Starting A Set of Books
It is oftenwondered what information isneeded to start a set of books for an existing company that has recently incorporated from a sole proprietorship.
In order to start a set of books for an existing company that has recently incorporated from a sole proprietorship, you would need the balance sheet from the last date of business for the sole proprietorship as these ending balance figures will become your starting balances for the now incorporated company.
Then you would do one big journal entry to record the ending balances of the sole proprietorship as the beginning balances of the corporation on that start date. All of the balances are typically journal entried through the Opening Balance Equity account.
This applies to a single member LLC as well. In addition to the opening balances you may add up to $5,000 in busines start-up costs as an additional expense even if paid in a previous year.