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Unit 13: Final Accounts for Companies
Figures Figures Figures Figures Notes
for the of the for the for the
previous Liabilities current previous Assets current
year ` year ` year ` year `
Share Capital Fixed Assets
Authorised ...... shares of ` each. Distinguishing as far as possible
Issued: (distinguishing between between expenditure upon:
the various classes of capital and (a) goodwill
stating the particular specified
(b) land
below, in respect of each class.)—
— shares of `———each. (c) buildings
(d) leaseholds
Subscribed: (distinguishing
between the various classes of (e) railways sidings
capital and stating the particular (f) plant and machinery
specified below, in respect of each
(g) furniture and fittings
class) — shares of ` — each ` ——
called up. (Of the above shares — (h) development of property
shares are allotted as fully paid (i) patents, trade marks and
up pursuant without payments designs
being received in cash). (j) livestock and
(Of the above shares —— shares (k) vehicles, etc.
are allotted as fully paid up
Under each head the original
pursuant to a contract without
cost and the additions thereto
payments being received in cash). and deductions therefrom
(Of the above shares —— shares
during the year, and the total
are allotted as fully paid up by
depreciation written off or
way of bonus shares).
provided up to the end of the
Specify the source from which year is be stated. Depreciation
bonus shares are issued e.g. written off or provided shall be
capitalization of profits or
allotted under the different
Reserve or from shares Premium
assets heads and deducted in
Account. arriving at the value of Fixed
Less: Calls unpaid Assets. [Also see note (11)] In
(i) By directors. every case where the original
cost cannot be ascertained,
(ii) By others.
without unreasonable expenses
Add: Forfeited shares: (Amount
or delay, the valuation shown
originally paid up) (Any capital by the books is to be given. For
profit on reissue of forfeited
the purpose of this paragraph
shares should be transferred to
such valuation shall be the net
Capital Reserve)
amount at which an asset stood
in the company’s books at the
commencement of this Act after
deduction of the amounts
previously provided or written
off for depreciation of
diminution in value, and where
any asset is sold, the amounts of
sale proceeds shall be shown as
deduction.
Notes: 1. Terms of redemption or Where sums have been written
conversion (if any) of any
off on a reduction of capital or a
redeemable preference capital are revaluation of assets, every
to be stated together with earliest balance sheet, (after the first
date of redemption or conversion.
balance sheet) subsequent to the
2. Particulars of any option on reduction or revaluation shall
unissued share capital are to be show the reduced figures with
specified. the date of the reduction in
3. Particulars of the different place of the original cost. Each
classes of preference shares are to balance sheet for the first five
be given. These particulars are to years subsequent to the date of
be given along with shares capital the reduction, shall show also
In the case of subsidiary the amount of the reduction
companies, the number of shares made.
held of the holding company as Similarly, where sums have
well as by the ultimate holding been added by written up the
company and its subsidiaries assets, every balance sheet
shall be separately stated in subsequent to such writing up
respect of subscribed share shall show the increased figure Contd...
capital. The auditor is not with the date of the increased in
required to certify the correctness place of the original cost. Each
of such share holding as certified balance sheet for the first five
by the management. years subsequent to the date of
the written up shall also show
LOVELY PROFESSIONAL UNIVERSITY 311
the amount of increase made.
Explanation: Nothing contained
in the preceding two paragraphs
shall apply to any adjustment
made in accordance with the
second paragraph.
Reserve and Surplus: Investment:
(1) Capital Reserve. Showing nature of investment
(2) Capital Redemption Reserve. and mode of valuation, for
example, cost or market value
(3) Shares Premium Account
and distinguishing between-
(showing details of its utilization
in the manner provided in Section (1) Investment in Government
78 in the year of utilization). or Trust Securities
(4) Other Reserve specifying the (2) Investment in shares,
nature of each Reserve and the debentures or bonds. (Showing
amount in respect thereof. separate shares fully paid up
and partly paid up and also
Less: Debit balance in profit and
loss account (if any). (The debit distinguishing the different
classes of shares and showing
balance in the Profit and Loss
also in similar detail, investment
Account shall be shown as a
in shares, debentures or bonds
deduction from the uncommitted
reserve, if any). details of subsidiary
companies).
(5) Surplus, i.e. balance in profit
(3) Immovable properties
and loss account after providing
for proposed allocations namely: (4) Balance of the investments in
Dividend Bonus or Reserve. the capital partnership firm.
(6) Proposed additions to (5) Balance of unutilized monies
Reserves. raised by issue. (Aggregate
amount of the company’s
(7) Sinking Funds (Additions and
deductions since last balance quoted investment and also the
market value thereof shall be
sheet to be shown, under each of
shown).
the specified heads. The word
‘Fund’ in relation to any (Aggregate amount of the
“Reserve” should be used only company’s unquoted
where such Reserve is specifically investments shall also be
represented by earmarked shown). (All unutilized monies
investments). out of issue must be separately
disclosed in the Balance Sheet of
the company) indicating the
manner in which such
unutilized funds have been
invested.
Secured Loans: Current Assets’ Loans
(1) Debentures and Advance:
(2) Loans and Advance from (A) Current Assets (1) Interest
Banks accrued in Investment (2) Store
(3) Loans and Advance from and spare paid (3) Loose Tools
Subsidiaries. (4) Stock-in-Trade (5) Work-in-
Progress [In respect of (2) and
(4) Other Loans and Advance
(Loans from directors and/or (4), mode of valuation of stock
manager should be shown shall be stated and the amount
in respect of raw materials shall
separately). Interest accrued and
also be stated separately where
due on Secured Loans should be
included under the appropriate practicable. Mode of valuation
of work-in-progress shall be
sub-heads under the head
stated].
“Secured Loans”.
(6) Sundry Debtors–(a) Debts
The nature of security to be
specified in each case. outstanding for a period
exceeding six months. (b) Other
Where loans have been debts Less: Provision (The
guaranteed by manager and/or amounts to be shown under
directors, a mountain thereof,
Sundry Debtors shall include
shall also be made and also the
the amount due in respect of
aggregate amount of such loans goods sold or service rendered
under each head. In case of
or in respect of other contractual
Debentures, terms of redemption
obligations but shall not include
or conversion (if any) are to be the amounts which are in the
stated together with earliest date
nature of loans or advances).
of redemption or conversion.
In regard to Sundry Debtors
Unsecured Loans:
particulars to be given
1. Fixed Deposits
separately of-
(2) Loans and Advance from (a) Debts considered good and
Subsidiaries.
in respect of which the company
(3) Short-term Loans and is fully secured.
Advance.
(b) Debts considered good for
(a) From Banks (b) From Others which the company holds no
(Short-term loans include those security other than the debtor’s
which are due for repayment not personal security; and
late than one year as at the date of (c) Debts considered doubtful or
the balance sheet). bad. Debts due by directors or
(4) Other Loans and Advance other officers of the company
(a) From Banks (b) From Others any of either severally or jointly
with any other person, or debts
(Loans from directors and/or
manager should be shown due by firms or private
separately). companies respectively in which
