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Capital introduced and Drawings for LTD Co

We have a client who is a Ltd company with one director only. They have introduced capital in the company and have drawings taken money out of the business. We will be filing the accounts but according to FRS 102 how do we account for this in the accounts. The Ltd company is very small turnover less than 5k. Many thanks Rakhi H Patel ACCA

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By Ruddles
21st Mar 2018 21:21

The accounts will reflect what actually happened - which isn’t clear from the terminology used. “Capital introduced” and “drawings” tend to be reserved for unincorporated businesses.

But, frankly, you need to consider whether you should be advising company clients.

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By Rakhi
to Ruddles
21st Mar 2018 21:42

Many Thanks the limited company incorporated the sole director put money into the business and have take some monies from the business. A directors loan account would need to be set up is this the correct treatment?.

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By jcace
21st Mar 2018 21:43

Money that the director has introduced to the business will in all likelihood be by way of a director's loan. Similarly, when the director then withdraws some of that money, that too will be from the same director's loan. If the director is also the sole shareholder, you will need to know whether any dividends have been declared/paid and you will also need to know what amounts have been paid by way of salary.

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By Rakhi
21st Mar 2018 21:48

No salary has been withdrawn by the director from the business, no dividends or shares have been paid or issued.

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By Ruddles
to Rakhi
21st Mar 2018 21:53

Rakhi wrote:
no dividends or shares have been paid or issued

In your client’s best interests, please pass them to someone that knows what they’re doing.
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By Rakhi
21st Mar 2018 22:01

Thank you all for your replies.

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22nd Mar 2018 09:53

The phrasing and, the content of your post, is a concern.

Your website states that you are Chartered Certified Accountant, with a Finance and Accounting Degree.

The naivety of your enquiry implies that you do not have a basic grasp of how to account for a directors current, or loan account?

With respect, I trust you can appreciate my scepticism?

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to Chris.Mann
22nd Mar 2018 10:03

Jeez - the Certifieds are going downhill.

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22nd Mar 2018 10:06

The director loaned the company money (a) and the company is repaying the loan (b). There will be a balance owing (a)-(b) in creditors if (a) is larger than (b).

Did I hear someone suggest ACCA standards might be in freefall?

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to andy.partridge
22nd Mar 2018 10:48

andy.partridge wrote:

Did I hear someone suggest ACCA standards might be in freefall?

Yes - me.

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By Locutus
to lionofludesch
22nd Mar 2018 13:04

As an ACCA member of more than 20 years standing, I was a bit shocked by the OP's comments.

I think a problem tends to be that professional exams generally (not just ACCA) are not particularly practical in nature.

When I became self-employed, the real world experience that I learned in 12 years working as an employee in various accounting practices proved far more useful than my professional qualifications.

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