 QuickBooks Online 2024, pay employees, get ready and some coffee because we're sketching out the bookkeeping process outline with QuickBooks Online 2024. First, a word from our sponsor. Yeah, actually we're sponsoring ourselves on this one because apparently the merchandisers, they don't want to be seen with us. But that's okay whatever because our merchandise is better than their stupid stuff anyways. Like our CPA six-pack shirts, I must have for any pool or beach time mixing money with muscle, always sure to attract attention. Even if you're not a CPA you need this shirt so you can like pull in that iconic CPA six-pack stomach muscle vibe man. You know, that CPA six-pack everyone envisions in their mind when they think CPA. Yeah, as a CPA I actually and unusually don't have tremendous abs. However, I was blessed with a whole lot of belly hair. Yeah, allowing me to sculpt the hair into a nice CPA six-pack like shape, which is highly attractive. Yeah, maybe the shirt will help you generate some belly hair too. And if it does, make sure to let me know. Maybe I'll try wearing it on my head. And yes, I know six-pack isn't spelled right, but three letters is more efficient than four. So I trimmed it down a bit, okay? It's an improvement. If you would like a commercial free experience, consider subscribing to our website at accountinginstruction.com or accountinginstruction.thinkific.com. Here we are in our Get Great Guitars 2024 QuickBooks Online Sample Company file. We set up in a prior presentation opening up the major financial statement reports like we do every time. The reports on the left hand side in the favorites. We're going to be right clicking on the balance sheet to open link in a new tab. Same with the profit and loss, right click, open link in a new tab. One more time, ultra vase again, right click, open link in a new tab. If you don't have that trial balance in the favorites, you can search for it up top. We're going to tab to the right, close up the hamburger, and then do a range change going from 010124 tab, 013124 tab, and then we will run and then we'll tab to the right, closing the hamburger and scrolling up and doing a range change again. 010124 tab, 013124 tab, and then we will run again and then we'll tab to the right and close up the hamburger and do another range change. 010124 tab, 013124, and then we'll refresh, refreshing. Alright, let's go back to the balance sheet here and now we're going to be thinking about processing the payroll. Remembering that payroll is a whole issue in and of itself and every time I touch on payroll, I just want to remind ourselves that there's multiple different options for payroll and typically it's going to cost more no matter what option that you choose. You could try to run payroll by the way just like in Excel spreadsheets and not purchase or have an upsell of payroll in some way, shape, or form, but I do not recommend that even if you only have a few employees because just the bookkeeping for payroll is complicated and then when you put on top of that the reporting requirements to make sure that you're in compliance, that's complicated and also there could be like human resources stuff that's kind of tied to the employees as well which all adds a level of complication, noting that no one thing is complicated as payroll. You might think well you have social security is easy to calculate, Medicare is easy to calculate, so it's all easy to do but when you put them all together then it becomes complicated because now you've just got a whole bunch of stuff that you've got to keep track of and you can tell it's complicated because if you look at all the massive number of reports that are going to be payroll reports that you have to use to then populate your 941s, your 940, your W2s, and your W3 and have all the paystubs and stuff, it's a lot pretty detailed amount of the report. So what are your options with payroll? You could upsell on payroll, mean you purchase payroll within QuickBooks so that you can process it in QuickBooks, QuickBooks providing you some help and some support to get the calculations right and then process the forms 941s, 940, and the W2s and W3s and so on. Or you could have a third-party payroll provider that does all that stuff externally and that could be a useful system because you might even be able to remain on a cash-based system within QuickBooks, let them do all the payroll processing and just process the paychecks as they come through the QuickBooks system and then do periodic adjustments at the end of the year working with yourself as the bookkeeper, the payroll provider to do the payroll and human resources possibly, and then your CPA, tax preparer, or accountant to do the period-end adjustments with the help and use of the payroll forms from the payroll provider so that we can just do adjustments to make the financial statements right at the end of the year would be a general idea that might work. Okay, so note also with the payroll, if I select the dropdown here that payroll is only complicated because of laws and regulations around it. Note that payroll should be basically just like paying another vendor, meaning if you didn't have all the laws and regulations with withholdings like in the United States then it would just be you'd shake hands with your payroll provider, you'd say, well, what did we agree on and then I'll pay you at the end of