134
P.35
BI.U
2.36
Uncalled capital of Co. ehould not be shown as an asset or
In my opinion it
11ability.
It is more than bad accounting.
is misleading, in any case it is very bad socounting. Ex. J is
application form for shares. Agreement to pay deposit is left
blank. I am aware that articles of bank provide that not less
than 5% of nominal value on shares shall be paid on applica-
tion.
Ex. J might be fair offer to take shares in accordance with
whatever terms of Articles might provide. And if accepted by
Co. might be good contract to take shares.
Allotment usually consists of sending letter accepting offer
to take shares. If it is returned to Co., there is then
contract to take shares. If there is contract to take shares
there is allotment, so far as I know. In that case no further
process would be necessary so far as I know, and presumably
shareholder would be liable for calls when made.
There is nothing in books of Instone Banking Corporation to
show that those offers (Ex.) were not accepted by Co. On
contrary books of Co. treat them originally as having been
acospted it was in share capital. If then these shareholders
were legally liable to pay calls it cannot be said to be
untrue to put them in balance sheet as called Capital.
10% on unalloted shares included in accounts Receivable. Ex.U
Shareholders ledger on f.ll shows each of shareholders debited
with unount payable on allotment c his shans but it is
written back 1.e. transferred to Allotment Suspense A/c again
before the close of the year. If shreholders were liable in
law to pay these amounts on allotment these amounts were debts
due to Co. I say entry is false because shares have not been
alloted. If shares have been alloted it is not false, though
statement is still misleading.
If money is due it is not
false merely misleading.
Remanded 2.15, 17.12.