I get all of that, but let me detail my problem.

The TP set up a new S corp a few years ago.  He contributed $101,000.  $1,000 was capital stock, the other $100,000 went into additional paid in capital.

He depreciates the $100,000 by taking $20,000 per year.  

On the balance sheet, after the first year it shows $80,000 of assets.  However, the equity shows $100,000 of additional paid in capital.  It's out of balance.

Do I take out $20,000 of additional paid in capital to make it work?