Patronage Allocations

by Sherrill

Gas Refund via Patronage Allocations (for Sole Proprietor)

The instructions state: "If you are claiming some of your purchases as expenses against income, then you must include an applicable portion of the allocation on your income tax return". Plus "If registered for GST, the portion of GST related to business must be included on your GST return."

As I understand it the cash monies I received are not taxable but the business portion of allocation is income. Also must pay back the ITC received on the business portion.

Cheque received $103.51
included GST refund of $11.34 ($10.46 is Bus. Portion)
Allocation was $233.74 (of which $215.51 is business)

Firstly I must deposit the money into my cheq acct. This is how I assume I should do it?
DR Cheq Acct $103.51
CR GST Pd on Purchases $10.46 (Bus. Portion)
CR Owners Equity (????) $93.05

Secondly the business portion of allocation is to be documented as income as I get a T4A for $233.74 which I include on line 30 (taxable amt of $215.51 and nontaxable amt of $18.23). Thereby on Line 130 of the T1 general "other income" it shows $215.51 (as the personal portion is not taxable).

I'm sure what I should DR (make an acct under other assets called Equity Shares????) and CR a revenue acct for allocations???.
DR Equity Shares (??) $215.51 (Bus. Portion)
CR Other Revenue(Allocations)(??) $215.51

Any clarification/thoughts/input would be appreciated.

PS - I so love your website and all your help. You give answers to questions I cannot find anywhere. Thanks a million.

image of fancy scroll lines

Hi Sherrill,

I am very busy the next week or so ... sooooo I'm posting your question without a response at this time. I am hoping some of my visitors may be able to help you out. If not, I will try to fit in time to respond shortly

Comments for Patronage Allocations

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Jan 25, 2011
Patronage Dividend
by: Lake


I'm assuming this is a Coop or UFA patronage dividend you have received. You probably have a statement explaining the total patronage and how much was allocated to cash and how much was allocated to something else.

As you are wanting to create an asset account called Equity Shares, I'm guessing the remaining allocation on your statement says it is for equity shares.

I feel like I am missing a piece of information. So I'll just give an example ignoring sales tax.

Patronage Dividend = $300 made up of $90.00 cash and $210 equity shares

DR equity shares (a bank type of account in the current asset section) $210
DR cash in bank (a bank type of account in the current asset section) $90
CR other revenue (for business portion of patronage dividend) $270
CR owner's contribution (for personal portion of patronage dividend) $30

All you have to do now is apply your numbers to the example adjusting for sales tax. The business portion goes to GST Payable and the personal portion goes to Owner's Contributions.

I'm assuming your total patronage dividend is $337.25 made up of $103.51 cash plus $233.74 equity shares.

DR equity shares (a bank type of account in the current asset section) $233.74
DR cash in bank (a bank type of account in the current asset section) $103.51
CR other revenue (for business portion of patronage dividend) $215.51
CR GST payable (for business portion) $10.46
CR owner's contribution (for personal portion of patronage dividend including personal portion of GST) $111.28 (I backed into this number)

Like I said, I'm just guessing because I feel like some information is missing in your write-up.

P.S. I would like to remind you there is a difference between information and advice. The general information provided in this post or on my site should not be construed as advice. You should not act or rely on this information without engaging professional advice specific to your situation prior to using this site content for any reason whatsoever.

Jan 31, 2011
more info
by: Sherrill

Yes it is a Co-op. The statement says Equity and Cash back.

Here are the amounts on the statement under the Equity column.

New Member = $5.00
Fuel = $233.74 (also under Allocation column)
GST = $11.34
Tax 15% ($233.74 - $100) = -$20.06
Cheque issued = -$103.51
TOTAL Equity column = $126.51

TOTAL Allocations Column = $233.74

Of the GST $11.34 (92.2% or $10.46 was business)
Of the Allocations $233.74 (92.2% or $215.51 was business)

Sorry for the confusion. Hope this helps. Sure appreciate your time.

Jun 15, 2016
How to post this
by: Anonymous

Trying to find out what was the correct way to post after the last posting.

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