Distrubution to partners for 2018

You don't record the additional $50K until it is actually paid out.  The shorted partner has a equity.  Closing out distributions and contributions depends on how you set up your QuickBooks file.  Do you have a retained earnings account on the balance sheet?  If you do, then you roll the contributions and the distributions into retained earnings on the 1st day of the new year.

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@QBsguru wrote:

You don't record the additional $50K until it is actually paid out.  The shorted partner has a equity.  Closing out distributions and contributions depends on how you set up your QuickBooks file.  Do you have a retained earnings account on the balance sheet?  If you do, then you roll the contributions and the distributions into retained earnings on the 1st day of the new year.

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Retained Earnings account is a default account.

"you roll the contributions and the distributions into retained earnings on the 1st day of the new year."

No, wrong direction.  You roll up retained earnings into equity.

There are no distributions, just draw. (unless guaranteed, but that's an expense)

There s/be 3 sub-accounts for each partner: contributions, draws and equity

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@owneal wrote:

We have an LLC with 3 partners.  Each partner in Quickbooks has an Equity account and then sub accounts in that equity account for contributions and also member draw. 

 

If a member has a draw of 100k but based on year end numbers should have received 150k for example, how would I record the payment of the additional 50k?  Also how would I close out the draw from the previous year in QB?

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There is a basic premise gone wrong or misunderstood here

Partners have equity, that is the amount of the business they own.  They are free to draw out their ownership as they desire (unless the partnership agreement places some stipulation on withdrawals or minimum equity balances - only you can read the partnership agreement to see if that stipulation exists)

The partnership makes money, at the end of the year there is net income which is transferred to retained earnings on the first of the new year.

That amount in retained earnings belongs to all partners.  You use the partnership agreement to determine how much goes to each partner, the partnership agreement will either state the share as flat percentage per partner or some other method of determining that - again only you can find that out.

Then after all income tax adjusting entries are made, if there are any, you distribute retained earnings with a journal entry.  Assuming an equity share of 30%, 30%, 40%

debit retained earnings 150,000

credit partner one, 45,000

credit partner two, 45,000

credit partner three, 60,000

Journal entries are also used to roll up last years equity investment and draw for each partner

debit investment, credit equity

debit equity, credit draw