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 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.
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