We have a client who is a builder Ltd (one director) and have just prepared 1st year provisional accounts. Profits 25K and Directors loan account overdrawn by 35K. He had sent the work in progress and stock figures which seemed sensible.
Now he is apply for a mortgage his mortgage adviser has stated that Director Loan account should not be overdrawn and that dividends should not exceed disrubutable profits. Though I am waiting to hear what dividends have been formally declared in the year.
Bascically he wants to increase the profits. The issue now is that he is stating the WIP and stock figures provided where incorrect and that should be nearly double. Clearly this is wrong but how to handle it as would not want to produce accounts that do not show a true and fair view.