Question

Zaika Foods Limited, a food chain company has certain items which have not yet been categorised according to the Schedule III of Companies Act, 2013:

Particulars	₹	Particulars	₹
Marketable Securities	90,000	Advance Tax	60,000
Equity Share Capital	6,00,000	Treasury Bills	50.000
9% Preference Share Capital	16,00,000	Bank Overdraft	30,000
Advance to Suppliers	1,75,000	Interest Due on Calls-in-Arrears	25,000
Patented Recipes	2,10,000	Money Received against Share Warrants	45,000
Capital Reserve	35,000	Investment in Government Securities with maturity period less than 12 months	1,15,000
Stock of Raw Material	1,25,000

Based on the above information, answer the following questions:

1. Money Received against Share Warrants is to be shown under ______.
   1. Non-current Liabilities.
   2. Current Assets.
   3. Current Liabilities.
   4. Shareholders’ Funds.
2. Identify an item from the options below which should be classified under Cash & Cash Equivalents in the Balance Sheet.
   1. Cash at Bank
   2. Bank Overdraft
   3. Investment in Government Securities with maturity period less than 12 months
   4. Marketable Securities
3. Current Investments are ______.
   1. ₹ 90,000.
   2. ₹ 1,40,000.
   3. ₹ 2,05,000.
   4. ₹ 25,000.
4. Patented Recipes are classified as ______.
   1. Current Assets.
   2. Shareholders’ Funds.
   3. Non-Current Assets.
   4. None of these.

Answer 1

1. Money Received against Share Warrants is to be shown under shareholders’ funds.
2. Cash at Bank
3. Current Investments are ₹ 2,05,000.
4. Patented Recipes are classified as Non-Current Assets.

Explanation:

A. It forms part of the owners’ equity. Schedule III displays it under Shareholders’ Funds.

B. A bank balance represents highly liquid money. It belongs under Cash and Cash Equivalents.

C. Marketable Securities = ₹ 90,000

Government Securities (12 months) =  ₹ 1,15,000

= ₹ 90,000 + ₹ 1,15,000

= ₹ 2,05,000

D. Recipes are long-term intangible assets. All long-term assets are non-current assets.