Too much cash


H

Harlan Lunsford

Hah. got your attention.

While replying to Mike's 1120S distribution/payroll thread,
I'm reminded of something coming up this next week when I
hopefully can get the corporation president in my office and
have a heart to heart talk with him.

He's sole shareholder and officer of a c corp, fiscal June
30th, now extended (as usual) to March 15th. Year's end I
make all the adjustments based on information submitted and
whatever's left over, debit or credit balance, appears in
the "Cash on Hand" account. It's usually a credit balance
and that's automatically added income. No problem.

Now then, inventory and accounts receivable are in line;
everything else is acounted for, but the money market
account has dropped precipitously and office manager's
figure for cash undepostied is about 1300$.

With EVERY other account correct, cash SHOULD BE about
72,000$ on hand, instead of the 1,300$! Hope I haven't lost
anybody at this point. So when I get with him I'll acquaint
him with these facts and ask him where's the money?

Here are some possibilities; anybody think of any others?

1. He took it out as undocumented dividends (or repayments
of stockholder loan to the corporation)

2. His office manager took it home with her

3. there's a bunch of undocumented under the table cash
payments for expenses (not unlikely, since a comparison of
income statements year after year show consistant results.

4. Somebody stole the money.

So if anybody has any other possibilities, let me hear them.
Also, any really REALLY diplomatic ways to talk about the
subject? (just kidding)

ChEAr$,
Harlan Lunsford, EA n LA
Fri, 29 Oct 2004 21:59:47
 
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L

Lynn Guini

Harlan Lunsford said:
Hah. got your attention.

While replying to Mike's 1120S distribution/payroll thread,
I'm reminded of something coming up this next week when I
hopefully can get the corporation president in my office and
have a heart to heart talk with him.

He's sole shareholder and officer of a c corp, fiscal June
30th, now extended (as usual) to March 15th. Year's end I
make all the adjustments based on information submitted and
whatever's left over, debit or credit balance, appears in
the "Cash on Hand" account. It's usually a credit balance
and that's automatically added income. No problem.

Now then, inventory and accounts receivable are in line;
everything else is acounted for, but the money market
account has dropped precipitously and office manager's
figure for cash undepostied is about 1300$.

With EVERY other account correct, cash SHOULD BE about
72,000$ on hand, instead of the 1,300$! Hope I haven't lost
anybody at this point. So when I get with him I'll acquaint
him with these facts and ask him where's the money?

Here are some possibilities; anybody think of any others?

1. He took it out as undocumented dividends (or repayments
of stockholder loan to the corporation)

2. His office manager took it home with her

3. there's a bunch of undocumented under the table cash
payments for expenses (not unlikely, since a comparison of
income statements year after year show consistant results.

4. Somebody stole the money.

So if anybody has any other possibilities, let me hear them.
Loss in investment account?
 
H

Hamlet the Prince

How about a loan from the corporation to the shareholder?
 
W

W.C. BILL

Harlan Lunsford said:
Hah. got your attention.

Now then, inventory and accounts receivable are in line;
everything else is acounted for, but the money market
account has dropped precipitously and office manager's
figure for cash undepostied is about 1300$.
Perhaps I'm not fully understanding the scenario, but I
would think that an accurate bank reconciliation of the
money market account would establish the veracity (or lack
thereof) of this account.

But something tells me it's not that simple? :)

~bill in tx
 
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H

Harlan Lunsford

Perhaps I'm not fully understanding the scenario, but I
would think that an accurate bank reconciliation of the
money market account would establish the veracity (or lack
thereof) of this account.

But something tells me it's not that simple? :)
Ah yes; not that simple indeed. Probably what I FORGOT to
mention is that this C corp and therefore the 100%
shareholder is in the used car business. (grin.

ChEAr$,
Harlan Lunsford, EA n LA
 

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