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What will be the accounting treatment in case of strike off of company

25 May 2021

Suppose co. X is going for strike off. All the liabilities have been paid. The balance sheet stands as follow

Equity Share Capital - 100000
Misc exp not written off - 82500
Bank Balance - 17500
The bank balance of 17500 will be utilised for mca striking off charges. how will we close the books of company as well as shareholder? Can the company go for strike off?

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7 Replies

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 27 May 2021

Use realisation accounts treatment

SMRITI SHARMA (23 Points)
Replied 28 May 2021

I have not cleared all the obligations the bank balance is 17500. in the question 15000 is incorrect. Misc exp not written off is 82500 which makes my asset side total - 100000 . Now if I go for strike off 17500 is kept in bank for mca charges, so my question is my if I go by realisation method then the entries will be
esc a/c ... dr 100000
to realisation a/c 100000

realisation a/c .. dr 100000
to misc exp not written off 82500
to pnl ac (mca charges) 17500

mca charges a/c. 17500
to bank 17500

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 28 May 2021

Misc expenses are liability if not payed - payables... can’t be on the asset side.

If it is some asset, then your owner realised nothing, no loss or profits.

SMRITI SHARMA (23 Points)
Replied 28 May 2021

Misc exp are expenses that have been incurred but not written off

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 28 May 2021

Fine... it’s an accounting technique in b.com maybe. Usually they are called as capitalised expenses at a higher level. Misc expenses also fall under imprest accounting which is shown in profit and loss. So your correct.

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 28 May 2021

Please low this: https://commerceiets.com/realisation-account/

To be more accurately in determining true profit or loss, the capitalisation must stop and that amount should be taken to debit side of realisation account. (Outstanding expenses)

then you have excess of debit balance, which is a nominal balance- debit all expenses and losses.

So the owner is at a loss.

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 16 September 2021

Hi, can you please tell me if you have put that strike off charges into STK2 form under misc, exp ness not written off? Some other personal n was asking me the same question.