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CA Intermediate · Advanced Accounting · Financial Statements of Companies

Meghdoot Ltd. is preparing its balance sheet at 31 March 2026. Its term loan from a bank of Rs 40,00,000 carries repayment in four equal annual instalments of Rs 10,00,000, the first falling due on 30 September 2026. It also has Rs 6,00,000 of trade payables due in 60 days and Rs 3,00,000 of provision for gratuity payable to employees who retire within the next 12 months. Based on Schedule III classification, what amount will be shown under current liabilities for the term loan and these items together?

The current liabilities total Rs 19,00,000. Only the instalment of the term loan due within twelve months, Rs 10,00,000, is current; adding trade payables of Rs 6,00,000 and the short-term gratuity provision of Rs 3,00,000 gives Rs 19,00,000.

  1. ARs 19,00,000Correct
  2. BRs 9,00,000
  3. CRs 49,00,000
  4. DRs 16,00,000

Explanation

The portion of the term loan payable within 12 months (Rs 10,00,000) is shown as 'current maturities of long-term debt' under other current liabilities. Add trade payables Rs 6,00,000 and short-term provision Rs 3,00,000: 10 + 6 + 3 = Rs 19,00,000. Rs 49,00,000 wrongly includes the whole loan as current.

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