# I cant do my balance sheet.



## surfjuggler (29 Sep 2006)

Can anyone help me? I have two books on accounting and I cant seem to get a Balance sheet done. Its my first year, I have so few transactions it cant be that complicated – but I cant figure it out after two days of racking my brain.

Transactions in 2005:
I Issued invoices and bills for *€*23,195.14. All paid.
I Issued one invoice at year end for *€*5095.92 which wasn’t paid till 2006 
I had *€*9,477.38 in the bank at year end.
I introduced no capital at start of year.
I have no fixed assets.
I owed *€*100 on business credit card at year end
I took out drawings of *€*5.750 
I calculated retained profit from P&L at *€*17,945.06
Which is simply income (23195.14) – expenses(2491.71) – tax payable (2758.37). 
Can you help me on doing a balance sheet?
As you can see it’s a small business and I would like to avoid  spending a grand on an accountant.
Thanks for any help or advice


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## CCOVICH (29 Sep 2006)

No-the figures don't seem to add up.

I think your profit could be understated by €5095.92 -if this invoice was issued in the current year, it should form part of 'Income' in the p&l.

Are you sure you are not missing something?

Have you done an opening balance sheet and worked it out from there (the incomplete records tabular approach from LC)


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## ClubMan (29 Sep 2006)

Are you a limited company or a sole trader? Are the accounts for _Revenue _or _CRO _or both? If they are for submission to any state body then you really should get an accountant to assist.


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## surfjuggler (29 Sep 2006)

Im a  sole trader. I guess technically I dont need accounts for anyone, but I though I would need them to fill in the extracts from accounts page on the F11 tax return.


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## ubiquitous (29 Sep 2006)

You do indeed need to have accounts prepared in order to (1) provide a basis for the profit/loss figures in your form 11 return (2) complete "accounts extract" pages on the form 11.  It is impossible to properly complete "accounts extract" pages unless the accounts themselves are already prepared. Otherwise it could be argued by Revenue that you were abusing the "accounts extract" processes specified by them in relation to Form 11 returns. 

In general, you are playing with fire if you attempt to arrive at these figures without a proper understanding of tax or accounting principles. Filing an incorrect tax return can have serious consequences for self-employed individuals.


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## Vanilla (29 Sep 2006)

Oh dear, get an accountant! Money well spent.


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## Delber (29 Sep 2006)

Your tax isnt taken as part of the P & L as you are a sole trader but your figures still dont add up


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## CCOVICH (29 Sep 2006)

Delber said:


> Your tax isnt taken as part of the P & L as you are a sole trader but your figures still dont add up


 
Eh? Could you explain? It's still an expense, right?

If you leave it out of the p&l, where is the double entry (I presume it has to be reflected in either cash (if paid) or creditors (if unpaid)).


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## ubiquitous (29 Sep 2006)

Income tax paid is treated as being part of drawings in sole trader accounts. Double entry is normally to bank a/c

Outstanding income tax is not accrued in sole trader accounts.


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## CCOVICH (29 Sep 2006)

ubiquitous said:


> Income tax paid is treated as being part of drawings in sole trader accounts. Double entry is normally to bank a/c
> 
> Outstanding income tax is not accrued in sole trader accounts.


 
Thanks for the explanation.

Any reason for this treatment?


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## bazermc (29 Sep 2006)

CCOVICH said:


> Thanks for the explanation.
> 
> Any reason for this treatment?


 
Because income tax due by a sole trader is neither an expense nor a liability of the trade, as opposed to corporation tax payable by a company.

The income tax, if paid through the biz account, would be simply be credit bank and debit drawings/capital account.

Therefore the profit & loss would finish with net profit and this amount is transferred to the capital account as follows:

Capital acccount Opening balance
Plus Profit for the year
Less drawings incl tax payments/non business expenses etc....
Plus Capital Introdcued
Equals Closing balance


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## Pegasus (29 Sep 2006)

There's a hole in your Bank A/c 
Where did the other money go expenses, drawings and ........
You're not trading as Paddy The Plasterer are you?


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