QUESTION from Joe:
Hi Guys. In need of some investor books help. here are my questions:
1) In need a video/instructions for creating intercompany transactions.
For example, we have multiple LLC and each LLC has its own tax return.
If all owner capital contributions are deposited into LLC1, then are transferred through bank transactions to LLC2 or LLC3, how do I set up my chart of accounts for that transfer?
2) At year end, how do I clear out the Income Statement for all the entities to Retained earnings?
Remember the Income Statement is organized by class (not separate accounts for each property), so how does that end of year Income Statement get put in the proper retained earnings accounts?
Thank you,
Joe
This Area Is For Registered Users Only. Not a Registered User? Click Here
Mike, I know you don’t care about the equity section of the balance sheet, but retained earnings is what you have gained or lost over the years. Also, your current year’s profit or loss will show in the equity section of the balance sheet. Without having this in the balance sheet, for LLC#1, your balance sheet is not balanced. Assets should balance to Liabilities plus Equity every day of the year. In your video, you had assets of 2.3M and liabilities of 760K, I may be off slighty, but this balance sheet is off by about $1.5M.
So, how can you create a balance sheet that will carryover a class, such as LLC #1, from the income statement, and carry forward retained earnings by class or LLC so that each LLC will have a balance sheet that balances every year and every day?
Sincerely,
Darren
PS
Thank you for all the quick responses.
RULE #1: “EVERY TRANSACTION MUST HAVE a CLASS Entered (Owner or Property) PERIOD”
Yes, you can have separate balance sheets for each entity.
I am making a short video for you right now to show you how to do it and MEMORIZE Each Report
Mike Butler
Thanks Mike! I have a couple of follow up questions. For the LLC, single or multiple, are we suppose to classify every item regardless whether it is a income statement item or a balance sheet item? Also, can I run a balance sheet just for LLC #1 that will not show LLC #2 balance sheet items? This is where my issue comes in, as my balance sheet is not in balance when I run a report just for LLC #1.
Darren
Joe’s partner