Hi - I am filing the final return for a small business client.
As of 2022 end, there was $500 equity as of last year, and retained earnings of $1020. Total Liability and shareholder equity = $1520. And against that was cash of $1520.
This year the small business wants to liquidate as of November 30, 2023.
Current year net loss is $1450 which means there is $70 ($1520-$1450) cash pending on date of dissolution and retained earnings has gone from $1020 to a loss of -$430 ($1020-$1450).
When I file the return, I am guessing this is the best way to report this:
I’m not understanding some of what you are explaining. But, one thing is clear - if the corporation is being dissolved, then the shares must be redeemed - why do you still have common shares on the balance sheet?
Hi Nezzer, I can make the common shares 0 but how do I show the balance sheet total to 0? If I 0 out the common shares for current year, the balance sheet becomes -500 as you can see in the screenshot.
In theory, i know what needs to be done. Basically 0 out all balances, but how do I show it on the software is the question.
All the GIFI balances should flow from your adjusted trial balance - in whatever software you use prior to importing in Tax Cycle, so I’m not sure if you’re asking how to assign GIFI codes in your bookkeeping software, or if you’re asking how to perform standard year-end journal entries?
