Small Ltd Company Balance Sheet Help

Small Ltd Company Balance Sheet Help

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Hi,

I am trying to prepare accounts and corporation tax for a friends business but working in industry myself I am outwith my comfort zone and think I have got myself in such a knot I can no longer seem to remember the basics!! So apologies for what are no doubt very simple questions.

The P&L for this trading year was fairly straight forward, it is the balance sheet that I'm struggling with.

 Do I need to know if there was a difference in cash received vs income expected for invoices outstanding at 2012 year end? Will this affect the balance sheet?

Should I be taking opening Debtors - cash paid and then writing off any difference as bad debt expense? (The director would have agreed any difference post invoicing so will be happy with whatever the eventual receipts were. And asuming no debtors at end of 2013 year end)

Most grateful for any advice.

Replies (9)

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By pawncob
02nd Jul 2013 20:33

What's expected?

What is income expected?

Sales will be Invoices Issued. Derived from actual figures or by Sales ledger Control a/c.

You have to PROVE Bad Debts, you can't just assume the difference is to be written off.

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By johngroganjga
02nd Jul 2013 21:12

Your trade debtors at the end of the year will be the sum of the trade debtors at the beginning of the year and the invoices raised during the year - less the cash received from debtors during the year. You then need to consider the recoverability of each debt and provide for any that the directors consider are unlikely to be recovered.

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By Fred Smith
02nd Jul 2013 23:44

You can try to reconcile the closing balance with the opening balance but for your sanity just consider the closing balance sheet date and assets and liabilities at this point.  It should balance.....

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By petersaxton
03rd Jul 2013 00:32

Just do it properly!

Analyse bank statements, petty cash, expenses (and income) paid/received personally and compare invoices to money received.

There's no way you can take short cuts.

I've just taken on a job where the owner come up with a profit and loss account and the previous accountant put any differences to "Director's loan/Creditors"!

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By johngroganjga
03rd Jul 2013 08:03

It is worrying that you seem to think that the P & L account has been completed without any difficulty but there are some difficulties with the balance sheet.

If you were following proper procedures you would not have been able to complete the P& L account without having completed the balance sheet.

It sounds as though you may be trying to force a balance sheet to conform with a particular profit and loss account, which is inappropriate.  The correct profit and loss account will emerge automatically when you have completed the balance sheet. 

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By mikeyban
03rd Jul 2013 08:21

A little knowledge is a dangerous thing . Obtain accountant fast!!

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By andy.partridge
03rd Jul 2013 10:57

Double-entry bookkeeping

You can't beat it. If it were done then you would have a profit and loss account and balance sheet simultaneously.

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By MissAccounting
03rd Jul 2013 11:01

Come clean to your friend and advise him to speak with an accountant in practice.  Last thing you want is your friend getting an inspection and HMRC finding an issue and them coming back to you.  

 

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By petersaxton
03rd Jul 2013 12:11

Reminds me of exams

when you are expected to calculate the profit on selling to branches or some consolidated accounts calculation. I always thought how much easier it would be if I had the time to do the complete double entry. I didn't realise some people really did try to work out one figure at a time!

 

 

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