We had a profit distribution this year... help setting this up?

cob

Excuse my lack of accounting jargon...

We had a profit distribution at the end of the year. No cash was distributed as of yet and the profit distribution is considered "undistributed taxable income" and will show up as shareholder equity on the balance sheet.

I would love track the amount of SE owed to each shareholder...

I followed another thread and it seems like I should create a liability account under "Due to You and Other Business owners"...

General assumption: 4 owners all equal ownership - each has 25k due to them from SE.

A few questions:
1. If we have 4 shareholder/owners with equal ownership, do I create 4 "shareholder equity accounts"?
****2. How would I structure the journal transaction to indicate each owner has 25k due to them? This is may main confusion - how do I record this? **
**3. When payment is made - how do I record this?

Thank you so much for your help. If I am not clear please let me know.

AlexL

Hey @cob , welcome to the Community and thanks for reaching out about this! As it turns out, profit distribution falls under the realm of complex accounting which means you'd be best reaching out to an Accountant/CPA about this to get their professional advice.