s corps have no retained earnings, right? they are distrinuted to the owners via the k1 @ the end of each year, right?
if so, whats the je look like at the end of the year (in quickbooks) to close out the retained earnings account?
thanx...
s corp question...
Sep 07, 2006
5 Replies
S-corps have retained earnings, the income just gets passed through or assigned to the owners by the K-1 process. (for taxes) The equity section of the balance sheet looks about the same as a regular corp and there are year-end closing procedures but it doesn't involve moving the income off the balance sheet!
.Steve, so is it true the retained earnings would equal all monies "sent" to the 1040's via a k1 schedules?
Steve wrote:
No, the K-1 amount represents the current year's taxable income.
right, so say a s corp is in business for three years...each year the copr has $10k profit, $10k x 3 years gets "k-1'ed" to the sole owner (100%)....The retained earnings account would have a balance of $30k, right?....thanx !!!
Steve wrote:
correct, assuming no withdrawals or other transactions
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