1120 Tally, Inc. Case Study Facts: Data Entry and Review

Tally Case Study Facts: Introduction

Using and Reviewing Bridge

Accessing the Bridge Software

If you have the tax application installed (1120), from within the return, select Access > Trial Balance.

Transferring the Trial Balance DIF File into the Bridge

The Bridge must be told the kind of source file which contains the trial balance information that you will be using.

Select File > Import. The Data Source Selection dialog appears.
Since you will be importing a DIF file and not one of the predefined general ledger or audit packages, under Data Source be sure User Defined is selected.
Click the New button. The User Defined Import Template dialog appears.

The Trial Balance radio button is already highlighted since that choice is the default.
Enter TRIAL1XX as the Template Name (no spaces are permitted in the template name field; XX is your initials).
Enter Tally Trial Balance XX (XX is your initials) as the description.

You may use any name and description that you prefer. However, the names chosen should be meaningful to you so that they can easily be found later for use with other returns, if needed.
Under Source File Format, Automatic Detection should be selected.
Enter the drive, path, and filename of your source file.

Or

Click Browse and then select the file from the Open dialog.

The drive/path field for this exercise’s DIF file is the drive/path for the bridge software (for example, C:\Program Files(x86)\RIA\RS2019 \TallyTB.DIF).
Click OK. The User Defined Import Template dialog appears.
Select the items to be imported under Import Item.
Highlight Account Number by clicking it once.
In the Mark Import Item area on the lower portion of the screen, highlight the column in the source file that the account numbers are in.
The column designator appears in the Column field next to the Import Item.
Repeat this process for Account Description, Tax Return Code, Prior Year Balance, and Current Year Balance.
Enter the row number of where you want the import to start from. Data on the row you select and all following rows will be imported.
Click the Save button. The Import dialog appears.
The new trial balance template that you created, Tally Trial Balance XX, appears in the Description field.
Highlight that template and click the Import button.

Or

Select the template name on the list. The Import Trial Balance dialog appears.
Enter the drive, path, and file name of your source file (for example, C:\Program Files(x86)\RIA\RS2019\TallyTB.DIF).

OR

Click Browse, then select the file from the Open dialog.
Under Import Items, select the items you want to import. Account number and Account Description are mandatory items and are preselected. Tax Return Code, Prior Year Balance, and Current Year Balance should also be selected.

For returns that have been completed by the software in prior years, you do not usually bridge prior year balances because they already exist in the tax return file.
Click the Import button. The Import Progress dialog appears along with the Import Trial Balance dialog box.
When the import process is complete, a confirmation message appears and indicates if errors were found. The message Import Complete, Errors found appears. Click OK.
The Trial Balance Import dialog appears again with the message Do you want to add this File and Format to the Auto Import List. Click the No button.

Reviewing Transfer Errors

Any entries that appear in the error list will be excluded from the import into Bridge. You should have no errors!

The Import Trial Balance dialog appears. Click Done.
The Import dialog appears. Click Done.
The Trial Balance appears with the imported accounts information.

Transferring the Tax Combination Code DIF File into the Bridge

The Bridge must be told the kind of source file which contains the tax combination code information.

Select File > Import. The Data Source Selection dialog appears.
Since you will be importing a DIF file and not one of the predefined general ledger or audit packages, be sure User Defined is selected under Data Source.
Click New. The User Defined Import Template dialog appears.
Select the Tax Combination Code radio button.
Enter TallyTCC as the Template Name (no spaces are permitted in the template name field).
Enter Tally TCC and your initials as the description. (For this lesson, put your initials in the description.)

