S-Corp Distributions and GNUCash

Christopher Blunck chris at thebluncks.com
Thu Nov 25 17:15:54 EST 2010


The trouble with using an Expense account for shareholder distributions is that your Income Statement show the distributions as an expense (which they are not).  You could modify the stock Income Statement report so that it excludes the Expenses:Shareholder Distribution account but that's a manual step you might forget to do...


-c

On Nov 25, 2010, at 5:38 AM, Tom Peterson wrote:

> 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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