Shareholder Distribution

USA Discussion in 'General Accountancy Discussion' started by krcroteau, Dec 29, 2018.

  1. krcroteau


    Dec 3, 2018
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    I have two questions regarding Shareholder Distributions for my S-Corp where I am both the owner and employee.

    1. My S-Corp pays my ACA Healthcare premiums each month. At the end of the year I am supposed to close out the Health Insurance account with a Credit to Health Insurance and a Debit to Shareholder Distributions. Is this correct?
    2. I'm also taking a $2500 distribution. I have Capital Stock of $3000 and I am the 100% shareholder. What are the journal entries for this transaction?
    What entries should I be making to Retained Earnings at the end of the year?

    I appreciate any help. My income is very low. Thank you.
    krcroteau, Dec 29, 2018
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  2. krcroteau

    kirby VIP Member

    May 12, 2011
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    At the end of the year, all revenue and expense accounts are closed out and the offsetting entry is to an Equity account, usually called Retained Earnings.
    If your distribution is entirely from your original capital and not earnings then the entry is
    Dr Capital Stock $2,500
    Dr Cash ($2,500)
    kirby, Dec 30, 2018
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