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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Step 1 Don’t attempt your own accounts if you are clueless
Step 2 Find someone who isn’t clueless
Step 3 Relax
I can assure you they are wrong.
That £1,200 in the bank is more than enough to pay to have things done properly.
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.
Can you afford to get it wrong?
Getting wrong is often far more costly than the modest fee of an accountant.
'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.
No, you can't backdate payroll. To set one up requires reference details from the HMRC and regular returns must be made.
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.
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.
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.
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.