Worked Solution
✓ VerifiedNote: The trial balance figures and the 7 additional information points were not included in the question as submitted. The solution below demonstrates the complete Schedule III, Division I Balance Sheet framework with illustrative structure. Once the actual figures are provided, each line item can be populated accordingly.
Legal Framework: Under Section 129 of the Companies Act, 2013 read with Schedule III, Division I, every company (other than those covered under Division II — Ind AS companies) must prepare its Balance Sheet in the prescribed vertical format. The Balance Sheet is divided into Equity & Liabilities (Sources) and Assets (Application).
AMBIENCE LTD.
Balance Sheet as at 31st March 2023
(All figures in ₹)
I. EQUITY AND LIABILITIES
(1) Shareholders' Funds
(a) Share Capital — [Authorised, Issued, Subscribed & Paid-up separately disclosed in Note]
(b) Reserves and Surplus — [General Reserve, Securities Premium, Surplus i.e. P&L balance, Capital Reserve etc. — each shown separately in Note]
(c) Money received against Share Warrants
(2) Share Application Money Pending Allotment
(3) Non-Current Liabilities
(a) Long-Term Borrowings — [Debentures, Term Loans — secured/unsecured split required]
(b) Deferred Tax Liabilities (Net)
(c) Other Long-Term Liabilities
(d) Long-Term Provisions — [Provision for employee benefits etc.]
(4) Current Liabilities
(a) Short-Term Borrowings
(b) Trade Payables — [Separately: dues to Micro & Small enterprises; dues to others]
(c) Other Current Liabilities — [Current maturities of long-term debt, Interest accrued, Unclaimed dividends etc.]
(d) Short-Term Provisions — [Proposed Dividend, Provision for Tax etc.]
TOTAL EQUITY AND LIABILITIES = ₹ XXX
II. ASSETS
(1) Non-Current Assets
(a) Fixed Assets:
(i) Tangible Assets — shown net of accumulated depreciation; additions and disposals disclosed in Note
(ii) Intangible Assets
(iii) Capital Work-in-Progress
(iv) Intangible Assets under Development
(b) Non-Current Investments — [Trade / Non-trade; Quoted / Unquoted at cost unless impaired]
(c) Deferred Tax Assets (Net)
(d) Long-Term Loans and Advances — [Capital advances, Security deposits, Advance tax net of provision]
(e) Other Non-Current Assets
(2) Current Assets
(a) Current Investments
(b) Inventories — [Raw materials, WIP, Finished goods, Stores & Spares, Loose tools — each disclosed; valued at cost or NRV whichever is lower as per AS 2]
(c) Trade Receivables — [Outstanding > 6 months and others separately; secured/unsecured; provision for doubtful debts deducted]
(d) Cash and Cash Equivalents — [Cash in hand, Balances with banks, Cheques/DD in hand]
(e) Short-Term Loans and Advances
(f) Other Current Assets — [Prepaid expenses, Accrued income etc.]
TOTAL ASSETS = ₹ XXX
Key Adjustments typically required (based on standard additional information in such questions):
- Proposed Dividend: Credited to Short-Term Provisions; deducted from Surplus in Reserves & Surplus.
- Provision for Tax: Current year provision added; Advance Tax netted under Long-Term Loans & Advances.
- Depreciation: Deducted from gross block to arrive at net block.
- Closing Stock: Appears as Inventories under Current Assets (not in P&L if Balance Sheet only is asked).
- Contingent Liabilities: Disclosed by way of Note — NOT shown on the face of the Balance Sheet (per Schedule III requirements).
- Current maturities of Long-Term Debt: Classified under Other Current Liabilities, NOT under Long-Term Borrowings.
- Calls in Arrears: Deducted from Subscribed capital; Calls in Advance: shown under Other Current Liabilities.
Please provide the actual trial balance figures and the 7 additional information points so that a fully computed, exam-ready Balance Sheet with all Notes to Accounts can be prepared.
Write it like this
1The skeleton
- Write the heading block first — company name, 'Balance Sheet as at 31st March 2023', and '(₹ in ___)' — examiners tick this before reading a single figure, so missing it costs you presentation marks instantly.
- Split the face into Equity & Liabilities → Assets in that exact order — don't flip them or merge sub-heads; Schedule III's vertical sequence is the answer, and deviation signals you memorised a textbook, not the format.
- Knock out your 7 adjusting entries on rough paper BEFORE touching the format — proposed dividend, current maturities, advance tax netting, calls in arrears — each adjustment touches two line items, and doing it blind inside the format causes both sides to mismatch.
- Carry every adjusted figure into a Notes to Accounts — Share Capital note, R&S note, Fixed Assets schedule — the face of the Balance Sheet shows only totals; the marks for break-up sit inside the notes, not on the face.
- Write 'Total Equity & Liabilities = Total Assets = ₹ X' explicitly at the bottom — if your Balance Sheet tallies, this one line proves it and signals the examiner to award full marks without re-checking your arithmetic.
2Examiner-rewarded phrases
3Common trap
Watch out — the single biggest mark-killer is dumping 'current maturities of long-term debt' inside Long-Term Borrowings because it 'feels' long-term. Schedule III is explicit: it goes under Other Current Liabilities, and if you get this wrong, both your totals mis-classify and the examiner loses confidence in everything else you wrote.