S-Corp Distributions and GNUCash

[Tom Peterson]

I have an 'Expense:Shareholder Distribution' account so when I 
distribute retained earnings I have a transaction involving the bank 
account and the Expense:Shareholder Distribution account.

On 11/24/2010 08:53 PM, Christopher Blunck wrote:
> Hi Anthony-
>
> Thanks for the quick response.
>
> There are 2 sets of books here - one for me (personally) and one for my company.
>
> I realize I can create an Equity:Retained Earnings account but it is pretty confusing when you look at the Balance Sheet report to see Equity:Retained Earnings as well as "Retained Earnings" (in bold) down below.  I can change the Equity:Retained Earnings to Equity:Distributions and that would make it probably make it more clear.  I guess at that point the only thing that gives me concern is that the value of Equity:Distributions has a negative value and how can a balance sheet show negative values?  That doesn't seem to make sense to me ... but then again IANAA.
>
> Your thoughts?
>
>
> -c
>
> On Nov 24, 2010, at 9:41 PM, Anthony Dardis wrote:
>
>    
>> (a) you can create a Retained Earnings account
>>
>> (b) are there two sets of books involved here, one for the S-corp, one for you? The distribution from checking for the S-corp should (?) reduce equity for the S-corp; but then you are receiving the distribution, so that comes in to *your* books as (I'm guessing) income (so for you, a transaction from income to whereever the money actually ends up)?
>>
>>
>>
>>
>> On Wed, 24 Nov 2010 21:34:23 -0500, Christopher Blunck<chris at thebluncks.com>  wrote:
>>
>>      
>>> Hello-
>>>
>>> I was wondering how to handle distributions from an S-Corp to owners in GNUCash.
>>>
>>>  From an accounting standpoint a distribution from an S-Corp is usually handled by:
>>>   1.)  Decreasing  Assets:Checking Account  by some amount
>>>   2.)  Decreasing  Equity:Retained Earnings by the same amount
>>>
>>> Since GNUCash doesn't have an explicit "Retained Earnings" account I don't know how to journal this transaction.
>>>
>>> I created an Equity:Distributions account but then the Balance Sheet shows a negative value for Equity:Distributions and that "doesn't smell right."
>>>
>>> Can someone enlighten me on how to best approach this situation in GNUCash?  If I'm misunderstanding the accounting please feel free to correct me.  And if there is a "GNUCash way to do this" that I simply don't understand please share!  :)
>>>
>>>
>>> Thank you for your time,
>>>
>>> -c
>>>
>>> --
>>> Christopher Blunck
>>> chris at thebluncks.com
>>>
>>>
>>>
>>>
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