Pre incorporation expenses
This query is : Resolved
06 July 2014
Hai,
A company is incorporated on 13/11/2012. how can i treat the following items, paid in the month July 2012 , in P/L account and Balance Sheet?
1. rent paid for 6 months from July 2012 to Dec 2012 Rs 10800 each
2. rent deposit paid Rs 40000
3. electricity charges before incorporation months
4. advertisement expenses Rs 6000
5. Tally software charges, audit and inspection fee RS 39000
6. franchise fee Rs 100000
7. training and travelling expenses
8. registration and filing charges of MoA, AoA and Form Rs 7355
Pls help me
A company is incorporated on 13/11/2012. how can i treat the following items, paid in the month July 2012 , in P/L account and Balance Sheet?
1. rent paid for 6 months from July 2012 to Dec 2012 Rs 10800 each
2. rent deposit paid Rs 40000
3. electricity charges before incorporation months
4. advertisement expenses Rs 6000
5. Tally software charges, audit and inspection fee RS 39000
6. franchise fee Rs 100000
7. training and travelling expenses
8. registration and filing charges of MoA, AoA and Form Rs 7355
Pls help me
CA Mohit Bansal
(Expert)
06 July 2014
Expenses incurred prior to formation of Company are to be treated as preliminary expenses(In asset side of Balance Sheet) and has to be amortised in next five F.Y. Hence following will be recognised in above heads:
1. Rent paid for the period July to 12/11/2012
2. Rent Deposit is an asset and not an expenditure hence will be shown under deposit and advances in B/s
Rest all are to be treated as preliminary expenses (same as above) in totality
1. Rent paid for the period July to 12/11/2012
2. Rent Deposit is an asset and not an expenditure hence will be shown under deposit and advances in B/s
Rest all are to be treated as preliminary expenses (same as above) in totality
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