Accounting & Bookkeeping & Small Business Forum

[Guest]

I have a quick question. When the owner of an LLC draws from the business account for herself, how do you account for her draw?? I had it as a salary expense but have since been told that this is incorrect. Do I need to set up a contra equity account named owner dispursements? If so, how would I go about setting this up on Peachtree. I didn't see a contra equity choice on there. Thanks for the help.

[Guest]

You would debit owners equity (which in a LLC is called members equity) and credit cash

[Guest]

So if you debit owner's equity and credit Cash, how do you report this on the LLC's form 1065 -
and do the member's pay for this withdrawl on their personal income taxes?

I have been debiting owner's equity this far, but now I am showing on the balance sheet negative equity accounts, but these amounts are not reflected in the Profit & Loss. So if I credit Cash, it will show up on their Profit & Loss as negative expense amounts. Is this correct?

And how do you account for this Cash line item on the form 1065?

Highly confused about this issue. Thanks.

[Guest]

So if you debit owner's equity and credit Cash, how do you report this on the LLC's form 1065 -
and do the member's pay for this withdrawl on their personal income taxes?

I have been debiting owner's equity this far, but now I am showing on the balance sheet negative equity accounts, but these amounts are not reflected in the Profit & Loss. So if I credit Cash, it will show up on their Profit & Loss as negative expense amounts. Is this correct?

And how do you account for this Cash line item on the form 1065?

Highly confused about this issue. Thanks.

[Guest]

I use a capital account number under the category Equity-Gets Closed.