Retained profit query

[xtiansugar]

Hi

I've just received my annual accounts for 2008 and I'm confused. To be honest I've never understood the accounts but as there was never any tax to pay before I just signed them off. However, this year my accountant informs me that there is a retained profit of nearly £50,000, £32,000 of it from this year. As we are a very small company with an annual turnover of only £100,000 I have no idea where the £50,000 has come from or for that matter where it has gone. We now have a corporation tax bill to pay but no money to pay it with. Last year we had sales of £91,000 and expenses of nearly £80,000 so how does that equate to £32,000 profit.

 

[elaine@cheapaccounting]

Hi

I've just received my annual accounts for 2008 and I'm confused. To be honest I've never understood the accounts but as there was never any tax to pay before I just signed them off. However, this year my accountant informs me that there is a retained profit of nearly £50,000, £32,000 of it from this year. As we are a very small company with an annual turnover of only £100,000 I have no idea where the £50,000 has come from or for that matter where it has gone. We now have a corporation tax bill to pay but no money to pay it with. Last year we had sales of £91,000 and expenses of nearly £80,000 so how does that equate to £32,000 profit.

Impossible to explain on here without seeing the figures.

this really is something you should ask your accountant.

 

[CassioAcc]

You need to ask your Accountant, but if you have the accounts you should be able to see the Sales and Expenses to arrive at the profit. There should also be a detailed breakdown of the expenses.

If you do not agree / understand the treatment then you should review the accounts with the accountant before you sign them off

 

[Maslins]

Last year we had sales of £91,000 and expenses of nearly £80,000 so how does that equate to £32,000 profit.

If this is true it might be worth checking the accounts cast (ie add up)!...but I imagine as you admit you don't understand accounts, you've probably missed something.

What about things like interest received, or do you have any other income such as dividends from other companies?

 

[UKSBD]

If you had £50,000 of profits one would assume you took big dividends
and low wages this year?

Did you take dividends out of the money that should have been put to one
side to pay corporation tax?

 

[MyAccountantOnline]

You would definately be best to go back to your accountant and ask them to explain things to you.

If you want to PM me with the figures I'd gladly have a look for you.