the week and then you just pay him at the end of the week with an expense form, it'd be easy. But we have a lot of laws and regulations in part where the government wants to make the employer the collection agency for the taxes. So that means that we have now been made into the tax collection arm for our employees and we have to record the withholdings. Also note that with payroll, it's a law and therefore the laws will change from location to location. So if you're in another country, the accounting system, double entry accounting system, that's universal, that's like math, it's the same, just has different currency. But laws will change and with bookkeeping the major impact on bookkeeping by laws are the taxes. There's no new tax under the sun, it's just a combination of taxes. They're just taking what things that people have come up with with different tax and they're just applying a different combination of them. So you just got to figure out what the taxes are and how to apply it. The United States has a pretty complex payroll tax system combined with the income tax system. And so that's why it gets a little bit messy because we have federal income tax, social security and Medicare for two kinds of taxes on the federal side and then on the state side you could also have state taxes and withholdings depending on the location on the state which will differ from state to state. So quick recap down here, this is the flow chart from the desktop version but we're using it for the online just to remember the forms and the processes that happen. So we set up payroll before and now once it's set up we can just do the normal cycle. We're going to run the cycle around whatever cycle we set up meaning weekly, bi-weekly, semi-monthly or monthly. We set ours up to be monthly. We might have to enter time however the time entry here in QuickBooks isn't always just used to process payroll because you might enter time on a job cost system to bill the clients or invoice the clients based on time such as done in a law firm or CPA firm. People do work at give you the time sheet, you bill or invoice the client based on it. But if they're hourly workers you could use the time entry to then process the payroll or you can just have them fill out some other time thing whatever you want to do if you want to do an Excel worksheet or whatever other software but if they're hourly workers you will need the time to process the payroll. Now we're at the step where we're going to process the payroll. We set up the payroll, we have the information, now we're going to process the payroll which will be done weekly, semi-weekly or bi-weekly and or monthly. For us monthly when we process the payroll we will generate the paychecks or more likely electronic transfer checks these days, direct deposit type of checks. But when that happens it becomes more complicated because there will also be withholdings involved in it meaning they will earn so much money, the expenses and then we will take their own money from them like they're a baby and pay their expenses for them because the government forces us to treat them that way and I think it's demeaning myself they can pay their own taxes I don't need to take it out of their check before they get it but that's the government for you that's how they do things these days. And then you have our side of it as too for the employer portion of the payroll taxes and then later we'll have to pay the liabilities that we withheld on their behalf and our taxes and we're going to have to then process the payroll forms which is typically quarterly 941 forms, yearly 940 forms, the W-2s, the W-3s and so on. So we're on the processing of the payroll step at this point. So let's go back to the first tab. Now we set up the payroll over here just for the practice problem. We have a whole nother course on payroll, course or section on payroll that goes into it a little bit more detail if you want to get into the details of it we'll just give the general idea of it here. So we have in the overview we've got the pay my team under the employees section and we can also run payroll within here. It might be a little bit easier to do it within here because you can see our two employees we set up the two employees and now let's go ahead and run the payroll as of 131 it says. So notice the pay periods. This is one of the difficult things about payroll to do a practice problem with because it has to run real time basically. So you only have so many payroll periods when you set up the company file and you kind of have to process it real time. But the payroll is drastically different from the first quarter to the last quarter in part two the caps and stuff that are on the payroll such as social security has a cap and same with federal unemployment tax. So just something to keep aware of. But we're going to process it as of 131-24. Add employees know it gives us the summary here which will be great if we have all the information in there to process it. But I'm going to go into each one of these we're going to have to make a slight adjustment to them to tie into our worksheet and I just want to show you what is happening with the payroll. So if everything was set up and everyone then it would process perfectly from here you can just double check it here and preview the payroll and then process it. But I'm going to edit each of these. So let's go in and go to do edit paycheck so we can see the detail of what is happening. Now let me go into an Excel worksheet just to see it in Excel. If you had an external payroll provider do your payroll like an ADP or paychecks they would provide you a much more detailed form but would look somewhat like this. This would be like a payroll register. So now we're going to say Adam Hamilton and Erica. So let's say Adam we said that they had 55,000 yearly salary. We're going to pay him monthly so divided by 12 and that comes out to 458-333. And then the social security is basically a flat tax meaning it's going to take whatever the total earnings are and multiply at times a flat rate which is easy to do. The flat tax is nice and easy and obviously as people earn more money the tax goes up. That's a little bit different than the income tax which is a progressive tax which means it goes up even more because the tax rate actually goes up as income goes up. However it's not a perfect flat tax because there's a cap on it. If you go up above a certain amount you no longer pay the tax so it gets messy there and that's why if you don't catch that it'll cause a problem because if someone earns a high amount of income they no longer pay taxes after a certain point. You might say that's not fair, that's weird, it looks like a benefit to the rich. But notice what is happening here. Social security these days has become more of a statewide or federal retirement plan instead of like a safety net. So instead of having social security only for those who were not able to save for retirement on their own it's become something that is like part of retirement for everyone. So if you think about it like that and what happens is when you get paid out at retirement then it's based on how much you earn. So the payments actually go down as you earn more money but as you go past a certain dollar amount then you don't get any more benefit for the money going back to you at the end. So it's kind of a messy situation with the social security because it used to be thought of as a safety net and now it's thought of as like a retirement plan and if it was a retirement plan you would think that you would get the money back that you put into it and so in any case I'm not trying to argue one way or the other. It's just that's the way it is right now. Social security is a mess. Don't depend on it yourself because there's nothing in it right now in the bank account. What's going into it right now is paying the current generation's taxes looks like kind of like a Ponzi scheme at this point because as the population changes then you would think there might not be enough to pay. They're going to have to reformat you would think social security at some point but whatever that's how it is. Medicare this one is thought of more as a safety net program and you can tell by the rate which is 1.45% of but it's more of a flat tax. It's not a perfect flat tax because if you go over a certain amount you might have to pay you know there might be an added amount or whatever but that one looks more like a safety net kind of a system that people would only have it if they need it right in retirement and therefore the taxes you know smaller so then if we add those together then oh this is the income tax now this is the federal income tax not ours as the business owner but that of the employee so Adam needs to pay his own taxes but the government thinks he's a baby so we can't give him the money and and rely on him to pay the taxes we have to take it out for him it's not an option it's not like we're doing Adam a favor we're required to do so I'd be okay with it if Adam was like if we can if we can do Adam a favor by it but it's a mandatory which makes it kind of I don't like that personally but whatever that's how it is so this one we have to get the information from the W-4 now I just made up a number here this is the more most complex one because the income tax is very difficult it's not a flat tax to calculate it's based on a whole bunch of different things your filing status you know in your dependence and so on so that means the net pay is going to be this so here's going to be his total earnings and then we have to pay we have to take we have to take out his social security Medicare and income for him and then the net pay then that he's going to get is going to be the three five seven two seventy and this is going to be the liability that we'll have to pay it a future time then on top of that we're going to have to pay social security and Medicare on our portion on top so this is our portion of social security and Medicare our tax our payroll tax and this is not based on our income it's based on our employees income so so that it's kind of a matching kind of concept so it's the same amount here and here and then Erica we're going to say earns two thousand four hundred I'm not sure exactly and that was but we're going to take out social security same concept we'll we'll we will take six point two percent of that and then the Medicare we're going to take point of one four five of that and then we just made up the income tax we're imagining it was three sixty because that's what she told us on the W four which hopefully we could have emailed to her our employees and then they and then we're less liable you know they fill it out themselves right which is nice and then we're going to say two thousand four hundred minus the social security Medicare and income tax this is the net check that she will get she earned that but we're not going to give her that because we have to we have to do take out her taxes for her not because she requested us to do so which then I would be fine to do as a favor but because it's mandatory and so it's a compulsory thing and then we also have to pay our employer portion on top of that now you can think of our employees as one whole like one employee so if I was to enter this in not using QuickBooks payroll but rather someone else eight ADP or paychecks did it for example then we could enter it in our system as just a journal entry if we wanted to do that although we got to make sure that we still reconcile the checking account alright so that's the general idea so I'm just going to adjust now the taxes over here to coincide with our worksheet because I because I because I have to do that so here's the salary so here it is here that's how much Adam earned and then we're not going to have any overtime so this is going to be the total earnings and then these are the employee taxes so the taxes that are coming out of or in theory paid by the employee so we have the federal income tax so we're going to say I need to change this I'm going to say it's going to be 660.01 why did I need to change that because we didn't put anything in the W-4 form and it based that number on the W-4 form and so we're not going to get into the detail of the W-4 form it's not a flat tax we cannot change these two notice it doesn't even let you social security and Medicare because those are based on the rate and basically you know it is what it is so and then we've got the California tax I'm going to say it's zero because I don't want to make it a state based tax right here I'm ignoring the state's taxes state taxes will change from place to place I'm trying to make it a generic problem and then it puts $50 and I can't get rid of the state disability which is annoying because that's the state tax so let's actually change this one I'm going to change the federal income tax to 609.59 and so then I'll get to the same net check I'm trying to get a net check that ties out to what I have in when we do the bank that means is what I'm doing here so that means that the total here if we were to add those up we're at 1010 okay I think that works and then the employer taxes we have the federal unemployment that's the FUTA tax now again I didn't think it was going to put the FUTA I wish I could remove that for our practice purposes because that's usually going to be a lower tax that I didn't really want to deal with that I haven't put into my worksheet but then we have the social security on our side and then the Medicare so this is an employer only tax the FUTA tax it phases out usually after like the first quarter because there's a low cap on it okay so we will deal with that I think we'll be okay alright so if I look at this then that means I'll minimize this so we have then the check the total earnings is 4583.33 minus what we're going to take out of the employee's wages which totals out to minus 1010.64 that comes out to 357.69 and I wanted it to come out to 357.270 so it's off by rounding it's just a rounding difference so what if I this needs to be this needs to be that's fine okay I'm okay with that my bank reconciliation will be a penny off on that check but that's okay I'm okay with that I'm okay with that let's save it and let's see let's check out Erica's so let's go into Erica's let's see if I can well we can put the hours in here which I'm going to say is 150 let's put them here 150 hours so that comes out to our 2400 and let's edit Erica's paycheck now now Erica only works like sometimes because she's a mother and what she's taking care of so you know we got indicates so we got the regular pay here and then we've got the overtime pay okay so 2400 that is good and then down here we've got the federal income tax we're going to say so it's going to be I'm going to make it 360 so I have to change that to 360 .01 is what we had and then but there's still a state disability so let's do it this way let's pull out the trusty calculator and I'm going to make it 360.01 minus the 26.4 gives us the 33.61 okay and then we've got the social security which is this times 6.5% and the Medicare which is a flat tax and then we've got the California tax I'm going to remove it that would be the state tax also coming from basically the W-4 and then we have the 26 so we have this amount at then the 543.60 I have 60 and I have 61 over here so it's off by a penny again but the net check would be 2400 minus the 33 3.61 minus the 148.8 minus 24.8 minus 26.4 would be 185639 and again it's a penny off I have 40 I'm okay with that my paychecks are going to be off by a penny I'll deal with that in the bank reconciliation I won't struggle with it here anymore and then down here we've got the employer portion FUTA federal unemployment tax same thing social security matching notice the FUTA is an employer only tax that's not paid by the employee at all social security Medicare and those tie out to what I had over here so that we should be okay with that alright let's save it save it I think we're okay I think we can process it now payroll is something that you want to typically get right the first time and not have a tinkering system because if you have to fix payroll