Balance Sheet Confusion
Tony Nelson
tonyn at openlearning.com
Mon Jul 7 23:18:18 EDT 2008
Hi Charles,
You could not possibly ask too basic of a question. I don't think we
did close the books on 9/30. Rather we created some opening balances in
an attempt to start the year off where our QuickBooks program left off.
I'm going to back up my program and look into closing the books. I
don't meet with my bookkeeper until Wednesday, so I'll probably not have
any follow up questions until then.
Thanks for bringing this to my attention.
--Tony
On Mon, 2008-07-07 at 20:12 -0700, Charles Day wrote:
> On Mon, Jul 7, 2008 at 6:26 PM, Tony Nelson <tonyn at openlearning.com>
> wrote:
> Hi Jannick,
>
> Here is the balance sheet as of 9/30/07, and 7/2/08. To
> answer
> Charles' question, yes the balance sheet does balance.
>
> The Net Income as of 09/30/07 is $56,626.36
>
> The Net Income as of 07/02/08 is -$26,729.73
>
>
> At the risk of sounding silly, did you close the books on 9/30?
> Because it looks to me as if your income and expense accounts were not
> zeroed out, causing retained earnings through 9/30/07 to mix with the
> next period.
>
> Retained Earnings through 9/30/07 ($56,626.36) plus Retained Loss
> 10/1/07-07/02/08 (-26729.73) = $29,948.14 which is what it shows on
> your balance sheet.
>
> -Charles
>
>
>
> Balance Sheet 09/30/2007
>
>
>
>
>
>
>
>
>
> Assets
>
>
>
>
>
> Assets
>
>
>
> $0.00
>
>
> Accumulated
> Depreciation
>
>
> -$207,043.00
>
>
> Computer
> Hardware
>
>
> $176,435.01
>
>
> Current
> Assets
>
> $0.00
>
>
>
>
> Franchise
> Tax Board
> Deposit
> $800.00
>
>
>
>
> BoA Checking
> $19,018.64
>
>
>
>
> Savings
> Account
> $0.00
>
>
>
> Furniture &
> Fixtures
>
>
> $11,836.74
>
>
> Shareholder
> Advance-Wm
> Nelson
>
>
> $798.00
>
>
> Vehicles
>
>
> $27,387.12
>
>
> Accounts
> Receivable
>
>
> $56,626.36
>
> Imbalance-USD
>
>
>
>
> $0.00
> Orphan-USD
>
>
>
>
> $0.00
> Total
> Assets
>
>
>
>
> $85,858.87
>
> ____________
>
> ____________
> Liabilities
>
>
>
>
>
> Liabilities
>
>
>
> $0.00
>
>
> Credit Card
>
>
> $0.00
>
>
> Fica Payable
>
>
> $0.00
>
>
> FIT Payable
>
>
> $0.00
>
>
> FUI Payable
>
>
> $56.00
>
>
> Medicare
> Payable
>
>
> $0.00
>
>
> SDI Payable
>
>
> $0.00
>
>
> Sep/Ira
> Payable
>
>
> $29,125.00
>
>
> SIT Payable
>
>
> $0.00
>
>
> Accounts
> Payable
>
>
> $0.00
>
> Total
> Liabilities
>
>
>
>
> $29,181.00
>
> ____________
> Equity
>
>
>
>
>
> Equity
>
>
>
> $0.00
>
>
> Common Stock
>
>
> $47,686.74
>
>
>
> Opening
> Balances
>
>
> -$56,626.36
>
>
> Retained
> Earnings
>
>
> $8,991.13
>
> Retained
> Earnings
>
>
>
>
>
> $56,626.36
> Total
> Equity
>
>
>
>
> $56,677.87
>
> ____________
> Total
> Liabilities
> & Equity
>
>
>
>
> $85,858.87
>
> Here is the balance sheet as of 6/2/08
>
> -----------------------
>
> Balance Sheet 07/02/2008
>
>
>
>
>
>
>
>
>
> Assets
>
>
>
>
>
> Assets
>
>
>
> $0.00
>
>
> Accumulated
> Depreciation
>
>
> -$207,043.00
>
>
> Computer
> Hardware
>
>
> $178,269.81
>
>
> Current
> Assets
>
> $0.00
>
>
>
>
> Franchise
> Tax Board
> Deposit
> $800.00
>
>
>
>
> BoA Checking
> $9,179.52
>
>
>
>
> Savings
> Account
> $0.00
>
>
>
> Furniture &
> Fixtures
>
>
> $11,836.74
>
>
> Shareholder
> Advance-Wm
> Nelson
>
>
> -$10,000.00
>
>
> Vehicles
>
>
> $27,387.12
>
>
> Accounts
> Receivable
>
>
> $19,517.95
>
> Imbalance-USD
>
>
>
>
> $0.00
> Orphan-USD
>
>
>
>
> $0.00
> Total
> Assets
>
>
>
>
> $29,948.14
>
> ____________
>
> ____________
> Liabilities
>
>
>
>
>
> Liabilities
