[Question] Trusts: Allocations to beneficiaries

[nichoalscfm]

Hi There

Could any one please advise

I need to allocation distributions to beneficiaries in a Trust.

What are the debits and credits in this case?

And are the balance sheet or Income statment accounts?

[Neville Bailey]

I would imagine that the accounting treatment would be very similar to that of Partnership Accounting - have a look at this thread in which I outlined a detailed procedure.

Substitute the word "Partner" with "Beneficiary".

[J7J]

Hi,

If it is a R100 cash distribution to Beneficiary A:

Dr. Distributions paid to beneficiaries (B/S:Equity) 100
Cr. Cash (B/S: Assets) (100)

If it is a R100 distribution to Beneficiary A on loan account:

Dr.Dr. Distributions paid to beneficiaries (B/S:Equity) 100
Cr. Loan Account: Beneficiary A (B/S: Liability) (100)