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CA Intermediate · Advanced Accounting · Financial Statements of Companies

Kaveri Foods Ltd. has trade payables of Rs 8,00,000 (all due within 12 months), the current maturity of a 10-year term loan from a bank of Rs 3,00,000, outstanding salaries of Rs 1,20,000, and provision for tax of Rs 2,50,000. Advance received from customers is Rs 70,000. Under Schedule III, what is the total of 'Current Liabilities' (including short-term provisions)?

Total current liabilities are Rs 15,40,000. Trade payables, current maturities of the long-term loan, outstanding salaries, customer advances and the provision for tax are all current items under Schedule III, and adding them gives this figure.

  1. ARs 15,40,000Correct
  2. BRs 14,70,000
  3. CRs 12,40,000
  4. DRs 12,70,000

Explanation

Current liabilities include trade payables 8,00,000, current maturities of long-term debt 3,00,000, other current liabilities such as outstanding salaries 1,20,000 and advances from customers 70,000, and short-term provisions 2,50,000. Total = 8,00,000 + 3,00,000 + 1,20,000 + 70,000 + 2,50,000 = Rs 15,40,000. Rs 12,40,000 wrongly excludes the current maturity of the term loan (3,00,000).

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