>
>
>
> $0.00
>
>
> Credit Card
>
>
> $0.00
>
>
> Fica Payable
>
>
> $0.00
>
>
> FIT Payable
>
>
> $0.00
>
>
> FUI Payable
>
>
> $0.00
>
>
> Medicare
> Payable
>
>
> $0.00
>
>
> SDI Payable
>
>
> $0.00
>
>
> Sep/Ira
> Payable
>
>
> $0.00
>
>
> SIT Payable
>
>
> $0.00
>
>
> Accounts
> Payable
>
>
> $0.00
>
> Total
> Liabilities
>
>
>
>
> $0.00
>
> ____________
> Equity
>
>
>
>
>
> Equity
>
>
>
> $0.00
>
>
> Common Stock
>
>
> $47,686.74
>
>
>
> Opening
> Balances
>
>
> -$56,626.36
>
>
> Retained
> Earnings
>
>
> $8,991.13
>
> Retained
> Earnings
>
>
>
>
> $29,896.63
> Total
> Equity
>
>
>
>
> $29,948.14
>
>
> ____________
> Total
> Liabilities
> & Equity
>
>
>
>
> $29,948.14
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
> On Tue, 2008-07-08 at 01:14 +0200, Jannick Asmus wrote:
> > Hi Tony,
> >
> > On 08.07.2008 01:00, Tony Nelson wrote:
> > > Hi Jannick,
> > >
> > > Here is the equity statement:
> > > Equity Statement For Period Covering 09/30/2007 to
> 07/02/2008
> > >
> > >
> > >
> > >
> > > Capital, 09/30/2007
> > >
> > > $56,626.36
> > > Net loss for Period
> > > $26,729.73
> > >
> > > Investments for Period
> > > $984,726.34
> > >
> > > Withdrawals for Period
> > > $984,674.83
> > >
> > > Decrease in capital
> > >
> > > $26,678.22
> > > Capital, 07/02/2008
> > >
> > > $29,948.14
> > >
> > > I believe the $56,626.36 is a function of the way we
> recorded Accounts
> > > Receivable at the beginning of the year. I'm going to
> rework that, and
> > > I believe it will go away.
> >
> > I might be helpful to have a look at the balance sheet as at
> 09/30/2007
> > and how your initial values can be traced.
> >
> > > Thanks as always,
> > > --Tony
> >
> > Best wishes,
> > J.
> >
> >
> > > On Tue, 2008-07-08 at 00:37 +0200, Jannick Asmus wrote:
> > >> Hi,
> > >>
> > >> On 08.07.2008 00:20, Tony Nelson wrote:
> > >>> Hi All,
> > >>>
> > >>> I hope you don't mind if I share some numbers as I think
> it will make my
> > >>> question clearer.
> > >>>
> > >>> In QuickBooks I have used "Retained Earnings" to
> designate earnings that
> > >>> remain in the company as we move forward from one year
> to the next. So
> > >>> I have set up an equity account called "Retained
> Earnings".
> > >>>
> > >>> GnuCash seems to use Retained Earnings to record a
> running Income
> > >>> Statement, yet this GnuCash Retained Earnings number
> does not match
> > >>> anything that I can find.
> > >>>
> > >>> Anyway, here is part of my balance sheet:
> > >>>
> > >>> Equity
> > >>> Equity
> > >>> Common Stock $47,686.74
> > >>> Retained Earnings $8,991.13
> > >>> Retained Earnings $29,896.63
> > >>> Total Equity $29,948.14
> > >>>
> > >>> Now if I take the Common Stock value ($47,686.74) and
> add it to my
> > >>> retained earnings figure ($8,991), and subtract my
> current net income as
> > >>> shown on my GnuCash Income Statement for this year
> (-$26,729.73) I end
> > >>> up with $29,948.14 -- My Total Equity number above.
> > >>>
> > >>> I have two questions:
> > >>>
> > >>> 1) Why does my Net Income not show up in the Equity
> portion of the
> > >>> balance sheet (it does under QuickBooks)?
> > >>>
> > >>> 2) What is the $29,896.63 number and where did it come
> from?
> > >> What does your equity statement (under Reports > Income &
> Expense) look
> > >> like?
> > >>
> > >>> Thanks to any of you who take the time to work through
> this.
> > >>> --Tony
> > >> J.
> > >
> > >
>
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