Question

Show the following items under major heads and sub-heads (if any) in the Balance Sheet of the company as per Schedule III, Part I of the Companies Act, 2013: (a) Prepaid Insurance
(b) Capital Work-in-Progress
(c) Unpaid Dividend

Hint:

Items like prepaid expenses, construction-in-progress, and unpaid obligations must be classified carefully under Schedule III heads to ensure financial transparency and compliance.

Answer 1

(a) Prepaid Insurance:
- It is an item of Current Assets.
- Sub-head: Other Current Assets under Current Assets.
- Explanation: Prepaid insurance is an advance payment for future coverage, not yet expensed, and hence treated as an asset realizable within 12 months. 

(b) Capital Work-in-Progress:
- It is an item of Non-Current Assets.
- Sub-head: Fixed Assets $\rightarrow$ Capital Work-in-Progress.
- Explanation: This represents the cost incurred on assets currently under construction and not yet ready for intended use. 

(c) Unpaid Dividend:
- It is an item of Current Liabilities.
- Sub-head: Other Current Liabilities under Current Liabilities.
- Explanation: Unpaid dividend is a liability towards shareholders and is expected to be settled within the operating cycle.