Ski Chalet business - Private minibus & missing receipts.

Hi all,

I am helping a friend get their bookkeeping in order so they can prepare their 1st year accounts (Sept 10 - Sept 11) for his ski chalet limited company (not VAT registered). I have found a couple of issues and wondered whether anyone has any guidance.

Lack of receipts - Their book keeping was virtually none existent, so I have been working from his bank statements. I have been able to allocate his expenses based on the bank descriptions, but when they have withdrawn cash to use for the business but have not kept a receipt how should we record this? He is able to give me explanations of what the cash was used for which all seem sensible and legitimate, but without receipts I am unsure what to do. Is it sufficient to allocate in line with his explanations and get him to make a note of what the cash was used for to keep in his accounting records?

Privately owned minibus - The Director bought a second hand minibus privately (before the company was set up) to use for guests/shopping/moving equipment etc. The minibus is solely used for the business and is taken off the road each summer. It has now been used for two winter seasons and he plans to sell it and replace it. Regardless of the relevant merits of keeping it private and claiming mileage allowance vs putting the expense in the business for capital allowances etc, from an administrative point of view is he able to transfer the minibus to the business for his accounting year to Sept 2011 given that we are now May 2012? Would this be in the form of a loan from the director? The log book is still in his name, so I assume he couldn't treat it as a sale to the company?

Thanks for the advice in advance!