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1. • CommentAuthorjacqueline
   • CommentTimeJun 14th 2007

    
   hello
   if one of the share holders pulled out and was paid back his shares plus interest how do you account for that on the balance sheet, income statement and cashflow ? can you have a negative cash flo yet there is cash in the bank?
   thanks in advance for your time
2. • CommentAuthoradaclarke
   • CommentTimeJun 19th 2007

    
   This question is very confusing, if this is a corporation a shareholder can leave anytime by selling their shares to anyone, transfers of ownership should not affect S/E or cash flows. If your saying that you bought the stock back and paid cash, the stock is now considered treasury stock, which will decrease S/E on the balance sheet and will be shown in the financing section on the statement of cash flows as a decrease in cash.
   
   If this is a partnership, a withdrawal of a partnership will be handled by using goodwill or issuing bonuses. You should first revalue the assets to FMV, and payoff the partner by reducing the other partners capital accounts based on their proportionate shares. If you record goodwill, you would first revalue the assets to FMV, and record goodwill to make withdrawing partners capital account equal payoff, and pay off withdrawing partner.
   
   If this seems complicated, hire a CPA (especially if you have a corporation)!Its worth the investment!