you basically have to void the check typically you can't just change the check like we saw before if like if your expense form was off or something sometimes you can change the expense form although you want to be careful with that too but payroll is messier so it's usually better to check twice a major twice and cut once preview the payroll here is our preview total 777 that's the total does that match what I have over here I see what they did they took all plus the liability but this this is the gross pay and the employee and the employer taxes which I'm going to have to possibly make a little bit of an adjustment to because of those state taxes okay but that's we can do that and then the funding account is going to be here we're going to just take it out of the checking account a lot of times people make a separate payroll account because that way you get to see all the payroll detail in one place to do that though what you would need to do is see how much you need to transfer to the payroll account and then transfer this amount into the payroll account and then pay your payroll out of the payroll account so you're using a checking account like a clearing account and you might say well that's an added step why would I do that well because payroll is complicated and it's easier if you run into a problem to have all your checks just going in and out of one account that makes it a little bit simpler more simple than trying to look through all the register information from a from a bunch of accounts and it's pretty easy to do these days given the fact that we have online banking and whatnot but in any case here's the date we're going to say that's good so preview payroll details let's take a look at that so you've got a kind of register that we've similar to the register we had here right so now we've got the salary hours the amount the employee taxes federal social security medicare the debt for Erica to and then the net pay and the totals notice how we can we can kind of combine the two people together in some ways again to see like the total as if they're one employee we might talk about that more in a second but there's that okay how I'm okay with that how do I get out of here just excited here I believe so we'll just close that out and then submit we can we can submit or save for later I'm going to do it now I feel it's risky I'm going to do it though okay so then we need our check numbers I think we're on one oh one two well let's let it do an auto fill I'll let it do the auto fill well I'll go one oh one two and then one oh one three I think those are the two checks yeah okay so download payroll reports so run payroll payroll is done two checks print the stubs let's check out the stubs and so these are the pay stubs note that although you do this electronically oftentimes you still need to give the pay stubs you're probably familiar with the look of the pay stubs that gives you both the current period as well as the year to date they're the same right now because it's the first payroll but they will not always be the same and that adds a significant level of detail to the information we have to give because we have to see the accumulated earnings here as well so you can see down here we've got the social security the California tax the Medicare and the federal income tax that was taken out here's the total pay here's the taxes and there's the net pay for both of the employees okay that's good so we're gonna say that's done then so let's go ahead and say close it take payroll off the list auto payroll is included at no extra cost with your QuickBooks payroll plan so you can stay in control so select which eligible employees you want to pay automatically so you could possibly set up the payroll because it's a reoccurring thing to be automatic which would be great but we'll not get into it right now so I'm not gonna do the auto setup we're gonna say close that we'll deal with that later and then let's go into our register let's go into the transactions and then let's go into our checking account and check out the check register close up the handbookie and so there's our two checks notice their paychecks now so you can see they're specially indicated as paychecks if I go into them and edit them then it's gonna go into a separate different window than we're used to from a normal check let's go back let's go to the reports see what's impacted here run the report so what happened well you would think the first thing that would come to mind is the checking account went down of course going to the checking account it went down by our paychecks it's indicating a new check it's just the same as a normal check except like the bill check it's now a payroll check so there it is the 3572 and so on if I go into it and drill down to the source document it won't even let me drill down to the source document so we can do that on the register but the paychecks have a different thing to it a different more complicated form and if you needed to change it again you'd have to avoid the check generally so let's go back now the other side if I compare this by the way to my register right so that the net check is what we just saw and those two and then if I go to my profit and loss we can see that we have the wages here so if I go into the wages and we have our two wages this is the gross pay so this is going to be more than this is what they earned