USA S CORP - withdrawal

[scarrie0490]

I need help in deciding which accounts to use when an officer of a business wants to withdraw funds from the business bank account of an S CORPORATION. For example when a sole proprietor withdraws entry is made by debit to owners withdrawal acct and credit cash. but am stuck with the SCORP - entry should i use the retained earnings, equity or dividend accounts - we don't declare dividends in this company or should we? the following are some of the facts

1. The officer of the company owns 100% of the shares
2. The Officer is paid a salary throughout the year which is an expense to the business
3. Profit/Loss is passed to via the K1 , transfer to the 1040, which is then taxed.
4. Cash still remains in the bank from profits over the years now the officer wants to take some cash
out of the bank account for personal transactions
5. What accounts should I use

 

[Drmdcpa]

Profit distribution is the S corp equivalent to the C corp dividend equity account. But you need enough Triple A on the tax return to not cause an issue with S corp profit distributions. Thus throughout the year I prefer to post S corp shareholder distributions to a shareholder loan account and then wipe out the loan when the tax return is done showing enough Triple A to treat the funds as distributions.

 

[scarrie0490]

Profit distribution is the S corp equivalent to the C corp dividend equity account. But you need enough Triple A on the tax return to not cause an issue with S corp profit distributions. Thus throughout the year I prefer to post S corp shareholder distributions to a shareholder loan account and then wipe out the loan when the tax return is done showing enough Triple A to treat the funds as distributions.

I am not understanding this loan amount does this mean when the money is taken out you debit loan and credit cash.
What entry should be made during the year to account for the distributions , what will be the debit and credit accounts .Thanks for your advise