Bail as before.
Sd.
A.G. Granthan
P.M. 16.12.
P.37
Deft in Court.
135
As before.
bth witness I X continued.
Collateral Security Loans are based almost wholly on forms
Ex.I signed by shareholders.
Those forms were definite
★ A debt due
to a Co. is an asser. because it is worth something.
P.38
promises to pay. If they were valid debts they were not
asrets because they were not realisable,
X
bad
A debt is not
A
because it is not worth anything. They are described
collateral security loans - by which I understand additional
security. A lien on the shareholders'a shares is not
security in my opinion.
If a lien on shares is security in
low I agree that these loana are secured. On same assumption
this entry would be verbally correct, though as the debts
are worth nothing as an asset the entry in balance sheet is
inaccurate. I don't know that any money has been collected
on these loans by the Official Receiver,
On other side of balance sheet these sums appear in paid up
capital. In my opinion it was not put in balance sheet
merely to make the balance sheet balance.
But if books of
Co. had been kept correctly items would naturally appear in
balance sheet, as otherwise it would not balance.
word 'collateral security' is commonly used as meaning
security only.
Item Issued & Subscribed Capital.
according to books was $1,474,000.
Issued capital
The entry was correctly
described if the application forms, x., were good applica-
tions for shares, and if the application money had been
received, but from an auditor's point of view $2,613,260 was
not subscribed capital. By subscribed as opposed to issue d
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