Outside partnership expense transactions

[Michael Tsang]

On Sunday 17 February 2013 07:02:27 Hcorewisco wrote:
> Hey all,
> 
> I've been using gnucash for the past week to keep records for the band I'm
> in.  It's been fantastic....so much better than my primitive spreadsheet
> skills.  The band is set up as a registered LLC partnership, and we all
> take equal (1/4) shares in any profits/revenue/losses.
> 
> Because of this, I am unsure how to enter my own personal expenses
> (mileage, equipment, food, etc...) which don't use any band assets.

I'm not an accountant, but according to what I have learnt in university, you 
should:
1. Set up a book for the partnership;
2. Create an asset in your personal book referring to the partnership. The 
value should be adjusted to your share of partnership equity at the end of 
your personal accounting period.

> 
> *Example:*
> 
> We just used $275 of existing band cash to purchase an in-ear monitor
> system for the singer and guitar player.  The system will now belong to
> everyone in the band equally, and is easy enough to list as an expense. 
> However, if I buy a set of bass strings for $40, the band doesn't share
> that
> expense...it's 100% mine.  How would I enter that transaction into gnucash?
> We all have draw accounts, so maybe it has something to do with that?

1. Draw the money out of the business (e.g. $40).
In your personal book, debit cash (or bank account or etc), credit XXX 
partnership
In the partnership book, debit Mike, withdrawals, credit cash (or bank account 
or etc)

2. Use your own money to buy thing.
In your personal book, debit AV expense, credit cash (or bank account or etc)

> 
> Or, for anyone tax savvy, should my personal expenses relating to the band
> be something to leave out of the band gnucash file?
> 
> Should I keep a separate list of them to report on my K-1 instead of being
> calculated into form 1065 with the band?
> 
> I'm pretty gnu (see what I did there?...unoriginal, I know) to all of this.
> I've spent a lot of time lately just trying to soak up information about
> taxes and accounting so April 2014 goes more smoothly than this year.  Felt
> it was time to reach out, though.

I know nothing about tax so I can't help you.

> 
> Appreciatively,
> Mike