this is what they got the difference is what we withheld from them and so if I go back where would that difference be it's back on the balance sheet and it's a liability account so we have a liability account for the sales tax so here we've got the California tax that we owe to the California because we had to do that and then the federal taxes that we owe to the government this will include both the employee and employer portion the amount that we took from the employees that we have to pay on their behalf to the government as well as our portion so if I go back to the profit and loss this in this area this is our portion the 813 that we matched with the social security and now because the state taxes kind of threw us off there we have a bit of a difference in the taxes so let me check this out where did that go now note I'm on the income statement these state the state taxes we didn't want the state taxes over here because I wanted to make this a generic problem but I couldn't get rid of the state taxes because I said it was in California and I also wanted to remove the federal income tax for our practice problem purposes so what I'm going to do a journal entry just so we can tie this out and match it to what is in our practice problem worksheets everything works going forward due to that California and the federal unemployment that I couldn't remove so I'm just going to go over here and say okay this 813.56 should be I'm going to say it should be 474.23 according to our worksheet because of those items we have a difference of 339.33 I'm going to make a journal entry that will be I'm going to make a sub account so we can see what the system came to and then our adjustment to adjust for those California and Futa components so I'm going to go back on over here and then also I need to adjust for this California tax here by again making another account which will be a subordinate to the payroll liability so I'll show you how to do that here this is just for our practice problem purposes let's select the drop down and I'm going to say that I'm just going to do a journal entry so I want to say drop down we just want a normal journal entry let's see actually that's the wrong drop down sorry about that I'm over here the new I was like where's the journal entry journal entry okay so now I'm going to make this as of 0131 to 4 and I'm going to say that that the what did we call it I'm going to call it a payroll payroll payroll tax ADJ I'll just say I'm going to add it it's going to be an expense type of account I'll just call it another or other miscellaneous payroll tax it's going to be a sub account I'm going to make of the payroll of the payroll tax so I'm going to put it a sub account of the tax account there it is and then I'll make that is going to be a credit of 339.33 and then I'm going to make another one which is going to be payroll liability adjustment account and this is going to be an other current liability what did I do other current liability and this is going to be other current liability payroll adjustment and I'm going to make it a sub account of the payroll liabilities so I can see this adjustment which is just for internal use purposes so I'm going to save that and it will be a debit so I think that works so this is I apologize for having to do this but this is just our work around to deal with the widget payroll that we use so that we can then tie in to the numbers we've already pre-composed so that we can tie out to the bank reconciliation alright let's save and close that and I'll see we'll check that out we're going to go into our balance sheet and then if I run this run it again we can see now we've got so we kept everything here that was there before and then I reduced it by the 33931 to get to the 202 the 201 which is what I have in my worksheet well actually it's 202848 so it's actually still off by a couple of pennies but I'm okay with that and then on the profit and loss we're going to if I run that again we can scroll down and we can say here is our payroll taxes that's what it calculated because it included the California and the federal unemployment tax and then I brought it down to here to tie in to what we have in our worksheet okay okay so note also that you're going to have payroll tax forms now which will tie out to this information so if I tab to the right right click and duplicate another tab then I can open up our payroll tax forms on the left hand side under reports and then close up and then we can scroll down and we can look at all the payroll forms they're towards the bottom so you've got the employee forms which is the recent added the time activities but if I scroll down to here then you have payroll which is a whole other area so you've got all these forms contractor payments employee detail employee directory FFCRA CARES Act because that's another thing that could have impacts on the payroll multiple worksheets paycheck history payroll billing summary summary payroll deductions calculations payroll detail payroll items the payroll summary by employee and the payroll summary so let's take a look at the summary by employee right click and open that one and I'm looking for one I like to see one that looks kind of like our register over here that gives us the information some of these will have duplicate information that's basically formatted in a different fashion but here's going to be the