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taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Profit and loss or revaluation reserve?

Resolved Question:

Hi

 

I have Shareholders' funds = 13314

Called up share capital =     3000 

Profit and loss  =  8062

 

And this result a difference of 2252,

 

This is revaluation reserve or I must put it PL account.

 

Thank you

Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.

Hello and welcome to the site. Thank you for your question.

What makes you suggest that it is revaluation reserve?
How have you arrived at shareholders funds value of 13,314?
Do you have top half of balance sheet?

What was your profit and loss account balance at the end of last year and what is retained profit for this year?

I need more information in order to assist you.

Many thanks

Customer: replied 1 year ago.

Hi,

Thank you for your reply.

I have profit and loss account:























































Revenue, Income167080
Cost of Sales 147812
Gross Profit2 minus 319268
administrative expenses10143
Net Profit(before tax)4 minus 59125
20% tax1825
Net Profit 7300

and

Cash at bank and in hand


9125
Debtors15249
Creditors12012

and


















































































































































































Current:Called up share capital not paid0
Total net assets (liabilities) Shareholders' funds
Fixed assets Called up share capital3000
Intangible assets0 Share premium account0
Tangible assets0 Revaluation reserve0
Investments0 Other reserves2252
Total fixed assets0 Profit and loss account8062
Shareholders' funds13314
Current assets
Stocks0
Debtors15249
Investments0
Cash at bank and in hand10077
Total current assets25326
Prepayments and accrued income0
Creditors: amounts falling due within one year-12012
Net current assets (liabilities)13314
Total assets less current liabilities13314
Creditors: amounts falling due after more than one year0
Provisions for liabilities0
Accruals and deferred income0

The difference 13314 - 3000 - 8062 =2252, where I must put it ?


In



Share premium account

or in

Revaluation reserve

or in

Other reserves

or add in

Profit and loss account = 8062



I have put it in Other reserves , where to put it, what it is?


Kind regards,

Andrei
Expert:  taxadvisor.uk replied 1 year ago.

Andrei, thank you for your reply and for the information.

Please advise if this is your first year of trading/reporting.
If not, I will appreciate if you could send me your balance sheet for last year.

You have made a profit after tax of £7,300 and your balance sheet shows under profit and loss account a value of £8,062. This would suggest there was a balance on your profit and loss account before current year's trading results are added.

Secondly, you have no fixed assets. Normally, a revaluation of these may give rise movement on revaluation reserve.Unless you have issued shares at a premium (at a price higher than the nominal vale of the shares), it is not share premium.

Your net assets don't match shareholders funds and the difference is £2,252.
There could be other reasons why they do not match ..e.g. understatement of creditors, overstatement of current assets, understatement of profit.

Have you reflected CT provision of £1,825 within your creditors?

Have you allowed for all creditors, including payments made by the director out of own funds and not paid back?

I will be happy to continue with providing help once I receive more information from you.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond. Please only rate my answer if it is acceptable.

taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 1 year ago.
I thank you for accepting my answer.

Best wishes.

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