LLC over reimbursed corporation

USA Discussion in 'Businesses / Corporations' started by jmc0435, Jul 16, 2017.

  1. jmc0435


    Jul 16, 2017
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    I have two entities I am working on, one is an calendar year LLC and the other is a 4/30 year end c corporation. The same individual owns both. The LLC generates the revenue of the business and the corporation is the cost center (takes care of the overhead). The LLC pays a management fee to reimburse the corporation plus a 10% profit. The LLC paid the fee out shortly before the 12/31/16 yearend. However, it over reimbursed the corporation and paid significantly more than the 10% profit. So, the bookkeeper tried to correct this entry by paying the money back to the LLC early in 2017 (maybe 2-3 months in). The overpayment has been fixed for the 12/31 LLC year in QuickBooks with the creation of a receivable account from the corporation. The receivable being the amount of overpayment that was paid back in early 2017. Is this acceptable? Neither return has been filed yet.

    Also, when the bookkeeper tried to fix the overpayment, she didn't do it quite right, meaning instead of a 10% profit, its more like a 16% profit. Could this cause any issues? Any recommendations?
    jmc0435, Jul 16, 2017
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  2. jmc0435

    Drmdcpa VIP Member

    Aug 2, 2017
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    The correction could work. Just have to make sure the respective expense and income accts are adjusted.

    Since the returns have not been filed, it would be better to adjust the books on or before 12/31. Just change the date on the correction.
    Drmdcpa, Aug 3, 2017
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