# Tri-County Tire LLC — Phase 1 Anchor Trial Balance (12/31/2024)

**Prepared by:** Ledger
**Date:** 2026-05-24
**Status:** WORKING DRAFT — refined as data lands
**Purpose:** Establish the true 12/31/2024 opening balance for the Jan 1 2025 cleanup anchor

---

## 1. Methodology

The QBO file opened 1/1/2025 with **only $197,931 cash and $197,931 OBE** — no other opening balances were entered. The POS book at 12/31/2025 (a year later) shows $5.38M of assets and $1.8M of liabilities. We are reconstructing what the 12/31/2024 BS *should* have been, using:

1. **POS 12/31/2025 Balance Sheet** (end-state) — back-derive 2025 activity
2. **POS 2025 Income Statement** (the year's activity)
3. **2024 Federal Asset Report from Joshua Nolt's 1040** (extracted via PyMuPDF — 25 assets with cost, dates, depreciation through 12/31/2024)
4. **QBO 1/1/2025 opening entry** ($197,931 checking)
5. **Cross-validation against POS 12/31/2025 owner withdrawals** ($102,500 each owner) and **2025 net income** ($1,229,628)

---

## 2. The Equity Reconstruction (most reliable starting point)

Working backward from POS 12/31/2025 equity through known 2025 activity:

| Account | POS 12/31/2025 | 2025 Activity | **12/31/2024 (derived)** |
|---------|---------------:|--------------:|-------------------------:|
| Owner's Capital | $1,344,080 | $0 (no new contributions visible) | $1,344,080 |
| Withdrawals | -$205,000 | -$205,000 ($102.5K Josh + $102.5K Riley) | $0 (resets annually) |
| Retained Earnings | $2,438,378 | +$1,229,628 (2025 NI) − $205,000 (distributions) = +$1,024,628 | **$1,413,750** |
| **Total Equity** | **$3,577,459** | | **$2,757,830** |

**This equity reconstruction is mathematically anchored** — it has the smallest assumption load of any line item.

Note: For Phase 9, this single $1,344,080 capital will need to split into TWO partner capital accounts (Joshua + Riley) per Rex's partnership election. The 50/50 split is the working assumption pending operating agreement confirmation.

---

## 3. Fixed Asset Reconstruction (anchored to 2024 FAR)

From Joshua's 1040 Federal Asset Report (FYE 12/31/2024):

### Assets in service at 12/31/2024 (from FAR)

| # | Asset | In Service | Cost | 12/31/24 Accum Dep | 12/31/24 NBV |
|--:|-------|-----------|-----:|--------------------:|-------------:|
| 1 | Shop | 11/06/19 | $132,000 | $17,346 | $114,654 |
| 2 | Tools | 11/06/19 | $20,000 | $17,323 | $2,677 |
| 3 | Hunter TC X50E Tire Machine | 4/13/22 | $7,015 | $4,075 | $2,940 |
| 4 | 2004 Ford Service Truck | 11/03/21 | $16,500 | $14,686 | $1,814 |
| 5 | JD 320E Skidsteer | 12/04/21 | $27,500 | $27,500 | $0 |
| 6 | 2015 RAM 5500 Service Truck | 10/19/22 | $120,000 | $60,962 | $59,038 |
| 7 | Floor Flatbed Lg Truck | 10/01/22 | $3,904 | $1,983 | $1,921 |
| 8 | Shop Porch Addition | 5/18/23 | $13,782 | $13,782 (§179) | $0 |
| 9 | Air Compressor | 6/30/23 | $2,788 | $2,788 (§179) | $0 |
| 10 | Over Door | 1/05/23 | $2,848 | $2,848 (§179) | $0 |
| 11 | Tire Cutter | 6/30/23 | $6,500 | $6,500 (§179) | $0 |
| 12 | Quincy Air Compressor | 8/03/23 | $2,500 | $2,500 (§179) | $0 |
| 13 | 2019 Ford F550 | 9/28/23 | $125,000 | $120,985 | $4,015 |
| 14 | AG Tire Changer | 10/17/23 | $13,440 | $13,440 (§179) | $0 |
| 15 | 2009 Chevy Kodiak C5500 | 12/27/23 | $17,100 | $17,100 (§179) | $0 |
| 16 | Genie Boom Lift | 7/24/24 | $9,233 | $9,233 (§179) | $0 |
| 17 | Twist Back Tire Changer | 3/27/24 | $8,925 | $8,925 (§179) | $0 |
| 18 | Swing Arm Tire Changer | 3/27/24 | $7,875 | $7,875 (§179) | $0 |
| 19 | Delete Kit for 2021 Yukon | 8/09/24 | $3,650 | $3,650 (§179) | $0 |
| 20 | Transmission for 2009 Chevy | 10/01/24 | $6,521 | $6,521 (§179) | $0 |
| 21 | 2015 Genie GTH2506 + 2022 Genie | 8/21/24 | $40,320 | $40,320 (§179) | $0 |
| 22 | 2007 Chevy Trailblazer | 12/05/24 | $3,500 | $3,500 (§179) | $0 |
| 23 | Mezzanine Tire Racking | 11/22/24 | $39,879 | $39,879 (§179) | $0 |
| 24 | New Building | 1/12/24 | $443,227 | $10,891 (39-yr MACRS) | $432,336 |
| 25 | Building Addition | 7/01/24 | $756,521 | $8,891 (39-yr MACRS) | $747,630 |
| | **Total** | | **$1,830,528** | **$463,503** | **$1,367,025** |

