Question

Under which major heads and sub-heads will the following items be placed in the Balance Sheet of the company as per Schedule III, Part I of the Companies Act, 2013?
(i) Patents
(ii) Capital Reserve
(iii) Prepaid Rent

Hint:

Refer to Schedule III, Part I of the Companies Act, 2013 for the classification of assets and liabilities in the Balance Sheet.

Answer 1

(i) Patents - Non-current Assets (Intangible Assets) 
(ii) Capital Reserve - Shareholders’ Funds (Reserves and Surplus) 
(iii) Prepaid Rent - Current Assets (Other Current Assets) Patents, as intangible assets, fall under Non-current Assets. 

Capital Reserve is part of Reserves and Surplus under Shareholders’ Funds. Prepaid Rent, being a short-term asset, falls under Current Assets as Other Current Assets.