Ending Balance Sheet is Out of Balance for Form 1120 - Corporate in Lacerte

If the ending balance sheet (Schedule L) is out of balance, what are some common causes?

Tips to resolve:

1. View the balance sheet on Form 1120, page 4 and determine which line or lines is incorrect or causing the balance sheet to be out of balance. Some lines are input / output and some the program automatically calculates unless an entry is made in Screen 37, Balance Sheet for that item.
2. The following are items automatically calculated by the program (Indicated by an "*" in Screen 37, Balance Sheet):

Assets

• Inventories - Amount automatically flows from Screen 14 - Cost of Goods Sold.  If the amount is different from the cost of goods sold, enter the amount for the Balance Sheet in Ending - Inventories (if different from codes 1 & 15, Screen 14) in Screen 37, Balance Sheet.
• Prepaid Federal Tax - If the box is checked in Accrue Federal Tax (Screen 4.1, code 14), the program will adjust the prepaid federal income tax amount based on the actual tax calculated. In this case, an entry is required for the ending balance. Estimates do not automatically get included in this calculation and must be entered in the ending balance for prepaid tax.
• Prepaid State Tax - If the box is checked Accrue State Tax Option 1(Screen 4.1, code 15), the program will credit the ending balance of prepaid state tax up to the prepaid state tax entered and credits State Tax Payable by any tax remaining.
• Prepaid State Tax (cont.) - If the box is Accrue State Tax Option 2(Screen 4.1, code 16), the following the program will credit the ending balance of prepaid state tax up to the prepaid state tax entered and credits State Tax Payable by any tax remaining as well as make M-1 adjustments.
• Buildings and Other Depreciable Assets - The program will automatically add any assets placed in service in the current tax year in Screen 21, Depreciation to the amount entered in Beginning - Buildings and other depreciable assets (Screen 37, code 116). The program will also subtract any assets sold during the year to arrive at the End of Year balance.
• Less Accumulated Depreciation - The program automatically enters accumulated depreciation on the balance sheet from assets in Screen 21, Depreciation plus the amount entered for Beginning - Less Accumulated Depreciation (Screen 37, code 117) and subtracts any depreciation from assets sold during the year to calculate accumulated depreciation at the end of the year.  The program will default to using federal tax depreciation in this calculation unless and entry is made in Current year book depreciation (Ctrl+T or amount) (Screen 38, code 1).
• Depleted Assets - The program automatically calculates the ending balance as follows: Beginning - Depletable assets (Screen 37, code 118), plus current year change in depletable assets entered in Oil and Gas (Screen 19).
• Less Accumulated Depletion - The program bases its calculation on the entry in Current Year Book Depletion (Ctrl+T or Dollar Amount) (Screen 38, Code 5). If this field is left blank, the program uses federal tax depletion to calculate the ending balance of accumulated depletion.  The current year depletion calculated is added to Beginning - Less accumulated depletion (Screen 37, code 119) to arrive at the ending amount.
• Land (net of any amortization) - - The program basis its calculation on the amount entered in Beginning : Land (net of any amortization) (Screen 37) plus Current year change in land (Screen 21, Depreciation). For this calculation, a "land" entered in Screen 21, Depreciation is defined as an asset placed in service during the currently year having an entry of 99 in Method. The current year change in land from Screen 21 Depreciation consists of the cost of any land placed in service during the current year minus the cost of any land sold during the current year.
• Intangible Assets - The program automatically calculates the ending balance as follows: Beginning - Intangible assets (Screen 38, Code 121), plus current year change in intangible assets entered in Depreciation (Screen 21). For this calculation, an "intangible asset" entered in Depreciation (Screen 21) is defined as an asset placed in service during the current year having an entry of 97 in Method, an entry of Amortization in Category, or an entry in Amortization code section (Screen 21, Code 17).
• Accumulated Amortization - The program bases its calculation on the entry in Current Year Book Amortization (Ctrl+T or Dollar Amount) (Screen 38, code 3). If this is left blank, the program uses federal tax amortization to calculate the ending balance of accumulated amortization.  The current year amortization is calculated is added to Beginning - Less accumulated amortization (Screen 37, code 122) to arrive at the ending amount.

Liabilities

• Federal Tax Payable - If the box is checked Accrue Federal Tax (Screen 4.1, code 14), the program adjusts the entry made in Federal tax payable (Screen 37, code 253) based on the outcome of the tax return. If not accruing federal income tax, the amount entered in Federal tax payable (Screen 37, code 253) carries to Schedule L and is not adjusted.
• State Tax Payable - If the box is Accrue State Option 1 (Screen 4.1, Code 15) or Accrue State Option 2 (Screen 4.1, code 16), the program adjusts the entry made in Ending - State tax payable (Screen 37, code 254) based on outcome of the tax return. If not accruing state income tax, the amount entered in Ending - State tax payable (Screen 37, code 254) carries to Schedule L, line 18 and is not adjusted.
• Ending Retained Earnings - This amount is calculated on the Schedule M-2 of Form 1120.  To override this calculation, enter the desired amount in Ending retained earnings (-1=none)[O] (Screen 38, code 9).  How is retained earnings calculated on Form 1120?.