Franchise Refund Accounting Treatment
I wonder if anyone can let me know if I will be treating a refund of a franchise after 1 year, correctly in the accounts - as not done one before?
Franchise purchased for £10,000 plus Vat by a Sole Trader covering a three year contract.
After year 1, depreciation £3333.33 applied leaving £6666.66 in the balance sheet, and reducing profit by £3333.33 in year 1.
In year 2, disgruntled franchisee, demanded a refund as the purchase was not as agreed.
Amount received is £6048.00 plus Vat.
I am proposing the following:
B/S currently shows DR £10,000 Franchise and CR £3333.33 Franchise Dpn
Cr £6048 to Franchise and Cr £3333.33 to Franchise by doing a Dr £3333.33 to Franchise Dpn
this would leave a Balancing Allowance of £618.67, thus reducing profit in the year, as this is the amount he has lost.
By way of a Credit to Franchise and a Dr to P & L
- How do I clear transaction history - Sage 50 v9 262 8
- Tax Return Deadlines 107 2
- Please for the love of god can anyone clear this up for me accruals and prepayments please help anyone out there....accountants need to help other accountants out :) 248 9
- When will Private Principal Residence Relief cut will start? 526 11
- Flat rate vat error 323 7
- EC VAT 204 9
- Dividend paid to non-shareholder 523 13
- Property versus Trade in a Ltd Company 284 14
- Whats the best way to keep my accounts? 545 16
- can I claim a per diem 258 5
- s.755 ITA 2007 Gains on transactions in land 136 2
- Who picks up the slack? 1,373 8
- VAT on part of a closed pub 242 14
- CA self-employed income below personal allowance 93 1
- HMRC corporation tax software - how to enter negative expense 291 8
- Dispensation pointless ? 534 14
- Snotty HMRC letter - continued 859 19
- Underpaid taxes included in tax code connundrum 160 3
- Linux Accounting Software 567 13
- RTI due -no broadband 172 1
- Desperately seeking Susan, Sam or anyone with any other name 832
- Experience with Islamic investor following Sharia-compliant rules? 506
- Darwinpay Partnership Assessment 317
- How to format a stock book 286
- S464A Charge to tax: conferring benefit & BIK 228
- Tax efficient holding company structure 228
- Investment property company accounts template 218
- Outlook 2007 with business contact manager not loading on new laptop 210
- Sage 50 Customer Statements and Running Balances 180
- auto enrolment - calculation of first pension deduction 180