry to zero out retained earning and the offset would be the Partner's capital account.
Hope this helps. If so please mark solved, if not please ask more questions. Thanks!
Ray White
http://community.intuit.com/me...
http://www.raywhiteenterprises.com
Answer
Thank you to Ray and Reka who answered so quickly.
Yes, Retained Earnings is -0- on 1/1, but I want to issue a Comparative Balance Sheet as of 12/31 showing the distribution to the members' capital accounts. Sounds like I need to download to Excel to get what I want on 12/31.
Answer
Or you can make sure that you don't use the first day of the year for transactions and have a comparative balance sheet as of the first of the years.
The Excel is a good solution, too.
Reka
Comment
Look at your balance sheet the next day. If you have not had any transactions on the first day of your new year the retained earnings and the net income will be zero and the capital accounts will show the (last) year's income.
I hope I could help.
Reka