How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask taxadvisor.uk Your Own Question

taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: UK Tax
Satisfied Customers: 3502
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based)
Type Your UK Tax Question Here...
taxadvisor.uk is online now
A new question is answered every 9 seconds

i am filling in the CT600 and i am stuck at Capital and Reserves This

Resolved Question:

i am filling in the CT600 and i am stuck at 'Capital and Reserves'

This is is our first return and therfore two filings are neccessary. the first filing covers the period 27/9/2011 to 18/11/2011

the figures inputed for the balance sheet are as follows:

FIXED ASSETS
Intangible assets: AC42 £ 0
Tangible assets: AC44 £220 (office furniture)
Total fixed assets: AC48 £220

CURRENT ASSETS
Stocks: AC50 £ 7290 (wholesale value of stock)
Debtors: AC52 £ 0
Cash at bank and in hand: AC54 £ 0
Total current assets: AC56 £7290
Creditors: amounts falling due within
one year AC58 £0

Net current assets (liabilities): AC60 £7290

Total assets less current liabilities: AC62 £7510

Creditors: amounts falling due after
more than one year:AC64 £2427 (this is money we have put into the business and expect to get back sooner or later)
Provision for liabilities: AC66 £0
Total net assets (liabilities): AC68 £5083

Profit (Loss) for the financial year is: -£1224

there are 2 directors and the company was set up with a share each, totalling £2

therefore Capital and reserves reads:

Called up share capital: AC70 £2
Revaluation reserve: AC76 £0
Profit and Loss account: AC74 -£1224
Total shareholders funds: AC80 -£1222 (this figure is not the same as the total net assets (liabilities), hence an error message appears.)

I dont know what to do.
Submitted: 9 months ago.
Category: UK Tax
Expert:  taxadvisor.uk replied 9 months ago.

Hello, if you have any questions or need further clarification after reading my answer please let me know.

 

I have had a quick look at your numbers...

 

You say there was no cash/bank balance at the year end..

How was the operation funded?

Who paid for the stock?

 

It looks like payments might have been made out of director's funds and these are not fully reflected in the accounts..

 

The company made a loss in the period amounting £1,224.

yet there are no debtors/creditors at year end.

 

There is a difference of some £8,732 between net assets and shareholders funds

 

 

Please advise status on Director's account (loan to the company for funding the operation)

 

Many thanks

 

 

Customer: replied 9 months ago.
AC64: £2427 (above)
This is the directors account.
A further £323 realised from sales, went into funding operations
Expert:  taxadvisor.uk replied 9 months ago.

Thank you for your reply and additional information..

Your numbers don't add up..

There is still a big difference between net assets and shareholders funds.

You are saying the operation made a loss in the period yet you have a healthy top half of the balance sheet.

How was your stock funded... can you confirm this stock figure is also not included within your cost of sales...

Please let me have your profit and loss numbers ..

Description

this year

this year

of account

box

amount

PROFIT AND LOSS

TURNOVER

AC12

0

COST OF SALES

AC14

0

GROSS PROFIT

AC16

0

DISTRIBUTION COSTS

AC18

0

ADMINISTRATIVE EXPENSES

AC20

0

OTHER OPERATING INCOME

AC22

0

OPERATING PROFIT OR (LOSS)

AC26

0

INTEREST RECEIVABLE

AC28

0

INTEREST PAYABLE

AC30

0

PROFIT OR (LOSS) BEFORE TAX

AC32

0

TAX

AC34

0

PROFIT OR (LOSS) FOR THE YEAR

AC36

0

DIVIDENDS FOR THE PERIOD

AC38

0

TRANSFERRED TO RESERVES

AC40

0

Description

this year

this year

of account

box

amount

BALANCE SHEET

INTANGIBLE ASSETS

AC42

0

TANGIBLE ASSETS

AC44

220

TOTAL FIXED ASSETS

AC48

220

STOCKS

AC50

7,290

DEBTORS

AC52

0

CASH AT BANK AND IN HAND

AC54

0

TOTAL CURRENT ASSETS

AC56

7,290

CREDITORS DUE WITHIN ONE YEAR

AC58

2,427

NET CURRENT ASSETS

AC60

4,863

TOTAL ASSETS LESS CURRENT LIABILITIES

AC62

5,083

CREDITORS DUE AFTER MORE THAN ONE YEAR

AC64

0

PROVISION FOR LIABILITIES

AC66

0

TOTAL NET ASSETS

AC68

5,083

CAPITAL AND RESERVES

CALLED UP SHARE CAPITAL

AC70

2

REVALUATION RESERVE

AC76

0

PROFIT AND LOSS ACCCOUNT

AC74

-1,224

TOTAL SHAREHOLDERS FUNDS

AC80

-1,222

Difference

xxxx

6,305

Many thanks

Customer: replied 9 months ago.













































































