Share capital in balance sheet

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Andrea
Andrea Registered Posts: 15 New contributor 🐸
in AAT Level 4 (Level 8 in Scotland)
Im trying to do exercise 2.7 in the limited company accounts tutorial.

In the trial balance the only information Im given on shares is Ordinary shares of 25p each - £80,000 and Share premium account - £36,000. There is no additional information on shares.

So, on the balance sheet at the end, how do I know what to put for authorised share capital and issued share capital?

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  • peugeot
    peugeot Registered Posts: 624 Epic contributor 🐘
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    It will only be the issued share capital and the share premium account that goes into the balance sheet. The authorised share capital is the share capital that the company is authorised to issue but it is only the 'issued' share capital that goes in.

    Kind regards
    Steve
  • Andrea
    Andrea Registered Posts: 15 New contributor 🐸
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    Thanks. So I don't put nothing for authorised? Our teacher gave us a template balance sheet which shows the authorised share capital, but he did explain it was for information only
  • peugeot
    peugeot Registered Posts: 624 Epic contributor 🐘
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    The authorised share capital is simply what the company is authorised to issue to shareholders in accordance with its articles of association.

    Authorised share capital is generally disclosed as a note but you would only ever put issued share capital (i.e. what the company has actually issued to its shareholders) in the balance sheet, along with any share premium account (this represents the amount paid for the share over and above its nominal value).

    Kind regards
    Steve

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