Owner's Contribution - Corporation

Hi All,
When a Corporation opens up a new business and makes a Deposit to the
Business Account to open a brand new account. Do they post the Deposit
towards "Owner's Contribution"?
Thanks, Lynne
Reply to
Lynne Lepage
"Lynne Lepage" wrote
An existing corporation? No. Not if the money came from corporate assets.
The only time "Owner's Contribution" (equity) accounts are affected are when there are transactions to or from the owners that aren't classified as a loan to/from the company or a stock purchase / sale with the company.
Generally transactions with the shareholders impact stock and additional paid in capital accounts. An account called "owner's contribution" isn't what I'd expect to see on a corporate chart of accounts.
Reply to
Paul Thomas, CPA
Thanks for the reply. I am used to doing books for Sole Proprietorship Businesses.
Lynne
On Nov 17, 8:44 am, "Paul Thomas, CPA" wrote:
Reply to
Lynne Lepage
Let's say the owner of a corporation (a restaurant) funds the company bank account with personal assets. The restaurant has not opened yet, but he feels the need to withdraw funds for personal expenses. He has worked many hours to get the place ready for opening. Can the withdrawn funds be considered startup expenses (salary) or is it an equity draw?
Reply to
Rocinante
"Rocinante" wrote
Assuming that the corporation has already been capitalized - meaning that the shareholders have already paid for their stock - then I'd be inclined to treat this transaction as a loan, and the withdrawal (below) as a reduction in the loan.
Unless there is a legal reason to have more capital on the books I see no purpose in booking it as a capital transaction.
If there is a need to generate taxable salary to the owner from money he loaned the business, knock yourself out. I see that as counter productive on all fronts. It sounds like reverse Enron accounting. Loan money, take salary, pay taxes. Loan money, take salary, pay taxes.
Reply to
Paul Thomas, CPA

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