Return of Fraudulent Funds

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#1
Bob A  
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S Chapter employee stole a business check in 2020 and cashed it ($3,600). At the time the transaction was recorded as a distribution of funds ($3,600). The bank was notified. Fast forward to March 2021, the funds were recovered by the bank and redeposited to the business account ($3,600). The question is what would be the proper transaction to record this return of funds in March 2021?
ty
 

#2
sjrcpa  
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Bob A wrote:At the time the transaction was recorded as a distribution of funds ($3,600)

To whom? Shareholder? Or recorded as an expense and deducted as such?
 

#3
Bob A  
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to the shareholder, yes
 

#4
sjrcpa  
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If cash outflow was reported as a shareholder distribution, then the cash inflow is a capital contribution, or reduction of current year distributions.
 

#5
Bob A  
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thanks SJR
 


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