Ltd Company Accounts, Capital Introduced

[sarahsarah]

Hi

Just need some guidance.

I set up my own company just over a year ago.

I invested initally £15000 into it which paid for equipment, software, hardware etc.

Initially I created abank ac**** entry in nominal ledger and posted all receipts for purchases etc into this account, so I was personally paying for items to fund startup. money was being received at this point but all income etc was being deposited into business bank account.

So in total just under £15000 was invested personally, how do I account for this in Sage Accounts. I have been told to use nominal codes in 3000 range but just unsure how to actual post these.

I was not planning on adding this as a loan as such but as cash investment with via to repay potentially after 36 months of trading. The idea was to have this as non repayment investment rather than directors loan as such but not sure where or how to post this in ledger

Anyone want to help guide me in right direction

thanks

Sarah

 

[Scalloway]

These items should be included as a directors loan. 3XXX area sounds right. The only other option is to issue yourself with shares which I would consider to be an overcomplicated option.

 

[sarahsarah]

So how would I input.

I currently have bank aco**** I created for purpose under 1202 which all receipts for purchases bought with my own funds have been allocated to.

This currently gives £12316.89 as a credit within Sage

There are further transactions needed to input which give a grand total of £14989 which will be shown as credit on nominal ledger.

So I need to input the £15000 into Sage to account for Bank Account figure under 1202 using 3xxx range but not sure which one or exactly how to show this using journal entry.

Is £15000 a credit under say 3001 and debit this against 1202.

I was told by someone else to use 2000 range as this classes as directors loan but I am not going to draw against this money.

 

[Scalloway]

If it is in a Bank Account type ledger code you can transfer the money by doing a Bank Payment from it to the loan code. Remember to code it to T9 if the company is VAT registered - you will have already accounted for any VAT.

Further expenditure can be input by Journal Entry

Dr Expenditure code
Cr Directors Loan

Remember to post any reclaimable VAT.

There are two options for this - loan or share capital. Issuing shares is un-necessarly complicated in my opinion.

Having a directors loan account is much more simple. You just add to it as you spend without any further paperwork. Also should you need to draw funds from the company you can withdraw from it with no tax consequences.

 

[MyAccountantOnline]

If you only use this account as a directors loan account their isnt really any need to change it - I'd just explain to your accountants its a directors loan when they have your records to prepare the accounts. You could change the account name to make it clear.

 

[sarahsarah]

cheers people understand and inputted into accounts now and all looks fine in balance sheet.

One further question, slightly off topic

I made couple of mistakes at beginnning of year when it came to online sales

When item sold the item sale value went in 4000 range but postal cost of sale went in 5000 range.

I now have niggly issue that I have £252 in nominal code 5103 whereas it shouls actually be classed as a sale and go under 4905.

I have looked at doing a journal entry but i would need to credit 5103 Purchase Charges to clear the extra from there and in turn also need to credt my Other Sales 4905 with same amount, problem is journal entry requires double entry debit and credit and in this case I cant do it.

So basically need to decrease my overall purchases by £252 and increase overall sales by that amount

does anyone know how to go about this

 

[Scalloway]

You should be able to go into Corrections on Sage and change the codes there.

 

[sarahsarah]

You should be able to go into Corrections on Sage and change the codes there.

Hi

Looked at doing it that way but most are reconciled with VAT and there are 90 in total.

The VAT element has already been actioned as i did an amendment to my previous quarters VAT Return once mistake had been noted. Just dong admin part to rectify . i was intending on adding a couple of journal entries under T9 or T0 to put figures right but cant seem to get totals to add up. The way i am looking at it is to credit both the 5000 and 4000 ranges, as doing debit and credit across them both doesnt give right figures

 

[Scalloway]

cheers people understand and inputted into accounts now and all looks fine in balance sheet.

One further question, slightly off topic

I made couple of mistakes at beginnning of year when it came to online sales

When item sold the item sale value went in 4000 range but postal cost of sale went in 5000 range.

I now have niggly issue that I have £252 in nominal code 5103 whereas it shouls actually be classed as a sale and go under 4905.

I have looked at doing a journal entry but i would need to credit 5103 Purchase Charges to clear the extra from there and in turn also need to credt my Other Sales 4905 with same amount, problem is journal entry requires double entry debit and credit and in this case I cant do it.

So basically need to decrease my overall purchases by £252 and increase overall sales by that amount

does anyone know how to go about this

If you are meaning you charged your customers £252 for sending goods out but it went to purchases by mistake then this is the entry

Dr 4905....£252.00
Cr 5103....£252.00

 

[David Griffiths]

I now have niggly issue that I have £252 in nominal code 5103 whereas it shouls actually be classed as a sale and go under 4905.

I have looked at doing a journal entry but i would need to credit 5103 Purchase Charges to clear the extra from there and in turn also need to credt my Other Sales 4905 with same amount, problem is journal entry requires double entry debit and credit and in this case I cant do it.

So basically need to decrease my overall purchases by £252 and increase overall sales by that amount

does anyone know how to go about this

You debit (not credit) 5103 and credit 4905 giving you a balanced journal

Journals have their uses but if you don't know what you are doing you can create a terrible mess. With respect, given your question, I'm not sure that you do understand what you are doing and perhaps shouldn't be using journals?

 

[sarahsarah]

I do understand which is hence the question I asked.

Adding journal entries means you need to end up with a zero balance hence debit of £50 means you need to credit £50

My question was

When I first setup invoicing I used wrong nominal codes for sales. Any postage went into 5000 range for purchase charges for distribution as a sale rather than in the correct 4000 range.

This means I have £252 allocated incorrectly. It may only be a small amount but still it is incorrect.

I have a debit in 5103 which contains the £252 that needs to go inot 4905 where there is a credit showing, hence as its sales.

I know I cant do a journal entry as to credit 4905 which is what i need to do means I would have to debit 5103 but this will make value even higher, tried already.

So basically I am asking I need to reduce purchase charges by £252 and increase sales charges by same amount, using journal does not work.

And both replies state the opposite so looks like others arent too sure either

 

[Scalloway]

I can't see why this journal does not work

Dr 4905....£252.00
Cr 5103....£252.00

Crediting 5103 removes the debit balance. Debiting 4905 removes the credit balance there.

The only thing I can think of is to check the date of the journal entry. It will default to the current date but you need to change it to reflect the period when the erroneous entries took place.