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Accounting Journal for Right to Manage Company

Accounting journal for Right to Manage Company

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I have a client who is a Right to Manage company.  They are not for profit, the tennants pay the rent and extra to cover repairs and renewals.  At the end of the year if they have made a 'profit' this stays as a liability to the company as this money is due back to the tennants or they keep it in the company to cover forthcoming expenses.

I would like to know the accounting journal to remove the 'profit' from 'profit and loss' account to allow me to credit the 'due to lessees' on the balance sheet please.

 

many thanks

 

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Scalloway Castle
By scalloway
05th Jun 2019 16:18

If the Profit and Loss Account appears on the Balance Sheet then

Dr P & L
Cr due to lessees

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By [email protected]
05th Jun 2019 16:48

Hi but what nominal code do i use on the P&L

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Scalloway Castle
By scalloway
05th Jun 2019 21:09

You don't say what software you are using. If it is Sage 3200 is the code to use. If it is other software let us know and I will advise further.

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By [email protected]
06th Jun 2019 07:56

I am using sage accounts production. The profit and loss code 3200 but I need a nominal code to reduce the profit and loss account. Thanks

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Scalloway Castle
By scalloway
06th Jun 2019 08:55

You are wanting to treat this transfer as an expense of the company. I would regard it as an appropriation of profit, which is done on the Balance Sheet not the P & L.

A not for profit business will generate a surplus or deficit at the end of the year. This surplus or deficit is transferred to the Balance Sheet to carry forward to another year.

There is ICAEW guidance on RTM company accounts, including sample accounts here.

https://www.icaew.com/-/media/corporate/files/technical/technical-releas...

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