Question

Classify the following items under major heads and sub-heads (if any) in the Balance Sheet of a company as per Schedule-III, Part-I of the Companies Act, 2013:

(i) Unclaimed dividend

(ii) Trademarks

(iii) Vehicles

Hint:

Decide for each item whether it is due or used within 12 months. Then pick the major head and the matching sub-head from Schedule III, Part I.

Answer 1

Step 1: Understanding the Question:
Schedule III, Part I of the Companies Act, 2013 gives the format of the Balance Sheet of a company.
Every item is placed under a major head, and then under a sub-head where the Schedule gives one.
Here we place three items one by one.

Step 2: Key Rule:
The major heads are Shareholders Funds, Non-Current Liabilities, Current Liabilities, Non-Current Assets and Current Assets.
An item is current if it is due, or will turn into cash or be used, within 12 months or the operating cycle.
Otherwise it is non-current.

Step 3: Classify Unclaimed dividend.
Unclaimed dividend is dividend that was declared but that shareholders have not collected. The company still owes this money and must keep it ready, so it is a current liability. It does not fit trade payables or provisions, so the sub-head is Other Current Liabilities.
So the major head is Current Liabilities and the sub-head is Other Current Liabilities.

Step 4: Classify Trademarks.
A trademark is an intangible asset, because it is a legal right to use a name or a mark. It gives benefit over many years, so it is non-current. Schedule III shows it under Property, Plant and Equipment and Intangible Assets.
So the major head is Non-Current Assets and the sub-head is Property, Plant and Equipment and Intangible Assets.

Step 5: Classify Vehicles.
Vehicles are tangible assets that the company uses for many years in its work, for example to carry goods. They are not bought for resale, so they are non-current assets. They go under Property, Plant and Equipment and Intangible Assets.
So the major head is Non-Current Assets and the sub-head is Property, Plant and Equipment and Intangible Assets.

Step 6: Present the answer in a table.

Item	Major head	Sub-head
Unclaimed dividend	Current Liabilities	Other Current Liabilities
Trademarks	Non-Current Assets	Property, Plant and Equipment and Intangible Assets
Vehicles	Non-Current Assets	Property, Plant and Equipment and Intangible Assets

Each correct major head and sub-head earns half a mark, so the six parts carry 3 marks.

Final Answer:
Unclaimed dividend: Current Liabilities, Other Current Liabilities; Trademarks: Non-Current Assets, Property, Plant and Equipment and Intangible Assets; Vehicles: Non-Current Assets, Property, Plant and Equipment and Intangible Assets.