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Directors Loan - Balance Sheet not showing a loss?

Directors Loan - Balance Sheet not showing a loss even with £10,000 expenses

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I have my first years accounts to do. I have spent over £10,000 on expenses on my personal current account and look to offset them against my profit to make a loss in the first year. Even with the Directors loan account set up, it still says i made a profit in the first year? How can this be? I shoule be looking at a £10,000 loss on paper. I have attached a Balance Sheet & Profit & Loss below. Is this correct? Finally is the directors loan supposed to be in the Balance sheet and The Directors Drawing in P&L under expenses?

Thanks,

 

Alex.

Balance Sheet

  Total
Fixed Asset  
   Tangible assets  
      Furniture and Equipment 129.95  
   Total Tangible assets £                                                    129.95  
Total Fixed Asset £                                                    129.95  
Cash at bank and in hand  
   Santander Current 1,222.69  
Total Cash at bank and in hand £                                                 1,222.69  
Debtors  
   Debtors 0.00  
Total Debtors £                                                        0.00  
Net current assets £                                                 1,222.69  
Creditors: amounts falling due within one year  
   Trade Creditors  
      Creditor 0.00  
   Total Trade Creditors £                                                        0.00  
Total Creditors: amounts falling due within one year £                                                        0.00  
Net current assets (liabilities) £                                                 1,222.69  
Total assets less current liabilities £                                                 1,352.64  
Total net assets (liabilities) £                                                 1,352.64  
Capital and Reserves  
   Directors Loan 10,630.10  
   Opening Balance Equity -10,330.10  
   Retained Earnings 838.70  
   Profit for the year 213.94  
Total Capital and Reserves £                                                 1,352.64  

 

Profit & Loss

7 June, 2017 - 30 June, 2018
   
  Total
Income  
   Services 3,336.90  
Total Income £                                                 3,336.90  
Gross Profit £                                                 3,336.90  
Expenses  
   Advertising 198.98  
   Directors Drawings 1,680.00  
   Dues and Subscriptions 364.60  
   Meals and entertainment 5.15  
   Office Supplies 24.82  
   Travel Expense 11.22  
Total Expenses £                                                 2,284.77  
Net Operating Income £                                                 1,052.13  
Other Income  
   Interest income 0.51  
Total Other Income £                                                        0.51  
Net Other Income £                                                        0.51  
Net Income £                                                 1,052.64  

Replies (19)

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By andy.partridge
31st Jan 2019 20:21

Step 1 Don’t attempt your own accounts if you are clueless
Step 2 Find someone who isn’t clueless
Step 3 Relax

Thanks (1)
Replying to andy.partridge:
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By alexjfinn
31st Jan 2019 20:32

Hi Andy,
Unfortunately im not in a position to pay an Accountant.
The businesses was hardly trading during this period.
I just need some advice to see if the documents are correctly presented before i file anything.

Thanks (0)
Replying to alexjfinn:
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By andy.partridge
31st Jan 2019 20:40

I can assure you they are wrong.
That £1,200 in the bank is more than enough to pay to have things done properly.

Thanks (2)
Replying to andy.partridge:
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By alexjfinn
31st Jan 2019 20:41

Thanks for the reponse Andy.
Please could you give me some guidence to explain where ive gone wrong and what needs ammending?
I really do appreciate the help.
Alex.

Thanks (0)
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By Rweaver
31st Jan 2019 20:49

Oh wow.

Yeah, you should go ahead and file them like that. It’ll be fine.

Thanks (0)
Replying to Rweaver:
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By alexjfinn
31st Jan 2019 20:51

Can you give me some advice please? :(

Thanks (0)
boxfile
By spilly
31st Jan 2019 20:52

You may appreciate the help, but an accountant would appreciate the fee from you. You may appreciate that once you file erroneous accounts and then get investigated and/or fined. A good accountant will help you save money in the long run, and many are sympathetic to those just starting out in business.

Thanks (0)
Replying to spilly:
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By alexjfinn
31st Jan 2019 21:01

Im unable to afford an accountant.

Thanks (0)
Replying to alexjfinn:
By mrme89
31st Jan 2019 21:19

Can you afford to get it wrong?

Getting wrong is often far more costly than the modest fee of an accountant.

Thanks (0)
Replying to mrme89:
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By alexjfinn
31st Jan 2019 21:21

can you tell me which parts are wrong?

Thanks (0)
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By JessicaRain
31st Jan 2019 21:48

'Director's Drawings' shouldn't be in your profit&loss (P/L). The £10K expenses that you claimed you spent your own money on should be added to your expenses in the P/L. The money the company owes you goes in the balance sheet (under creditors - amounts falling due under one year, if you like). Did you take a salary, ie did you operate a payroll? If no, there's no pay to deduct under expenses (shame). Anyway, the above is a start. You need an accountant.

Thanks (1)
Replying to JessicaRain:
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By alexjfinn
31st Jan 2019 21:52

Thanks Jessica, I know this will be a quesiton for my accountant, but is the any way to implement a payrol for a past date range by using the directors drawings?

Thanks (0)
Replying to alexjfinn:
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By JessicaRain
31st Jan 2019 22:00

No, you can't backdate payroll. To set one up requires reference details from the HMRC and regular returns must be made.

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Replying to alexjfinn:
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By Cheshire
31st Jan 2019 22:01

You can't re-write history.

But those accounts need a complete re-write.

You cannot afford not to get an Accountant.

Do yourself and your business a favour and get one tomorrow.

Thanks (0)
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By andy.partridge
31st Jan 2019 22:20

Alex, you’re 21 with a lot to learn. You’ve made a reasonable stab at bookkeeping but you’re no accountant.

There’s another 5 weeks before you need to file your accounts. Pay for some good advice. See it as an investment and benefit from it.

Thanks (1)
Hallerud at Easter
By DJKL
31st Jan 2019 22:24

The Opening Balance Equity/Directors loan postings are all wrong, so no guarantees the other postings are accurate, in addition you need to deal with share capital somewhere, the £1 share issued is stated as paid per Co Hse so needs reflected within the books.

The retained earnings are wrong and the profit for the year does not match from I & E to BS, thought the two together seem to marry ,totalling £1,052.64.

£300 of director's loan account looks like it has actually been posted somewhere else, was that bit correct, who knows.

The director's loan does not nestle within capital and reserves where you have posted it, needs moved.

Someone needs to reverse what you posted re the director's loan transactions and then post them correctly, they also need to work out what is the position re the share capital and correct it, they need to check everything else and accordingly you need to get an accountant before you make a real hash, above are mere casual observations without sight of the horrors of checking the other postings.

You are trying to fly before you have earned your wings which ought to resonate with you given the other company in which you have a 50% interest.

Thanks (1)
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By alexjfinn
31st Jan 2019 22:38

Right everyone I can’t thank you enough for replying. I think it’s been a good lesson to me that some things are much better left to the professionals. I’m going to try and find an account tomorrow. What would you guys approximate the cost to be for the “average” accountant? I’m going to provide all statements and expenses to try and save the accountant time thus some financial.

Let me know what I shouldn’t be paying. Hardly any traffic in the first year.

Alex.

Thanks (0)
Replying to alexjfinn:
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By SXGuy
01st Feb 2019 08:23

You'll be hard pressed to find any one here giving you there fee structure.

Ring more than one accountant, compare their fees. Go with whatever one you feel can give you the best service for what you can afford.

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By bernard michael
01st Feb 2019 10:20

This gets posted on 31st Jan and expects an answer

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