Ask Allan Forum
Get expert answers to your tax questions straight from Allan, our owner and experienced CPA. It’s free, direct, and designed to help you make the best decisions when it comes to your taxes.
Hello,
I am helping my friend to do his company Corporation tax return 2019. I got his previous year 2018 tax return document, his year2018 balance sheet just showed current year retain earning, on this 2018 balance sheet didn't include previous years retain earning which is -78562, (loss), how can I adjust –78562 to my balance sheet 2019? I am thinking one journal entry for retain earning to due to shareholders, but I am not sure if It's right ? Thank you very much!
As you know, the prior year's closing retained earnings should appear on the current year's balance sheet as opening retained earnings. In your friend's case, this was not done properly. Therefore, you will likely need to redo the financial statements for the current year.