Can some acc or tax expert answer my 2 questions ?

xiaoyunsusu

I am always confused about the journal of repaying business owner's loan,  especially after discussion with financial controller. May someone could help me to clarity this. ..

My understanding is that  as owner initially lend money to business it should be recorded as a loan to the business ( liability) or increase of equity.  Whenever owner withdraws cash, it's kind of activity of repaying business loan or diminishing owner's equity.  

Journals are:

At business establishment : Dr. Cash XXX  Cr. Equity XXX; or Dr. Cash XXX Cr. Director Loan

When withdrawal made :   Dr. Equity XXX, Cr. Cash XXX, or Dr. Director Loan Cr. Cash XXX.

Am I thinking it in the right way?  When my boss withdraws money for his personal use, our FC always ask me to record the payment in a receivable account. How come the owner's withdrawal can result in an asset increase? I really cannot understand this, even though he said this is correct.

Another questions confused me is about UBE. I am not sure what this stand for.

We are just required to pay fixed amount quoted UBE to boss's daughter every month. FC has explained this equals to the amount that  boss' daughter can get from Centrelink.  

Why there is something to do with centrelink then? FC is a tax expert, so I guess this probably has tax effect ? Could some one have any idea help me with both questions? I am so confused, and can't find the answer by google.... Many many thanks.

LCWONG

The journals are all ok. But in the end of financial year, you have to clear Director's Loan account to zero, or my declare dividend if you can not clear it to zero.

xiaoyunsusu

LCWONG 发表于 2013-11-28 17:45
The journals are all ok. But in the end of financial year, you have to clear Director's Loan account ...

Thanks for your reply. Could you please explain what do you mean by clearing director loan? If this is a loan repayment, there is no tax effect right?

晓风残星

UBE? Should this be UPE? Unrepresented Entitlement?

Just becareful when it comes to Dr Director Loan at year end, caught for Div7a issue.

bigbigapple

Your FC ask you to record this under receivables because FC wants to avoid the Div7A issue. Normally we use receivables or director loan. But need to fix it in the end of financial year

lulucai

Unpaid Present Entitlements (UPE's)

lulucai

是不是说，如果当作loan repayment 就有可能是unfranked dividend, 然后owner就需要pay income tax on dividend.
如果是receivable, 那就是owner 从公司借钱，以后要还的，owner就不用交income tax了

bigbigapple

lulucai 发表于 2013-11-29 10:24
是不是说，如果当作loan repayment 就有可能是unfranked dividend, 然后owner就需要pay income tax on divi ...

不管怎么记, 年尾都要调帐, 调帐的时候一般会用franked dividend,如果公司有franking credit的话. 或者用bench mark interest rate来计算director应该付的interest.

lulucai

bigbigapple 发表于 2013-11-29 16:47
不管怎么记, 年尾都要调帐, 调帐的时候一般会用franked dividend,如果公司有franking credit的话. 或者用 ...

那这样的话，还是交税啊，并没有什么大好处啊

bigbigapple

lulucai 发表于 2013-11-29 22:11
那这样的话，还是交税啊，并没有什么大好处啊

ATO就是不想让directors有大好处，所以才有Div7A。在澳洲不能胡来