Financial Statements of a Company — Part 2: Classifying Items, Notes, the Balance Sheet and the Statement of Profit and Loss: visual lesson, CBSE Class 12 Accountancy

Lesson

Preparing the statements

Part 2 — share capital, reserves and surplus, the tricky items, notes to accounts, the balance sheet and the Statement of Profit and Loss.

In this lesson you will

Present share capital and reserves and surplus with notes to accounts
Classify liabilities and assets under the correct major heads and sub-heads
Prepare a balance sheet with notes from a list of balances
Prepare a simple Statement of Profit and Loss with notes

Part 2 at a glance

Concept

Share capital: from authorised to paid-up

Authorised and issued capital are shown in the note for information only.
Term	Meaning
Authorised capital	The maximum capital the company may issue, as stated in its memorandum
Issued capital	The part offered to the public or others for subscription
Subscribed capital	The part actually taken up by subscribers
Called-up capital	The part of subscribed capital that has been demanded
Paid-up capital	Called-up capital less calls in arrears: the figure on the balance sheet

Worked example

Worked example 3: the share capital note

An imagined company, Tapti Textiles Ltd, Surat: authorised 2,00,000 equity shares of ₹10 each; issued 1,50,000; subscribed 1,40,000, all fully called up. A holder of 2,000 shares has not paid the final call of ₹3 per share.

Calls in arrears = 2,000 × ₹3 = ₹6,000.
Paid-up = 14,00,000 − 6,000 = ₹13,94,000.

Share Capital on the balance sheet: ₹13,94,000.
Note No.	Particulars	₹
1	Share Capital
	Authorised capital: 2,00,000 equity shares of ₹10 each	20,00,000
	Issued capital: 1,50,000 equity shares of ₹10 each	15,00,000
	Subscribed capital: subscribed and fully paid — 1,38,000 equity shares of ₹10 each	13,80,000
	Subscribed capital: subscribed but not fully paid — 2,000 equity shares of ₹10 each, fully called up	20,000
	Less: Calls in arrears	(6,000)
	Total	13,94,000

Cookies