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Company Ledger Accounts

Grade 12 Company Accounts
by

debbie kerdachi

on 3 February 2017

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Transcript of Company Ledger Accounts

Unique Accounts for Companies
Recording the sale of shares:
Companies sell shares
Each share is given a price per share
Once the shares have been sold to the public the business must record the amount received as
capital
Recorded in the
CRJ
New Ledger account
ORDINARY SHARE CAPITAL
SHARE CAPITAL
AUTHORISED SHARE CAPITAL
ALL the shares that the company has available to be sold
They do not all need to be sold immediately
Authorised share capital can be sold later to raise additional capital.
INCOME TAX
Company is a
legal person
- pays tax to
SARS
The company provides for the
tax liability
for the year by making
PROVISIONAL PAYMENTS
At year end taxation is calculated and recorded
LEDGER ACCOUNTS FOR INCOME TAX
There are 2 new General Ledger accounts with regards to Income Tax

Income Tax
= the expense
SARS: Income Tax
= can be an asset or a liability

A company is required to make
Provisional Taxation

Payments during the year
Why? - so the company does not have a huge lump some to pay all at once and because profit is being made

There are
2 new transaction
to know how to record with regards to Taxation
The provisional payments (usually twice a year)
The income tax liability (at the end of the year)
DIVIDENDS
ISSUED SHARE CAPITAL
is the authorised shares that have been sold and for which money has been received.
http://www.sars.gov.za/
SARS: owes us this money as we have paid them in advance therefore
Debtor (+)
HLENGIWE HATS LTD has a financial year end on the 28th February. The following transactions took place during the first year of trading with regards to taxation:
1 September: The first provisional payment was made to SARS for R25 000
On the 27th February the second provisional tax payment was made
Dividends is the
share of the profit
that the
shareholders
receive
Dividends are usually expressed in cents per share.
Can be declared/paid twice during the year
middle of the year =
INTERIM
year end =
FINAL
Declared

and then paid later OR Declared and paid
NEW ACCOUNTS
1. DIVIDENDS ON ORDINARY SHARE - expense
all the dividends for the current year (interim and final)
2. SHAREHOLDERS FOR DIVIDENDS - liability
declared and still to be paid dividend
(usually the final dividend from previous year)
Note: that
bank is not effected
when we are recording the actual taxation for the year. We are recording the amount owed to SARS
After the year the Net profit amounted to R120 000. Taxation is calculated at 30% of taxable income
RECORD TAX AT YR END
E.G. The company is doing well the directors decided to declare and pay an interim dividend of 10c per share. Hlengiwe Ltd has ordinary share capital of 250 000 issued shares
INTERIM DIVIDENDS
Dividends on Ordinary Shares
Bank CPJ 25 000
Interim dividend paid during the year
FINAL DIVIDENDS
DIVIDENDS ON ORDINARY SHARES
Bank CPJ 25 000
A final dividend of 15c per share was declared
Shareholders for dividends GJ 37 500
SHAREHOLDERS FOR DIVIDENDS
Dividends on ordinary shares GJ 37 500
APPROPRIATION ACCOUNT
Income Tax
SARS: Income Tax GJ 36000
Appropriation GJ 36 000
DIVIDENDS ON ORDINARY SHARES
Bank 25 000
Shareholders for dividends 37 500
Appropriation GJ 62 500
APPROPRIATION ACCOUNT
Profit and Loss Account 120 000
Income Tax 36 000
Dividends on Ordinary Shares 62 500
Retained Income 21 500
RECORDING PROVISIONAL TAX PAYMENTS
The remaining profit that is left in the company - Retained Income is an Equity account
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