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CA Foundation · Accounting · Company Accounts

Under Schedule III, how should 'Calls-in-arrears' of ₹20,000 on equity shares be presented in the Balance Sheet?

Calls-in-arrears are deducted from subscribed capital so that the Balance Sheet shows the paid-up amount. They are not treated as an asset, investment or reserve, because they represent unpaid share money rather than a separate resource of the company.

  1. AAs a current asset under Other current assets
  2. BAs a deduction from Subscribed and paid-up capitalCorrect
  3. CAs an addition to Reserves and Surplus
  4. DAs a non-current investment

Explanation

Calls-in-arrears are amounts called but not yet paid by shareholders. Schedule III requires them to be shown as a deduction from subscribed capital so that only paid-up capital is reported. Showing them as an asset is incorrect because it overstates both capital and assets.

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