Statement of Financial Position (Balance Sheet) | Company #Finance

welcome to counters in this lesson we’re going to be looking at company statement of financial position or the Balance Sheet in one of our previous CashNews.cos we looked at how to do the Balance Sheet from the post adjustment trial balance we looked

at the simple Balance Sheet so you’d like to check that one out you can click on the link on the top right of the screen or in the description below but in this CashNews.co we’re specifically going to look at the statement of financial position for a company so here we

are given information and we are asked to do the statement of financial position as a 28th february 2010 so i’ve already drawn up the format of the statement of financial position and we just need to do what is required from the information here and plug in the amounts so let’s look at

number one we are told that the authorized shared Capital comprises of 1 million ordinary Shares at 2 000 per value each and by 28 february 2009 that is at the end of the previous financial year 600 ordinary Shares have been issued at pa value and

during the current financial year a further 200 000 Shares were issued at the premium of 70 cents each so a few things to note here there’s a difference between authorized share Capital and issued share Capital authorized share

Capital are the Shares which have been authorized by the company it’s the maximum amount of Shares that can be issued by a company and issued share Capital is the amount of of Capital or the amount of

Shares that has already been issued in other words it’s already held by shareholders so that is the difference between the authorized and the issued share Capital another thing to note here is the premium the premium if a share is issued at the premium that

means it’s issued at an amount over and above the path value so if they tell us that the premium is 70 cents each we are told that it was issued that means it was issued at 2 000 plus 70 cents each so it was issued at 270 cents each and when we record our share Capital or

ordinary share Capital we record them at par value and the share premium will be recorded separately so whenever we record our share Capital even though some of it will issue that the premium will record them at ordinary as per value and then we’ll record the

share premium so let’s see how do we record this it told told us that by 28 february 2009 600 united Shares have been issued at pa value so that’s six hundred thousand Shares times two rent age we’re told that during the current financial year a

further two hundred thousand Shares were issued at the premium of seventy cents each so to record the ordinary Shares it’s two hundred thousand rent 200 000 Shares times 200 each so to get the ordinary she has to take 600 000

Shares times 200 plus 200 000 Shares times children it gives us a total of one million six hundred thousand rand and that goes under Equity because that’s our ordinary share Capital so we put ordinary share

Capital under Equity one million six hundred thousand grand and then let’s record the share premium now we’re told that the two hundred thousand Shares which were issued during the current period we should have a premium of 70 cents

each so we’re going to take 200 000 Shares time is 70 cents gives us a total of 140 000 rand so we record that under Equity as well because it’s our share premium 140 000 let’s move on to number two we’re told that the following balances

appeared in the books on 28th february 2010 that is at the end of this period at which we are doing the statement of financial position so we are given london buildings that cost at 1.8 million rent so we know that london building is a non-current asset so we recorded under non-current asset

section so we could run london building 108 1.8 million rent we also told that equipment at cost 300 000 rent so we record equipment under non-current Assets because it’s a non-current asset so we’re going to cost 300 000 we hope that you are gaining value from this

lesson thus far to continue we charge a reasonable fee whereby the full link to the entire lesson will be provided our rates for the entire lesson are as follows if you are within south africa we charge a rate of hundred rand and if you are outside south africa we charge a rate of only 10 if you

wish to purchase the entire lesson together with the documents with the questions and answers that we used in this lesson you can contact us on our email as you can see here below info at counters.com or you can also check further contact details at our facebook page at facebook.com counters and

you’ll find this information in the description below as well see you on the entire CashNews.co cheers