Urgent - accounts

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sweta (Querist)
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12 September 2011 Dear All,

Kindly refer to the case below:

A private limited concern has authorised capital of Rs. 50 lakhs. It has also been incorporated with paid - up capital of Rs. 50 lakhs (by mistake).

Now, the situation is that it has to prepare its balance sheet for the first year. It has paid - up Capital of Rs. 50 lakhs on Liabilities side. What and how can the Company prepare its balance sheet? What items can it show on Assets side? What will be the correct accounting procedure?

It has not deposited the Paid -up capital entire amount in the Bank. It has just deposited Rs. 1 lakh.

Please help me out. It is a bit urgent.

Warm Regards

Sweta Todi
M.Com, A.C.S
9833189497

CA. Nitin Agrawal

CA. Nitin Agrawal (Expert)
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12 September 2011 Dear Swati

In the case you have mentioned, its clear that the share is issued in cash to the extent of Rs 49.00 Lacs.

Following is the draft B/s:
A. ASSETS SIDE:
Bank A/c Balance Rs 1.00 Lacs
Cash Balance Rs 49.00 Lacs

B. LIABILITIES SIDE:
Issued & Subscribed Share Cap Rs 50.00 Lacs

Now cheers

sweta

sweta (Querist)
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13 September 2011 Dear Nitin,

Please know that the Company has not issued shares as yet. By mistake it was mentioned in incorporation form subscribed capital to be Rs. 50 lakhs. Further, form 22B for beneficial interest is also filed. So, paid - up capital is shown as 50 lakhs.

The Company has not issued share certificates to the promoters as yet. So, now what will be the treatment as per accounting standards. The Company has undertaken certain projects of Rs. 10 lakhs or so but what about the remaining amount how will it be shown in Balance Sheet.

Please advice urgently.

Warm Regards,
Sweta Todi
M.Com, A.C.S
9833189497