50.
52
A.
A. น.
A.
A.
49
A.
4.
A.
39
A.
Assuming the Company's object in these transactions to have been to convert uncalled capital into loans payable on demand, were these transactions properly dealt with in the books, in your opinion?,
The cases I tested, yes.
which would you consider a better asset for the Company to possesa, uncalled capital or such promises to pay on demand?.
I would take the latter, these promises to pay. You consider those promises to pay on demand better asset than uncalled capital?,
Yes.
is the following a reasonable plan in your opinion, for the manager of the firm to permit the share- holders to pay, not only the 10% called up, but also
the money uncalled, and then suggesting that the shar aholder himself make use of that money on be- half of the sank, by reborrowing it putting the manager in a position where he could immediately recall up that money and at the came time prevent the ank from losing interest on uncalled capital?. it 18 a long question. I would say this, either as a Decretary, Auditor or manager of a concern, that if i could get security for my uncalled capit- el in a form that i could command at any moment, I would rather have that than uncalled capital. I think that has answered the question, but I shoul like to make it quite clear. The point which has just been put into evidence, is, that the plan the Company was adopting was to permit not only 10% to b
called up to be paid but also the 90% to be paid and borrowed and to be repaid on demand. well I have got to say year.
If you found that a manager has adopted such a plan and assuming that he had acted in the firm' best interests, would you pass it?.
Seeing that the company had accepted and allotted shares from different people, I ɛay this, that the security would be greater by transferring their uncalled capital to a Dills neceivable account and 1 would certainly say that the Manager had done service in the interests of the Company.
And you would see no grounds for expecting any ulterior motive”.
No, I would not see any ulterior motive. Will you look at the letter for application for loane, You know what that purports to be?.
Xe8.
·
You see the first part of it is an application for the loan which has been accepted by the Company, below the receipt for the sum of money involved, signed by the sank, So on the face of this docu- ment the man has applied for a loan which has been granted and he has received the money?, That is my interpretation of it.
Assuming the people to be existing people of mature age, would you go so far as to say these transactic are correctly treated as cash?.
I say this, I looked at the firm's books and I find the the account of william Jones in debit to a certain mum amount of share capital, something occu the Directors are permitted to transfer that debt from Share Capital Account and credit share Capital Account and make it fully paid up and transfer that debt to Loan Account. A cash transaction did take place. It could be done in another way by the ex-
change of cheques. fransferring the different