PROFIT AND LOSS



TURNOVER



AC12



323



COST OF SALES



AC14



215



GROSS PROFIT



AC16



108



DISTRIBUTION COSTS



AC18



67



ADMINISTRATIVE EXPENSES



AC20



1265



OTHER OPERATING INCOME



AC22



0



OPERATING PROFIT OR (LOSS)



AC26



-1224



INTEREST RECEIVABLE



AC28



0



INTEREST PAYABLE



AC30



0



PROFIT OR (LOSS) BEFORE TAX



AC32



-1224



TAX



AC34



0



PROFIT OR (LOSS) FOR THE YEAR



AC36



-1224



DIVIDENDS FOR THE PERIOD



AC38



0



TRANSFERRED TO RESERVES



AC40



-1224



 


The cost of sales above was worked out using the formula:


(opening stock value + cost of ourchases) - cost of closing stock


which were:


(215 + 1456) - 1456


 


(the cost of purchases+ distribution costs + administrative expenses) - turnover = directors loan


 


i have amended the


CREDITORS DUE WITHIN ONE YEAR below to reflect the true figure


 


Hope this helps


 
















































































































Description



this year



this year



of account



box



amount



BALANCE SHEET



INTANGIBLE ASSETS



AC42



0



TANGIBLE ASSETS



AC44



220



TOTAL FIXED ASSETS



AC48



220



STOCKS



AC50



7,290



DEBTORS



AC52



0



CASH AT BANK AND IN HAND



AC54



0



TOTAL CURRENT ASSETS



AC56



7,290



CREDITORS DUE WITHIN ONE YEAR



AC58



2,465



NET CURRENT ASSETS



AC60



4,863



TOTAL ASSETS LESS CURRENT LIABILITIES



AC62



5,083



CREDITORS DUE AFTER MORE THAN ONE YEAR



AC64



0



PROVISION FOR LIABILITIES



AC66



0



TOTAL NET ASSETS



AC68



5,083



CAPITAL AND RESERVES



CALLED UP SHARE CAPITAL



AC70



2



REVALUATION RESERVE



AC76



0



PROFIT AND LOSS ACCCOUNT



AC74



-1,224



TOTAL SHAREHOLDERS FUNDS



AC80



-1,222



Difference



xxxx



6,305


Expert:  taxadvisor.uk replied 9 months ago.

Thank you for your reply and additional information...

In your formula you have valued closing stock at £1,456 whereas you had originally used a figure of £7,290.

I would like you to peruse my revised balance sheet numbers.. I have adjusted both the stock figure and the creditors figure (the directors' account has been adjusted by £433 upwards to make the document balance and reflect other payments out of own funds). Bank account, debtors and other creditors show zero per your original submission..

The balance sheet agrees and there should be no error message.

BALANCE SHEET

INTANGIBLE ASSETS

AC42

0

TANGIBLE ASSETS

AC44

220

TOTAL FIXED ASSETS

AC48

220

STOCKS

AC50

1,456

DEBTORS

AC52

0

CASH AT BANK AND IN HAND

AC54

0

TOTAL CURRENT ASSETS

AC56

1,456

CREDITORS DUE WITHIN ONE YEAR

AC58

2,898

NET CURRENT ASSETS

AC60

-1,442

TOTAL ASSETS LESS CURRENT LIABILITIES

AC62

-1,222

CREDITORS DUE AFTER MORE THAN ONE YEAR

AC64

0

PROVISION FOR LIABILITIES

AC66

0

TOTAL NET ASSETS

AC68

-1,222

CAPITAL AND RESERVES

CALLED UP SHARE CAPITAL

AC70

2

REVALUATION RESERVE

AC76

0

PROFIT AND LOSS ACCCOUNT

AC74

-1,224

TOTAL SHAREHOLDERS FUNDS

AC80

-1,222

Difference

xxxx

0

If you need more information please let me know before you rate my service.

I hope this is helpful and answers your question. I am available for any follow up questions you may have, and you can use the reply button to post your follow up questions to the page. If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get paid for it.

