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) Vehicles
(iii) Prepaid insurance

Hint:

Decide asset or liability, then current or non-current, then pick the sub-head. Unclaimed dividend is a current liability, vehicles are fixed assets and prepaid insurance is a current asset.

Answer 1

Step 1: Recall the rule:
Schedule III, Part I of the Companies Act, 2013 gives the Balance Sheet of a company in a fixed format. Every item sits under a major head (such as Non-Current Assets or Current Liabilities) and then under a sub-head. The 12 months from the Balance Sheet date decide whether an item is current or non-current.

Step 2: Classify Unclaimed dividend.
A dividend declared but not claimed by the shareholder within 30 days stays as a liability of the company. It is payable within a short time, so it is current. It has no separate sub-head in Schedule III, so it falls in the residual group.
Major head: Current Liabilities. Sub-head: Other Current Liabilities.

Step 3: Classify Vehicles.
Vehicles are tangible assets bought to be used in the business for many years, not to be sold. Long-term assets of this kind are non-current. Tangible fixed assets are shown as property, plant and equipment.
Major head: Non-Current Assets. Sub-head: Property, Plant and Equipment and Intangible Assets.

Step 4: Classify Prepaid insurance.
Prepaid insurance is premium paid in advance for the period after the Balance Sheet date. The benefit is received within the next 12 months, so the item is current. It is not cash, stock, debtors or investments, so it goes in the residual group.
Major head: Current Assets. Sub-head: Other Current Assets.

Step 5: Summary table:

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

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