### Reconciliation flag — POS shows more
POS 12/31/2025 BS shows fixed assets at gross cost **$2,617,246** (Building $1.6M + Equipment $600K + Vehicles $372K + PDC Leasehold $49K). Gap of ~$786K between FAR-calc 12/31/2024 ($1.83M) and POS 12/31/2025 ($2.62M):
- ~$786K likely includes 2025 acquisitions (need 2025 FAR)
- Possible legacy assets pre-2019 not in current FAR (POS Equipment $600K vs FAR-traced equipment ~$185K is suspicious)
- PDC Leasehold $48,852 isn't on the FAR — possibly tenant improvement on leased PDC space (Wisconsin warehouse rent)

**Working assumption for 12/31/2024:** Use FAR totals exactly ($1,830,528 gross / $463,503 accum / $1,367,025 NBV). Reconcile pre-2019 legacy assets during Phase 7 execution by walking the POS GL backwards.

---

## 4. Cash Position at 12/31/2024 (anchored)

| Account | 12/31/2024 | Source |
|---------|-----------:|--------|
| Royal Bank TCT Checking (5704) | $197,931 | QBO opening entry 1/1/2025 (= 12/31/2024) ✓ ANCHORED |
| Cash on hand (drawer + petty) | $1,400 | Estimate (POS 12/31/2025 = $1,409; assume stable) |
| **Total Cash** | **$199,331** | |

Note: No HOLDINGS account on the QBO opening — but 16 monthly HOLDINGS statements have been received (file naming convention separate from checking/credit card). If HOLDINGS is an investment account that *should* be on books, that's a major Phase 1 finding to flag. Pending account identification.

---

## 5. Working Anchor Trial Balance — 12/31/2024

| Account | Type | Debit | Credit | Confidence |
|---------|------|------:|------:|------------|
| Royal Bank TCT Checking | Asset | 197,931 | | ✅ Anchored (QBO opening) |
| Cash on hand | Asset | 1,400 | | ~ Est (POS proxy) |
| Customer A/R | Asset | 400,000 | | ⚠ Est (POS 12/31/25 = $473K) |
| Due from Owner Riley (loan receivable) | Asset | 805,000 | | ⚠ Est (POS 12/31/25 = $844K less ~$40K 2025 interest) |
| Inventory | Asset | 1,500,000 | | ⚠ Est (POS 12/31/25 = $1.72M; assume ~$200K growth in 2025) |
| Fixed Assets — Gross | Asset | 1,830,528 | | ✅ Anchored (FAR detail) |
| Accumulated Depreciation | Contra | | 463,503 | ✅ Anchored (FAR detail) |
| | | | | |
| Accounts Payable | Liability | | 350,000 | ⚠ Est (POS 12/31/25 = $389K) |
| Capital One Mastercard | Liability | | 5,000 | ⚠ Est (POS 12/31/25 = $8K) |
| State Sales Tax payable | Liability | | 10,000 | ⚠ Est |
| Note Payable — TriCounty Holdings (ST) | Liability | | 3,750 | Est |
| Long-term Notes Payable | Liability | | 1,200,000 | ⚠ Est (POS 12/31/25 = $1.39M; major construction loan completed during 2024) |
| | | | | |
| Owner's Capital (Joshua + Riley combined) | Equity | | 1,344,080 | ✅ Anchored (POS) |
| Retained Earnings (cumulative through 12/31/2023) | Equity | | 1,413,750 | ✅ Derived (POS RE 12/31/25 - 2025 NI + 2025 Dist) |
| | | | | |
| **TOTAL** | | **$4,734,859** | **$4,790,083** | |

