Ask Experts Questions for FREE Help!
 
Free Answers in 3 Easy Steps

Register Now		 3 Steps
 
Ask QuestionsprogressAnswer QuestionsprogressBuild ReputationprogressBecome an Expert
 
At Ask Me Help Desk you can ask questions in any topic and have them answered for free by our experts. To ask questions or participate in answering them you must register for a free account. By registering you will be able to:
  • Get free answers from experts in any of our 300+ topics.
  • Accept money for answers that you provide.
  • Communicate privately with other members (PM).
  • See fewer ads.
  Answer this Question    Ask about Accounting    Ask about another Subject  
 
PDA

hcaston
Mar 21, 2007, 07:24 AM
Can you please tell me the proper way to account for a distribution to owners of an LLC?
The distribution is based on a % of revenue and also a flat rate. Is the JE to dr the partnersip account and cr cash?

Thanks,
Henry L. Caston Jr.
CaptainForest
Mar 21, 2007, 03:14 PM
You would Debit some form of a retained earnings account and credit cash.

Paying a disbursement to owner’s of a LLC is a form of dividend.

If the partnership account is an off setting account to retained earnings, then go for it.

IF these partner’s work in the business and this is some form of salary, then it could perhaps be charged to salaries expense.

But if it is just being given to them because they are owner’s, that is a dividend. And dividend’s do not touch the income statement, but rather the balance sheet and should come out of Shareholder’s Equity.