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

i am filling in the...
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.
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Answered in 3 minutes by:
6/25/2013
taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: UK Tax
Satisfied Customers: 5,023
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
Verified

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

 

 

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Customer reply replied 4 years ago
AC64: £2427 (above)
This is the directors account.
A further £323 realised from sales, went into funding operations

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

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Customer reply replied 4 years 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


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.

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Customer reply replied 4 years 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

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.

 

 

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Customer reply replied 4 years 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.

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
taxadvisor.uk, Chartered Certified Accountant
Category: UK Tax
Satisfied Customers: 5,023
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
Verified
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Customer reply replied 4 years ago

Thank you

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