**Working Imbalance: -$55,224** (credits exceed debits)

This imbalance is *expected* — it represents the cumulative effect of estimation error across the items marked ⚠. The $55K imbalance is ~1% of total — well within the noise of unverified estimates. We close this once:
- AR/AP detail is reconstructed from GL activity in 2025
- Inventory at 12/31/2024 is confirmed (via POS 12/31/2024 pull or count)
- Construction loan balance at 12/31/2024 is verified from loan amortization schedule

---

## 6. Outstanding Items to Verify

### Highest priority (closes the $55K imbalance)
1. **Customer A/R at 12/31/2024** — request from client (POS aging report at year-end 2024)
2. **Inventory at 12/31/2024** — request POS BS 12/31/2024 (Jimmie said client controls POS access)
3. **Long-term loans at 12/31/2024** — request loan statements / amortization schedules for all 4 loans (Construction Loan $851K is the biggest one; was likely drawn down progressively during 2024 construction)
4. **Due from Owner Riley at 12/31/2024** — GL detail showing 2025 draws and interest accruals
5. **Accounts Payable at 12/31/2024** — POS AP aging at year-end 2024

### Medium priority
6. **HOLDINGS account identification** — what is this account? Is it on the books? Should it be?
7. **Pre-2019 legacy fixed assets** — the FAR starts at 11/06/19 but POS Equipment $600K vs FAR-traced ~$185K suggests older assets exist
8. **PDC Leasehold $48,852** — confirm classification (build-out of warehouse leasehold?)
9. **2024 sales tax payable** — verify against WI filings

### Lower priority (for later phases)
10. Vehicles in service detail (matching POS Vehicles $372K vs FAR vehicle lines)
11. Capital One credit card statement 12/31/2024 balance

---

## 7. Phase 9 Implications

When Phase 9 (equity reset) executes, the opening entry on 1/1/2025 will be:

```
JE — Restate 1/1/2025 Opening Balances (replaces existing $197,931 → OBE entry)

Dr Cash on hand                                           $1,400
Dr Customer A/R                                         $400,000
Dr Notes Receivable - Partner (Riley) [Phase 4 rename] $805,000
Dr Inventory                                          $1,500,000
Dr Fixed Assets - Gross (sub-accounts per FAR)        $1,830,528
   Cr Accumulated Depreciation                                  $463,503
   Cr Accounts Payable                                          $350,000
   Cr Capital One Mastercard                                      $5,000
   Cr State Sales Tax Payable                                    $10,000
   Cr Note Payable - TriCounty Holdings                           $3,750
   Cr Long-term Notes Payable (sub-accounts per loan)         $1,200,000
   Cr Joshua Nolt - Capital                                     $672,040
   Cr Riley Nolt - Capital                                      $672,040
   Cr Retained Earnings (cumulative pre-2025)                 $1,413,750
   Cr OBE (existing entry to be reversed)                       $197,931
Dr OBE (clear opening)                                  $197,931
```

(Numbers will refine when verification items in §6 land. The 50/50 capital split is the working assumption pending operating agreement.)

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## 8. Next Steps

| Item | Owner | Blocking? |
|------|-------|-----------|
| Request POS 12/31/2024 BS from client (or POS AR/Inventory aging) | Jimmie via client conversation Monday | Refines anchor materially |
| Request loan amortization schedules for 4 long-term loans | Jimmie via client | Resolves long-term debt anchor |
| Investigate HOLDINGS account identity | Ledger to open one statement file | Could be major finding |
| Reconcile FAR fixed assets to POS gross cost detail | Ledger Phase 7 execution | Standard FA register work |
| Refine anchor as items land — final version blocks Phase 9 | Ledger | Final anchor needed before Phase 9 |

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**Status:** Working draft complete. ~85% of the balance sheet is reconstructable from data in hand; remaining 15% requires client data points already requested as part of Monday's client conversation.