Financial Statements of CompaniesSpecial features of company financial statements include:Profit and loss accountThe profit and loss account will be charged with directors’ remuneration and auditors’ remuneration. If the company has borrowings in the form of loan of debenture stock, the profit and loss account will be charged with interest. Company profits are assessable to corporation tax and the...
Monday, September 27, 2010
Sunday, September 19, 2010
(208)-DISSOLUTION OF PARTNERSHIPS
Dissolution of PartnershipsPresidential realization and interim distributionsWhen assets are realized piecemeal, the partners may desire, as soon as all liabilities have been discharged, to withdraw immediately such as is available for decision between them rather than wait until all the assets have been sold. In such circumstances, subject to any contrary agreement between the partners, the interim...
Friday, September 17, 2010
(207)-CONVERSION OF A PARTNERSHIP INTO A LIMITED COMPANY
Conversion of a Partnership into a Limited CompanyFrequently a private business is converted into a limited company. The partners give up their partnership stakes in exchange for shares in the company. This conversion is usually seen as a necessary stage of development of the growth of the business. A larger stage may see the conversion of the private company into a public limited company.Accounting...
Wednesday, September 15, 2010
(206)-THE RULE IN GARNER VERSUS MURRAY
The Rule in Garner versus MurrayThis is the situation where, on dissolution, a partner, capital account is in debt and he is unable to discharge his indebtedness.Prior to the decision in Garner versus Murray it was generally supposed that any loss occasioned by one of the partners of a firm being unable to make good a debit balance on his account should be borne by the remaining partners in the proportions...
Wednesday, September 8, 2010
(205)-ACCOUNTING FOR CLOSING PARTNERSHIP BOOKS ON DISSOLUTION
Accounting for Closing Partnership Books on DissolutionApart from special circumstances, the following outline of the steps necessary to close the books of a partnership when the assets are sold en bloc, may be found useful:Open a realization account, and debit there to the book value of the assets, crediting the various asset accounts. The realization account will also be debited with any expenses...
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