You may use any name and description that you prefer. However, the names chosen should be meaningful to you so that they can easily be found later for use with other returns, if needed.
Under Source File Format, Automatic Detection should be selected.
Enter the drive, path, and filename of your source file.
OR
Click Browse and then select the file from the Open dialog.
The drive/path field for this exercise’s DIF file is the drive/path for the bridge software (for example, C:\Program Files(x86)\RIA\RS2019\TallyTCC.DIF).
Click OK. The User Defined Import Template dialog appears.
Select the items to be imported under Import Item.
Highlight TCC Description by clicking it once.
In the Mark Import Item area on the lower portion of the screen, highlight the column in the source file that the descriptions are entered in.
The column designator appears in the Column field next to the Import Item.
Repeat this process for Tax Return Code and TCC Number.
Enter the row number of where you want the import to start from. Start in row 3.
Click Save. The Import dialog appears.
The new tax combination code template that you created, Tally TCCXX, appears in the Description field.
Highlight that template and click the Import button.

OR

Select the template name on the list. The Import Tax Combination Code dialog appears.
Enter the drive, path, and file name of your source file (for example, C:\Program Files(x86)\RIA\RS2019\TallyTCC.DIF).

OR

Click Browse and then select the file from the Open dialog.
Under Import Items, all items will be preselected for you.
Click the Import button. The Import Progress dialog appears along with the Trial Balance dialog box.
When the import process is complete, a confirmation message displays and also indicates if errors were found. The message Import Complete, Errors found appears. You should not have any errors.
The Tax Combination Code Import dialog appears. Click Done.

Checking for In-Balance

Select Options > Calculate Now.
The Calculating Summary Totals dialog appears.
When all calculations are complete, select View > Tax Summary.
The Tax Summary screen identifies out-of-balance returns by showing any differences in Income, Balance Sheet, and Reconciliation of Equity items.

The Schedule M-2 is out of balance. To balance it, make an M-2 journal entry for the Cash Distributions.
Close the Tax Summary screen.

Journal Entries

Select Ledger > Journal Entries from the menu bar.
To enter the journal entry for Officers’ Compensation, select Tax reclassification as the type of journal entry.
Click New.
Enter OFFICERS’ COMPENSATION as the journal entry description.
Tab to the Journal Entry Grid.
Enter TAX41-210 in the Account field. The TRC for Officers’ Compensation is 41-210. You can use the word TAX followed by the TRC to create an account used only for tax return amounts.

Officers’ Compensation

Enter $ 1,775,000 in the Debit column.
Enter 1120 in the Account column.
Enter $ 1,775,000 in the Credit column on the next line.
The Description column is completed automatically by the system. Make all the rest of the journal entries shown in the facts.

Merging the Bridge Information

You have transferred data from a DIF file into the Bridge, reviewed the error process, posted journal entries and checked to ensure the data is in balance.

Select Options > Merge Now from the menu bar. This will combine data from the Bridge files with the tax return files.
Close the Bridge.

Using and Reviewing the Tax Application

After the last merge, you will have entered several descriptions to allow the whitepaper detail to print the same schedules as in the Master return. These descriptions either did not have a TCC number or did not require a TCC number.

Print and Default Options

Most options can be set for all returns in your account by your Administrator. You can review and change options on a return-by-return basis.

Select General Information > Return and Print Options.
Click each tab or select the appropriate folder to view the various processing options.

General Information

Select Company Information.
Review the pre-entered data and enter the date of incorporation with forward slashes.

Income and Deductions

Select Income and Deductions > Income.
Verify all income and deduction amounts.

The numbers to the left of the line description and those labeled as TRC are used by the Bridge software.

Cost of Goods Sold

Select COGS/COOPS.
Verify the beginning and ending inventory.

These amounts do not carry from the balance sheet.

The column to the left of the description area labeled TCC. That column is used for codes when consolidating. You will see similar field arrangements in other 1120 detail screens.
Verify the additional information for Schedule A on the lower portion of the screen. Tally, Inc. uses the lower of cost or market method of inventory valuation.

Balance Sheet

Select Balance Sheet/M1-M2 > Balance Sheet.
Verify all information.

Do not enter ending accumulated depreciation and ending unappropriated retained earnings. The system will compute these amounts using the beginning balance adjusted for current year activity based on the options you have selected.

Schedule M-1

The system will automatically compute the net income per books.

Case Study Facts/tally_data_entry.htm/TY2019

Last Modified: 03/19/2020

Last System Build: 06/17/2021