Question

Prepare the format of balance sheet and explain the various elements of balance sheet.

Answer 1

COMPANY'S BALANCE SHEET- As per REVISED SCHEDULE VI

Name of the Company... BALANCE SHEET as at...
Particulars	Note No.	Figures as at the end of Current Year	Figures as at the end of the Previous Year
I. EQUITY AND LIABILITIES
(1) Shareholders’ Funds
(a) Share Capital
(b) Reserves and Surplus
(c) Money received against Share Warrants
(2) Share Application Money Pending Allotment
(3) Non-Current Liabilities
(a) Long-Term Borrowings
(b) Deferred Tax Liabilities (Net)
(c) Other Long-Term Liabilities
(d) Long-Term Provisions
(4) Current Liabilities
(a) Short-Term Borrowings
(b) Trade Payables
(c) Other Current Liabilities
(d) Short-Term Provision
TOTAL
II. ASSETS
(1) Non-Current Assets
(a) Fixed Assets
(i) Tangible Assets
(ii) Intangible Assets
(iii) Capital Work-in-Progress
(iv) Intangible assets under development
(b) Non-Current Investments
(c) Deferred tax assets (net)
(d) Long-Term Loans and Advances
(e) Other Non-Current Assets
(2) Current Assets
(a) Current Investments
(b) Inventories
(c) Trade Receivables
(d) Cash and Cash Equivalents
(e) Short-Term Loans and Advances
(f) Other Current Assets
TOTAL

Items under the head Equity and Liabilities

1. Shareholders’ Funds

1. Share Capital:
   1. Authorised Capital-
   2. Issued Share Capital-
   3. Subscribed Share Capital-
   4. Called-up Share Capital-
   5. Paid-up Share Capital-
   6. Share Forfeiture Amount

2. Reserves and Surplus: It consists of the following items to be shown separately.
   1. Capital Reserve
   2. Capital Redemption Reserve
   3. Securities Premium
   4. Debenture Redemption Reserve
   5. Revaluation Reserve
   6. Other Reserves (such as General Reserve, Tax reserve, etc.)
   7. Proposed Additions to Reserves
   8. Sinking Fund
   9. Share Option Outstanding Amount
   10. Surplus i.e. credit balance in Statement of Profit and Loss. However, in case of debit balance in Statement of Profit and Loss, it is deducted from the total of reserves.

3. Money received against warrants: A financial instrument that allows its holder to acquire equity shares is known as Share Warrant. Any amount received by the company on such share warrants is required to be disclosed under this head.

2. Share Application Money Pending Allotment

Amount received by the company on application of shares issued and the allotment on which is to be received after the date of balance sheet is shown under this head separately.

3. Non-Current Liabilities

These are comprised of the following items.

1. Long-Term Borrowings- It is further consists of the given below items.

• Debentures
• Bonds
• Term Loans from bank as well as from other parties
• Deposits
• Other Loans and Advances

2. Deferred Tax Liabilities (Net)
3. Other Long-Term Liabilities
4. Long-Term Provisions

4. Current Liabilities

Under this head the following items are disclosed.

1. Short-term Liabilities- It is further comprised of the given below items.

• Loan repayable on demands from bank as well as from other parties
• Deposits
• Other Loans and Advances

2. Trade Payables
3. Other Current Liabilities- It includes all those liabilities that are not covered in any of the mentioned above heads. Some examples are-

• Income received in advance
• Interest accrued but not due on borrowings
• Interest accrued and due on borrowings
• Unpaid Dividends
• Calls-in-Advance and interest thereon
• Other Payables etc.

4. Short-term Provisions- These are categorised as follows.

• Provision for Doubtful Debts
• Proposed Dividend
• Provision for Tax
• Provision for Employees Benefits
• Others

Items under the head Assets

Non-Current Assets and Current Assets are two titles that come under the heading of Assets.

1. Non-Current Assets

1. Fixed Assets- These are further classified s follows.

• Tangible Assets (such as, Building, Machinery, Furniture, etc.)
• Intangible Assets (such as Goodwill, Trademark, Copyrights, Mining Rights, etc.)
• Capital Work-in-Progress
• Intangible Assets under development

2. Non-current Investments- These are the investments that are not held for the purpose of resale.
3. Deferred Tax Assets
4. Long-term Loans and Advances
5. Other Non-Current Assets

2. Current Assets

Under this head the following items are shown.

1. Current Investments- Investments that are held for conversion into cash within a period of 12 months. These are further classified as follows.

• Investment in Equity Shares
• Investment in Preference Shares
• Investment in Government or Trust Securities
• Investment in Debentures or Bonds
• Investment in Mutual Funds
• Investment in Partnership Firms
• Other Investments

2. Inventories- It comprised of the given items.

• Raw Materials
• Work-in-Progress
• Finished Goods
• Stock-in-Trade (goods acquired for trading)
• Stores and Spares
• Loose Tools

3. Trade Receivables
4. Cash and Cash Equivalents- These are classified as follows.

• Cash on Hand
• Balances with Banks
• Cheques, Drafts on Hand
• Others

5. Short-term Loans and Advances
6. Other Current Assets (such as prepaid expenses, advance taxes, etc.)