No subject

re managing an ongoing activity in which you have to make distributions to =
recipients (beneficiaries) on a regular basis, because funds are owed them.=
  You also mention an income/expense activity which suggests either a busin=
ess or a liquidation of assets of an estate.

What is unknown is the basis/reason dictating why you are distributing asse=
ts on a monthly basis.  The reply to your question is an accounting one.  B=
ut that accounting question activity is shaped by what dictates what you ar=
e doing.  In my experience if it is an estate that is being disbursed, that=
 usually is not done until all liabilities to non-beneficiaries have been d=
etermined in amount and paid to those claimants.  What is left after paying=
 creditors are net assets, of which the beneficiaries are the owners.  In t=
hat arrangement,  your notion of debiting equity and crediting cash works. =
 What is unknown to this list (and therefore suggests a note of risk) is wh=
y you distribute before the funds are on hand (you say they are dependent u=
pon income, which always is problematical in advance of receipt).

If you are administering a trust, then the terms of the trust must be speci=
fied in order to know what you are supposed to do when.  If income is comin=
g in from the trust's activities, then it suggests that in the short run th=
e trust is an ongoing activity and the amounts owed  beneficiaries are real=
ly liabilities of the trust.  If that is the reality, then you would have l=
iabilities offsetting trust assets.

If you supply a clear statement of your situation, it will be easier to det=
ermine the proper way to record the transactions you describe.

HTH,

Tom Bullock
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Date: Wed, 13 Oct 2010 08:53:13 +0800

From: "Alex Hill" <alex_hill at arach.net.au<mailto:alex_hill at arach.net.au>>

Subject: Trust Distributions

To: <gnucash-user at gnucash.org<mailto:gnucash-user at gnucash.org>>

Message-ID: <4FEAACFA00154A3FAB1544ED20FC1CA2 at ToshibaLaptop>

Content-Type: text/plain;     charset=3D"iso-8859-1"



I sent this last night but I didnt see it come through the mailing list, so=
 my apologies is people receive it a second time.



This is more of an accounting Question then a specific GnuCash question, bu=
t could do with some info on how to structure it in GnuCash anyway.



I have a trust and am making monthly distributions to beneficiaries. Would =
I be right in doing the following:



Equity (Beneficiary 1)        Dr       x

Equity (Beneficiary 2)        Dr       y

Cash                                Cr                 x+y



(or seperate transactions for each distribution).



So in this this situation the equity accounts with have a Dr balance (shown=
 as a negative in gnucash) during the year. Then at the end of the year I w=
ould offset these accounts against the P&L Summary when closing the books l=
ike so:



P&L Summary (temporary account used in closure)      Dr       x + y

Equity (Beneficiary 1)                                                 Cr  =
                   x

Equity (Beneficiary 2)                                                 Cr  =
                   y



Then any residual in the P&L summary account would be distributed in a simi=
lar fashion?



I think this is right, but am not quite sure.



Thanks,

Alex