Question 14 of 19intermediate🔧 ApplyNumerical6 marks

Show the following items in the balance sheet as per the provisions of the companies Act, 2013 in Schedule III: Preliminary Expenses Rs. 2,40,000; Goodwill Rs. 30,000; Discount on issue of shares Rs. 20,000; Loose tools Rs. 12,000; 10% Debentures Rs. 2,00,000; Motor Vehicles Rs. 4,75,000; Stock in trade Rs. 1,40,000; Provision for tax Rs. 16,000; Cash at bank Rs. 1,35,000; Bills receivable Rs. 1,20,000.

Correct Answer

Balance Sheet as per Schedule III of the Companies Act, 2013

ParticularsNote No.Amount (Rs.)
I. Equity and Liabilities
1. Non-current Liabilities
a) Long-term borrowings12,00,000
2. Current Liabilities
a) Short-term provisions216,000
Total2,16,000
II. Assets
1. Non-current Assets
a) Fixed assets
i) Tangible assets34,75,000
ii) Intangible assets430,000
b) Other non-current assets52,60,000
2. Current Assets
a) Inventories61,52,000
b) Trade receivables1,20,000
c) Cash and cash equivalents1,35,000
Total11,72,000

Notes to Accounts

ParticularsAmount (Rs.)
1. Long-term borrowings:
10% Debentures2,00,000
2. Short-term provisions:
Provision for tax16,000
3. Tangible assets:
Motor Vehicles4,75,000
4. Intangible assets:
Goodwill30,000
5. Other non-current assets:
Preliminary Expenses2,40,000
Discount on issue of shares20,000
Total2,60,000
6. Inventories:
Stock in trade1,40,000
Loose tools12,000
Total1,52,000
Exercise: Numerical Questions | Q: 1 | (Page 25)
For More Understanding

Explanation

This question tests the student's understanding of classification of items in a Balance Sheet as per Schedule III of the Companies Act, 2013. The key classifications are: (1) Preliminary Expenses and Discount on issue of shares are shown under 'Other non-current assets' as they are fictitious assets; (2) Goodwill is an Intangible asset under Fixed assets; (3) Motor Vehicles is a Tangible asset under Fixed assets; (4) 10% Debentures is a Long-term borrowing under Non-current liabilities; (5) Provision for tax is a Short-term provision under Current liabilities; (6) Stock in trade and Loose tools are shown under Inventories in Current assets; (7) Bills receivable is Trade receivables under Current assets; (8) Cash at bank is Cash and cash equivalents under Current assets.

Solution Steps

  1. Step 1: Identify and classify all items into their respective heads - Assets (Non-current and Current) and Liabilities (Non-current and Current).

  2. Step 2: Under Non-current Assets - Fixed Assets: Tangible (Motor Vehicles Rs. 4,75,000), Intangible (Goodwill Rs. 30,000); Other non-current assets (Preliminary Expenses Rs. 2,40,000 + Discount on issue of shares Rs. 20,000 = Rs. 2,60,000).

  3. Step 3: Under Current Assets - Inventories (Stock in trade Rs. 1,40,000 + Loose tools Rs. 12,000 = Rs. 1,52,000); Trade receivables (Bills receivable Rs. 1,20,000); Cash and cash equivalents (Cash at bank Rs. 1,35,000).

  4. Step 4: Under Non-current Liabilities - Long-term borrowings (10% Debentures Rs. 2,00,000).

  5. Step 5: Under Current Liabilities - Short-term provisions (Provision for tax Rs. 16,000).

  6. Step 6: Present the Balance Sheet in the prescribed format with Notes to Accounts for detailed breakdown.

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