A Ltd. has a balance of ₹ 17,15,000 in the loan account with State Finance Corporation which is inclusive of ₹ 1,15,000 for interest accrued but not…

CA Intermediate · Advanced Accounting · MTP · September 2026
A Ltd. has a balance of ₹ 17,15,000 in the loan account with State Finance Corporation which is inclusive of ₹ 1,15,000 for interest accrued but not due. The loan is secured by hypothecation of the Plant and Machinery. As per Schedule III to the Companies Act, 2013 loan is to be disclosed in the balance sheet as follows:
(A) (i) Disclosed ₹ 16,00,000 as a secured loan under long-term borrowings.
(B) (ii) Disclosed ₹ 16,00,000 as a secured loan under long-term borrowings and ₹ 1,15,000 under short-term borrowings.
(C) (iii) Disclosed ₹ 16,00,000 as a secured loan under long-term borrowings and ₹ 1,15,000 under other current liabilities.
(D) (iv) Disclosed ₹ 16,00,000 as a secured loan under long-term borrowings and no disclosure for ₹ 1,15,000.

Suggested Answer and Working Notes:

Correct Answer: Option (C)

(iii) Disclosed ₹ 16,00,000 as a secured loan under long-term borrowings and ₹ 1,15,000 under other current liabilities.

Topics: Preparation of Financial Statements

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