Customer: replied 9 months ago.


It was our understanding that:


 



  • the Cost of Closing Stock = what it cost us to buy the unsold stock (i.e minus any post manufacturing/processing costs), hence £1456

  • Stocks (AC 50) is the value of the unsold stock (i.e. allowing for post processing and profit) hence £7290


 


Is it really that case that both are the same as you are suggesting?


Furthermore, can we really just bump up our directors account to allow the account tobance in this manner? Thanks

Expert:  taxadvisor.uk replied 9 months ago.

Thank you for your reply.

 

The accepted accounting convention is that stock is valued at the lower of cost or net realisable value. You can not inflate the stock value to cover unrealised profit.

 

In the absence of other information, I would be inclined to adjust the directors a/c.

Please let me how all costs were funded. The company has tangible assets, paid for overheads and purchases and the only cash processed is cash from sales.

 

I hope this is helpful and answers your question. I am available for any follow up questions you may have, and you can use the reply button to post your follow up questions to the page. If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get paid for it.

 

 

Customer: replied 9 months ago.

I understand about the stock now, thank you.


 


I have given you all of the info at my disposal. All costs were simply funded from our pockets, aside from the £322 realised in sales. It really is a simple as that.


 


I guess i just want to know that its really ok to adjust the directors contribution upwards. Of course it may just be that we havent kept as good a set of records as we thought and that this upward revision is in fact the true figure.

Expert:  taxadvisor.uk replied 9 months ago.

Thank you for your reply..

It is okay to present the accounts as recommended to you by me. I am a qualified accountant with years of experience and I have reconstructed your accounts from incomplete records. I will have no problems with presenting them as is if you were my client.

I hope this is helpful and answers your question. I am available for any follow up questions you may have, and you can use the reply button to post your follow up questions to the page. If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get paid for it.

taxadvisor.uk, Chartered Certified Accountant
Category: UK Tax
Satisfied Customers: 3502
Experience: FCCA - over 35 years experience as a qualified accountant (UK based)
taxadvisor.uk and 3 other UK Tax Specialists are ready to help you
Customer: replied 9 months ago.

Thank you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Andrew Baker(baktax)'s Avatar

    Andrew Baker(baktax)

    Personal Tax Adviser

    Satisfied Customers:

    756
    35+ years experience in income tax, CGT, non-residence
< Last | Next >
  • http://ww2.justanswer.com/uploads/baktax/2009-7-15_202414_Frame.jpg Andrew Baker(baktax)'s Avatar

    Andrew Baker(baktax)

    Personal Tax Adviser

    Satisfied Customers:

    756
    35+ years experience in income tax, CGT, non-residence
  • http://ww2.justanswer.com/uploads/teap007/2009-01-10_145815_bill_justanswer_for_profile.jpg TEAP007's Avatar

    TEAP007

    Tax Preparer

    Satisfied Customers:

    754
    Fully Trained Inspector of Taxes / District Inspector/ Team Leader/ Offshore Consultant/ 41 years
  • http://ww2.justanswer.com/uploads/BE/berduchwal/2011-6-7_84817_pict0854.64x64.jpg berduchwal's Avatar

    berduchwal

    Accountant

    Satisfied Customers:

    669
    Qualified accountant and bookkeeper running my own practice since 2008.
  • http://ww2.justanswer.com/uploads/JO/Josh2010/2012-4-29_19490_GettyImages80121770B.64x64.jpg Joshua's Avatar

    Joshua

    Lawyer

    Satisfied Customers:

    61
    LL.B (Hons), Higher Prof. Dip. Law & Practice
  • http://ww2.justanswer.com/uploads/RO/Ronaann/2012-3-19_23343_SSL22629.64x64.JPG Mrs-Tax's Avatar

    Mrs-Tax

    Tax Adviser

    Satisfied Customers:

    59
    Law Degree, 19 years in UK Tax.
  • http://ww2.justanswer.com/uploads/TG/TGraham12/2012-7-17_81212_bigstockBusinessHandshake508163.64x64.jpg Thomas's Avatar

    Thomas

    Solicitor

    Satisfied Customers:

    48
    Exposure to general tax issues
  • http://ww2.justanswer.com/uploads/struppiaml/2009-10-9_95150_anthony_business_002.jpg AnthonyL's Avatar

    AnthonyL

    Tax Adviser

    Satisfied Customers:

    19
    ATT, ATII, 12 years tax experience