380 – Investment

Net Worth

Synopsis

Account 380

Debits

Credits

  1. The balance of withdrawals recorded in Drawings (Account 390).

  2. Any reduction in the members’, partners’, or proprietor’s investment.

 

  1. Cash and fair market value of assets invested in the business.

  2. The net income for the accounting year (after income tax) as shown in Net Profit or Loss (Account 399).

 

Remarks:

This account should be used only by dealers operating as a limited liability company, partnership, or proprietorship.

 

Members’, partners’, or proprietor’s withdrawals should not be charged to this account until the end of the fiscal year, at which time Drawings (Account 390) would be closed to this account.

 

The balance in this account represents the total investment in the business, including the net earnings of prior years' retained in the business.

 

A separate investment account ledger sheet should be provided for each member or partner, showing the amount of individual investment; the total of these sheets should be reflected in this account on the Subaru Dealer Financial Statement.  Allocation of profits or losses to each member’s or partner's account should be made in accordance with the charter or partnership agreement.

Note: