Five friends got together and formed a corporation..S corporation. Four of the members contributed cash and the remaining person contributed services for equal shares of stock in the company.
I understand that the "services contributed" can be capitalized and amortized over time. This is where my problem started. My projected balance sheets for the next few periods (let say 3 months) are not balanced because the Amortization is reducing the book value on the assets' side while the equity sides remained unchanged or perhaps even increasing due to the periodic additions of the Net Income to the Retain Earning. How do I solve this problem? Please help.
Pdepot
I understand that the "services contributed" can be capitalized and amortized over time. This is where my problem started. My projected balance sheets for the next few periods (let say 3 months) are not balanced because the Amortization is reducing the book value on the assets' side while the equity sides remained unchanged or perhaps even increasing due to the periodic additions of the Net Income to the Retain Earning. How do I solve this problem? Please help.
Pdepot
