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JKCPA
JKCPA, CPA
Category: Tax
Satisfied Customers: 5884
Experience:  CPA with tax experience.
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My 2007 1120S did not include $37 on Schedule L line 18 for

Customer Question

My 2007 1120S did not include $37 on Schedule L line 18 for credit card payable. I am preparing the 2008 1120S and cannot get Schedule L to balance. What entry do I need to make to correct this?
Submitted: 7 years ago.
Category: Tax
Expert:  JKCPA replied 7 years ago.
Hello. Thanks for your answer.

The proper thing to do would be to file an amended 2007 Form 1120S to correct that Schedule L to include the amount on line 18. It is a lot of work for just a minor $37 error. Then your 2008 form should balance. But you may have to amend Schedule K-1's for 2007 also. Be sure to mark the box for amended return at the top of the 1120S and attach a statement explaining the change.

Perhaps instead, you could just list the $37 in column (b) on line 18 of the 2008 Form 1120S and attach an explanation saying a minor error was made on the 2007 Sch. L and this is a correction.

Hope this helps!

Edited by JKCPA_Alliance ATS on 10/5/2009 at 5:04 PM EST
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Customer: replied 7 years ago.
Thank you for the reply and I am sorry for the delay in getting back to you. I like your advice of making the adjustment on the 2008 return instead of filing amended returns. If I can follow-up on your answer, when I add $37 to line 18 the totals for column (b) and (d) will show an out of balance amount of -37. How will this reconcile the following year?
Customer: replied 7 years ago.
Thank you for the reply and I am sorry for the delay in getting back to you. I like your advice of making the adjustment on the 2008 return instead of filing amended returns. If I can follow-up on your answer, when I add $37 to line 18 the totals for column (b) and (d) will show an out of balance amount of -37. How will this reconcile the following year?
Expert:  JKCPA replied 7 years ago.
If the $37 was for some type of asset, you would have to also add $37 in an asset categoriy on Schedule L, lines 1-15. If it was not an asset, you could enter a negative (37) on line 25 (column b) to get it to balance. Then it all should reconcile.

Customer: replied 7 years ago.
Excellent. Thanks for the quick response.