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20.
22
What are the two?.
Yu Keo Man 43,612.00 and Kwon Hoi Tin $9,648.00. It is a debt due to the Company according to the books and is on my list.
His Lordship: lir. Brewer i
/the
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A
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23
or
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BY COURT
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Your figures and Mr. Ross' very nearly agree I am not sure, I an pointing out the figureB given on the liquidation You have heard the explanation given in the Fublic Examination as to why items were entered in the books?.
I cannot remember it.
(Mr. Brewer read the explanation - page 39 of his
Publio lixamination).
You informed us yesterday that there was nothing in the books contrary to that explanation. Assuming that to be the legitimate desire of the Directors of the firm, is there anything in the booka to contradict the fact that they had been so entered?.
I think the fact that at the time they made these loans, the Company had only received about §27,000. oo on account of Capital. I think it rather up- sets the argument here. You had to pay $90,000.00 for your building and you had only received $27,000 00 on account of capital at the time you made these loans.
I said, my question was, assuming that the managers desired to refuse anything beyond this 10%, as they stated, unless the person paying the excess re-borrowed it and stated their reasons, I assume that is a legitimate statement. Is there anything] contradictory in the books to the fact that they had followed this line?.
No.
Assuming that it is the desire of the bookkeeper to obey the orders and followed this plan, can you suggest any way of doing it, other than paying it into the cash account as it wan done?.
No
And assuming that these items have been paid into the cash account, muld it be justifiable in your opinion, for the person making out the Statutory Report, to deny that money as coming in cash, and naming a lesser sum as being received?.
Yes.
in the event of the Commany's Statutory Report having named the cash received at the figure you stated, $50,000.00 odd, cash as having been receiva how could the Company have explained its serkkur claim against individuals against whom it purported
to have loaned &793,000.00 odd?.
You are asking me to assume a fictitious entry in the books,
It is not a fictitious entry. The Direct or s purported to make loans and they had to show the entry in the Certificate, how could they otherwise have shewn it?.
The whole transaction appears to me to be fictitiou and i cannot say how I would do it.
I cannot help feeling that you as a Chartered Accountant should be able to make an answer. There mist be some true way, and if there is, what is it? If a Company makes loans when it has not the cash to make loans, it seems to me that the entries are fictitious.
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