Following Information is given 
 

1. Incorporation date: 1st March 2022.

2. Accounting year end: 28th Feb 2023

3. Starting capital: £2.00 (called up but not paid; Two Directors/shareholders of company Mr HICKMAN & Mrs TRACY £1 each.

4. Business Description: BTL (Buy-To-Let business). It is not traditional type of selling of product/service business. Company is setup to buy property under LTD company and earn rental income tax effectively because current corporation tax rate is 19% (lower than personal income in UK).

5. In this 1st year ending, additional info on 24th Oct 2022

a. company purchased one property located in "Highland park" for a price £ 230,000.

b. Bank Loan (mortgage) financed 75% - Amount £17,250 (at 5% interest rate) + £230 added in loan principle as fee (interest free).

c. Rest amount + all expenses towards purchase paid by company as down payment. Detail breakup attached file "Property purchase completion.pdf"

6. After property purchase completed, it was let in to market for £925 per month rental income and tenants were paying on time in to company bank account.

7. What could be additional out of pocket reasonable expenses directors can include in financial statement for BTL business in addition mentioned item in Business bank account? You can add based on your research on this topic.

8. Provision for accounting fee to be made £600 as it is not been paid yet.

9. There was a security deposit received (2 months' rent) by agent and it was protected by them under 3rd party account called "DPS".

•Pass Journal entries for above considering all the adjustments.

Transcribed Image Text:

PAYMENTS PURCHASE PRICE ADD DISBURSEMENTS, RECHARGES AND EXPENSES (Inclusive of VAT where applicable) Local Search Winding-Up Search Companies House Registration Land Registry Search Fee English Stamp Duty" Land Registration Fees TOTAL PAYMENTS FEES Our Professional Legal Fees For Acting On Your Purchase Our Administration Fee For Processing 1 Electronic Bank Transfer Payment For You Our Administration Fee For Electronic Submission of Land Registration Application Our Administration Fee For Compliance With A Lenders Requirements In Relation To A Buy To Let Mortgage Our administration fee for your digital joumey Our administration fee for carrying out a lawyer check search against the other side's solicitors/conveyancers TOTAL FEES AND VAT TOTAL REQUIRED ON PURCHASE LESS Payments on Accounts received from you MORTGAGE ADVANCE The Mortgage Works (UK) Pic TOTAL RECEIPTS BALANCE DUE TO CLIENT Amount £615.20 £31.15 £75.00 £100.00 £35.00 £10.00 VAT £123.04 £8.23 £15.00 £20.00 £7.00 £2.00 £230000.00 £253.99 £8.88 £15.00 £3.00 £8900.00 £150.00 TOTAL £738.24 £37.38 £90.00 £120.00 £42.00 £12.00 £00171.00 £172480.00 £7331.47 £1039.62 £238651.09 £238371.09 £280.00 PAYMENTS PURCHASE PRICE ADD DISBURSEMENTS, RECHARGES AND EXPENSES (Inclusive of VAT where applicable) Local Search Winding-Up Search Companies House Registration Land Registry Search Fee English Stamp Duty" Land Registration Fees TOTAL PAYMENTS FEES Our Professional Legal Fees For Acting On Your Purchase Our Administration Fee For Processing 1 Electronic Bank Transfer Payment For You Our Administration Fee For Electronic Submission of Land Registration Application Our Administration Fee For Compliance With A Lenders Requirements In Relation To A Buy To Let Mortgage Our administration fee for your digital joumey Our administration fee for carrying out a lawyer check search against the other side's solicitors/conveyancers TOTAL FEES AND VAT TOTAL REQUIRED ON PURCHASE LESS Payments on Accounts received from you MORTGAGE ADVANCE The Mortgage Works (UK) Pic TOTAL RECEIPTS BALANCE DUE TO CLIENT Amount £615.20 £31.15 £75.00 £100.00 £35.00 £10.00 VAT £123.04 £8.23 £15.00 £20.00 £7.00 £2.00 £230000.00 £253.99 £8.88 £15.00 £3.00 £8900.00 £150.00 TOTAL £738.24 £37.38 £90.00 £120.00 £42.00 £12.00 £00171.00 £172480.00 £7331.47 £1039.62 £238651.09 £238371.09 £280.00 PAYMENTS PURCHASE PRICE ADD DISBURSEMENTS, RECHARGES AND EXPENSES (Inclusive of VAT where applicable) Local Search Winding-Up Search Companies House Registration Land Registry Search Fee English Stamp Duty" Land Registration Fees TOTAL PAYMENTS FEES Our Professional Legal Fees For Acting On Your Purchase Our Administration Fee For Processing 1 Electronic Bank Transfer Payment For You Our Administration Fee For Electronic Submission of Land Registration Application Our Administration Fee For Compliance With A Lenders Requirements In Relation To A Buy To Let Mortgage Our administration fee for your digital joumey Our administration fee for carrying out a lawyer check search against the other side's solicitors/conveyancers TOTAL FEES AND VAT TOTAL REQUIRED ON PURCHASE LESS Payments on Accounts received from you MORTGAGE ADVANCE The Mortgage Works (UK) Pic TOTAL RECEIPTS BALANCE DUE TO CLIENT Amount £615.20 £31.15 £75.00 £100.00 £35.00 £10.00 VAT £123.04 £8.23 £15.00 £20.00 £7.00 £2.00 £230000.00 £253.99 £8.88 £15.00 £3.00 £8900.00 £150.00 TOTAL £738.24 £37.38 £90.00 £120.00 £42.00 £12.00 £00171.00 £172480.00 £7331.47 £1039.62 £238651.09 £238371.09 £280.00 PAYMENTS PURCHASE PRICE ADD DISBURSEMENTS, RECHARGES AND EXPENSES (Inclusive of VAT where applicable) Local Search Winding-Up Search Companies House Registration Land Registry Search Fee English Stamp Duty" Land Registration Fees TOTAL PAYMENTS FEES Our Professional Legal Fees For Acting On Your Purchase Our Administration Fee For Processing 1 Electronic Bank Transfer Payment For You Our Administration Fee For Electronic Submission of Land Registration Application Our Administration Fee For Compliance With A Lenders Requirements In Relation To A Buy To Let Mortgage Our administration fee for your digital joumey Our administration fee for carrying out a lawyer check search against the other side's solicitors/conveyancers TOTAL FEES AND VAT TOTAL REQUIRED ON PURCHASE LESS Payments on Accounts received from you MORTGAGE ADVANCE The Mortgage Works (UK) Pic TOTAL RECEIPTS BALANCE DUE TO CLIENT Amount £615.20 £31.15 £75.00 £100.00 £35.00 £10.00 VAT £123.04 £8.23 £15.00 £20.00 £7.00 £2.00 £230000.00 £253.99 £8.88 £15.00 £3.00 £8900.00 £150.00 TOTAL £738.24 £37.38 £90.00 £120.00 £42.00 £12.00 £00171.00 £172480.00 £7331.47 £1039.62 £238651.09 £238371.09 £280.00

Answer rating: 100% (QA)

ANSWER JOURNAL ENTRIES Date Account Debit Credit Description Mar 1 2022 CashBank 200 Share capital called up but not paid Mar 1 2022 Share Capital 200 ... View the full answer