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Question
Under which major headings and sub-headings will the following items be shown in the Balance Sheet of a company as per Schedule VI Part I of the Companies Act, 1956 :
(i) Cheques in hand.
(ii) A stock of work-in-progress.
(iii) Copyrights.
(iv) Loose tools.
(v) Provision for bad debts.
(vi) The negative balance is shown by the Statement of Profit and Loss.
(vii) Bonds.
(viii) Unpaid dividend
Solution
| S.No | Items | Effect | Explanation |
| 1 | Redeemed 9% debentures of Rs 1,00,000 at a premium of 10% | Decrease | Current liabilities remain unchanged but current assets are decreased because of outflow of cash. |
| 2 | Received from debtors Rs 17,000. | No Change | Both debtors and cash/bank are current assets, so increase and decrease in current assets by the same amount leaves current ratio unaffected |
| 3 | Issued Rs 2,00,000 equity shares to the vendors of machinery. | No Change | Since non-current assets and non-current liabilities are increased by the same amount and have no effect on current assets and current liabilities. Therefore, the current ratio remains the same i.e. 2.1:1.2. |
| 4 | Accepted bills of exchange drawn by the creditors It is 7,000. | No Change | Here, only one current liability is converting into another current liability (i.e. creditors into bills payable). Thus, the current ratio remains unaffected |
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| Additional Information | Amit (₹) | Iqbal (₹) |
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