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

Answer 1

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