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CA Intermediate · Advanced Accounting · Financial Statements of Companies

Meera Textiles Ltd. has 8,000 equity shares of Rs 100 each, Rs 100 called up, on which Rs 20 per share remains unpaid on the Balance Sheet date. The company has also received Rs 15,000 as calls-in-advance. How should the Rs 1,60,000 of calls unpaid be shown in the company's Balance Sheet (Schedule III, Division I)?

Calls unpaid of Rs 1,60,000 are deducted from subscribed and called-up share capital in the share capital note, as Schedule III requires. They are not treated as an asset or adjusted against reserves, and calls-in-advance is shown separately as an other current liability.

  1. AAs a deduction from subscribed and called-up share capital, shown as 'Calls unpaid' in the notesCorrect
  2. BAs a current asset under 'Other current assets'
  3. CAs a non-current asset under 'Other non-current assets'
  4. DAs a deduction from Other Equity (Reserves and Surplus)

Explanation

Under Schedule III, calls unpaid (other than by directors/officers) are deducted from the subscribed and called-up capital in the share capital note. They are not an asset. Showing them as an asset or deducting from reserves is wrong. Calls-in-advance is separately shown as a current liability (Other current liabilities), not netted here.

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