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General Accounting Discussions: share premium accounts and called up share capital

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  1.  
  1.  
    hi all, i am new to this site so be nice.
    I am wondering whether share premium accounts and called up share capital is classed as an asset or a liability and where they get recorded on a balance sheet.
    if someone could help i would be ever so grateful
    professionalmama
    • CommentAuthorneo
    • CommentTimeNov 13th 2007
     
    Hi Professionalmama,

    Share premium account and called up share capital are not assets nor liabilities. They are both equities and can be found in the Equity section of the balance sheet.

    I hope this could help.
    Thankful People: professionalmama
  3.  
    thank you that does help. if i have a called up share capital with this be subtracted or added? and the same for the share premium account do i add or subtract?

    i am doing a course in accounting and came across these two things but they are not explained

    any help would be gratefully recieved
    professionalmama
    • CommentAuthorneo
    • CommentTimeNov 15th 2007
     
    Both of them are to be added.
    Thankful People: professionalmama
  5.  
    sorry if im sounding stupid but is that after the capital account section and drawings?
    thanks neo u r a real big help
    • CommentAuthorneo
    • CommentTimeNov 15th 2007 edited
     
    Hi Professionalmama,

    Please don't think that way. Everyone had experienced being a beginner. It's ok to ask that to pretend that you know something you don't, right?

    The capital account and the drawings are the under the equity section that can be found in sole proprietorship and partnership.

    The share premium accounts and called up share capital account, however, are part of equity section of corporations.
    Thankful People: professionalmama
  7.  
    i think i understood that. If i was to do the balance sheet am i allowed to post it on here for you to see just so i can check my understanding?

    cheers,

    if you dont mind me asking how long have you been an accountant for (if you are)? and is it a worthwhile profession?
    • CommentAuthorneo
    • CommentTimeNov 16th 2007
     
    I think it's allowed.

    It's been 5 years now. It is a worthwhile profession especially when you enjoy dealing with numbers. In addition, there are many opportunities out there.

    I am encouraging you to continue the course. Actually, the problems (transactions) in real life are not as difficult as they seem in textbooks. (",)
    Thankful People: professionalmama
  9.  
    thankyou,
    and i love working with numbers hence wanting to go into the profession its just sometimes i feel its abit out of my league.

    i am doing the balance sheet as we speak (if i can complete the P & L statement )
    so i will post it when i am done
    thank you again you are a real help
    Thankful People: neo
    • CommentAuthorneo
    • CommentTimeNov 16th 2007
     
    No problem (",)

    I wish to thank you too.

    You may not know but it helps me too. This forum refreshes what I have learned before. I don't say I know everything; actually, this helps me to continuously learn.
  11.  
    Balance Sheet
    Cost accumulated depreciation NBV
    £ £ £
    Fixed Assets
    Office Fixture 17000 6700 10200
    and Fittings 17000 6700 10200


    Current Assets
    Stock 81400
    Debtors (18800-1300) 17500
    less provision for
    doubtful debts
    (18800-1300@4%=700) -700
    16800
    Prepayments 1700
    Bank 2940
    Cash 250
    =103090

    Current Liabilities
    Creditors 11390
    Accruals 1000
    -12390
    Net Current Assets 90700
    =100900

    Long term liabilities
    Bank Loan -10000
    =90900

    Capital account
    Opening Balance 26600
    Profit for the Year ?43300

    Called up shared capital 15000
    Share Premium account 6000
    =90900


    Well tahts what i came up with, not too sure about the profit amount, and obviously no lines as wouldnt insert them but hopefully you get the idea.
    Am i understanding you right, is that how it should look?
  12.  
    sorry layout went all messed up hopefully you can still understand it
    :)
    • CommentAuthorneo
    • CommentTimeNov 16th 2007
     
    Though it was messed up, I think I can still understand it. However, first, may I please know how far your course went.
    I mean, can you provide me with course desciption/title they already taught you. Thanks!
  14.  
    im not sure what details you are wanting but the course i am doing is the B680 - Certificate in accounting ( is a recognised certificate and i am in the first block which is financial accounting)
    hope thats what you are after
    • CommentAuthorneo
    • CommentTimeNov 17th 2007
     
    Hi Professionalmama,

    I was just curious how (what topic) your course started ( it seemed to me that you started on an intermediate topic).

    Anyway, your balance sheet is balance. However, the presentation is not proper.

    I found a link. I hope this could help you with the proper proforma (format).

    http://www.accountingcoach.com/online-accounting-course/05Xpg01.html
  16.  
    cheers neo, can i ask are you in the UK?
    as i dont understand what is wrong with the layout, is it my called up share capital and my share premium account?
    if not then it doesnt make sense as this is how ive been taught to lay it out
    • CommentAuthorneo
    • CommentTimeNov 18th 2007 edited
     
    Hi,

    Sorry but in not in UK. :( But I think that explains why you have different pro forma. I think UK has a standard pro forma differs from other contries. But I am not sure if all company does.

    May I please ask what kind of learning material they provided you (books, e-mail correspondence, pamphlet, etc.)

    I am just wondering if you could let it scan, upload in imageshack.com , then post the link here. It would really help us to make comparison.

    The only problem I have encounter with your balance sheet is the equity section.

    Opening Balance 26600 => this is no too detail. I wonder if it is pure Called up shared capital or it is the sum of Called up shared capital and Share Premium.
    Profit for the Year ?43300 => this should be closed in Retained Earnings Account.

    Are these account and figures arrived from transaction/s?
    Called up shared capital 15000
    Share Premium account 6000
  18.  
    hi neo,
    the things we get provided with is books and Computer software as it is a home learning course. the reason it seems so complex (intermediate) is because i haev to learn a 3-5 year course in 1 year, very fast learning.
    May i ask what would it be you would want me to scan in?
    i could scan in the basic layout of a balance sheet and then the question with all the details in it. would that be of any help?
    what we are given for this is a trial balance sheet then some written transactions that have not been included (adjustments i think) and we are to provide a balance sheet and a profit and loss account from this information.
    • CommentAuthorneo
    • CommentTimeNov 18th 2007
     
    The trial balance and the adjustments will do.
  20.  
    hi neo i have tried imageshack but my email hasnt come through.
    is there anywhere else i could put it for you to see?
  21.  
    it wont let me view the stuff i uploading as i need an email verification so i can set my password
    ???
    • CommentAuthorneo
    • CommentTimeNov 19th 2007 edited
     
    I am very sorry. I reread our conversation and found out that I made a mistake.

    I should have said imageshack.us. Sorry about that.

    Here's the link :D

    http://imageshack.us/

    Please do not put your e-mail address there. Please post the Direct link to image. Thanks!
  23.  
    image shack didnt work so tried photobucket, really hopes this works

    http://i243.photobucket.com/albums/ff277/dazz1979/IMG_0001.jpg
    http://i243.photobucket.com/albums/ff277/dazz1979/IMG_0002.jpg

    there all adjustments and the trial balnce

    let me know if it works
    • CommentAuthorneo
    • CommentTimeNov 19th 2007
     
    Does the balance sheet yoy provided is after adjustments or before adjustments.

    I am not yet finish with analysis because I am not used with the type of transactions but I think I can cope up.

    I can already see some difference with our balance. Initially we have difference with prepayments and stocks.

    May i please ask what 20p means? Is it 20/100 of a £1 ?

    You also missed the retained earnings in your BS. It is what you wrote "Opening Balance".

    The profit for the year should be closed in Retained Earnings.

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