summary that was broken out so you've got the total hours the regular pay the salary here's the gross pay it looks somewhat like what would be reported on the paycheck we've got the regular the regular pay and then the salary and then the adjusted gross and then we have the employees taxes and deductions that were removed here are the employee taxes broken out the federal social security Medicare and then the state taxes and there is the net pay now this is the total now I like I like the format of this because now it shows you the two employees and then it combines them together so note this would be a report something like what you would get if you had an external person doing the payroll like an ADP or a paychecks then they would provide you with this report which you could enter into the system as though they were one big employee right instead of entering two employees I can enter it as one big journal entry not so I can process the payroll to give the information to the employees because the external provider would do that but rather just so I can get my financial statements correct or you can provide this report to the tax preparer at the end of the year and simply on our side possibly just record it on a cashed based system so that we just record the net checks as they come through and just record them to one account and then say okay CPA firm at the end of the year take this type of report and make our financial statements correct on whatever basis is necessary for tax preparation and external financial reporting see so you could see how much added detail is inside like if you did that if you if you had an external person doing the payroll reporting all this added detail you wouldn't really need in the financial statements because it's not really necessary to get the end result of the financial statements balance sheet income statement reported correctly it's there to coincide with all the requirements that are specific to payroll which is to have the paycheck stubs broken out year to date and paycheck by paycheck and to get the 941s to 940s W2s W3s all lined up and you know supported so you get all these other so again you have all these other reports that we saw here to deal with that and we have a whole another you know course or section to dive into more details on payroll this is just a very basic payroll with two employees and we didn't do a lot of stuff with different withholdings or state state items or anything like that as well and you can see on the balance sheet in the income statement when we drill down on these accounts it's getting quite cumbersome as well if I drill down on any of these accounts you're starting to get a lot of detail within these accounts because it's trying to break out all the different types of taxes instead of what you really need to report for external reporting which is just like this payroll tax liability you know it would just be that's all you really need on the financial statements to do your taxes or for external reporting but to get all the details right of course if you're processing within QuickBooks you need all that added detail to coincide with all the other regulations with regards to payroll alright so I hope I got that in there well and correctly let's go to the trial balance now and just see where we stand at this point I removed the trial balance did I remove the trial no here it is let's run the trial balance this is the balance sheet on top of the income statement if your numbers tie out to these numbers great if they don't try changing the date it might be a date range issue and then you can check it out then we got the balance sheet on top of the income statement starting with the assets checking accounts and asset accounts receivables asset inventories and asset investments and asset payments to deposit is an asset accumulated depreciation contra asset connected to the property plants and equipment or furniture and fixture the prepaid insurance is an asset then we have the liabilities these who are who have claim to the assets it's kind of the other side of the coin accounts payable our vendors the bank visa the government in terms of sales tax and United States that state and local government claims and then the loan payable that's the bank and then we have the payroll taxes now these are claimed this is money that we owe to the government again for the payroll taxes and then we have our claim to the assets of the business in equity opening balance equity owners investment owners equity and then we have the income statement which is starting to get quite long but we can still scrunch down to just one number as part of the equity section so now we have our income which is four six eight seven seven plus five one eight oh minus three seven two four two minus the eight one three point five six plus this adjustment we made three three nine point three three minus six nine eight three point three three minus five hundred minus four one zero minus six hundred twenty does that match what's on the profit and loss it should it's going to be five eight seven two forty four it does and then if we scrunch that number plus what's in the owner's equity plus seven seven eight nine six we get to eight three seven twenty three which is if I go one day up go to the twenty fifth zero one two five then it'll roll into equity so eight three seven twenty three forty four there we have it