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Balance sheet

Troubleshoot Schedule L balance sheet out of balance message

If your Schedule L total assets don't equal total liabilities, you'll get an error message. Use this information to troubleshoot the problem.

S Corporation

  1. Go to
    Forms view
    , then the RE folder, and open the Retained Earnings Reconciliation Worksheet.
  2. Make sure the information in the
    Schedule L - Retained Earnings
     calculation is correct.
  3. If the
    Retained Earnings - Unappropriated
     amount on the RE worksheet doesn't look correct, go to the
    Schedule M-2 - Retained Earnings
     section.
  4. Look at the
    Retained Earnings Unappropriated/Timing Differences
     column to find out where the
    Retained Earnings - Unappropriated
     amount is coming from.
  5. If you need to change the
    Beginning of year Retained Earnings - Unappropriated
     amount, go to the
    Balance Sheet
     folder. Open the
    L-2
     screen.
  6. If you need to change the
    Retained Earnings - Unappropriated other additions, reductions or distributions
     amount, go to the
    Balance Sheet
     folder and open the
    Ms
     screen.
  7. Check the amounts in the Schedule M-2 section:
    • Transfer basis adjustments to REU/Timing Differences
       shouldn't be marked.
    • Carry book/tax difference to Schedule M-2
       shouldn't have an
      R
      .
  1. Go to the
    Balance Sheet
     folder and open the
    Ms
     screen.
  2. Check the amounts in the
    Schedule M-2
     section.
    • Transfer basis adjustments to REU/Timing Differences
       shouldn't be marked.
    • Carry book/tax difference to Schedule M-2
       shouldn't have an
      R
      .
  1. Go to the
    L-2
     screen in the
    Balance Sheet
     folder.
  2. Be sure that the
    End of Year
     column doesn't have any amounts entered for retained earnings.
  3. Go to the
    Ms
     screen.
  4. Be sure the net income (loss) per books isn't forced.
  5. Check the
    Carry book/tax difference to Schedule M-2
     field to be sure it's correct.

All others

  1. Open the
    L-2
     screen in the
    Balance Sheet
     folder.
  2. Make sure there aren't any amounts in the
    Retained Earnings
     fields in the
    End of Year
     column.
  1. Go to the
    Balance Sheet
     folder and open the
    Mc
     screen.
  2. Check that the net income (loss) per books isn't forced.

More troubleshooting steps

Make sure there aren't any other diagnostics related to the Schedule L that could cause the difference. This includes all FYI and critical diagnostics. Also, make sure there aren't any overrides in Forms View.
  • Verify that you don’t have any additional diagnostics related to the Schedule L which may clarify where the difference is coming from. This includes all FYI and Critical diagnostics.
  • Verify that you don’t have any overrides entered in Forms View.
  1. Check the out of balance amount. Check if the item is included, doubled, or excluded from the Schedule L.
  2. Check that the total assets and total liabilities are correct.
  3. Check for incorrect lines on Schedule L.
  4. If retained earnings still aren't correct, check for incorrect lines on the M-1 or M-2.

This article applies to:

  • Product: UltraTax CS
  • Return type: 1120 Corporation
  • Subject: balance-sheet-m1-m3

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