Read the following data of a company and answer the question.
Public deposits- ₹4,00,000
O/S Expenses- ₹10,000
Calls in advance- ₹25,000
Provision for employee benefits- ₹20,000 (maturing within operating cycle of the company)
Provision for taxation- ₹1,50,000
Calculate the Current liabilities that will be shown in the company's balance sheet.
Answer & explanation
Correct answer: option 2
The correct answer is option 2- ₹2,05,000.
Current Liabilities= Other current liabilities + Short term provision
= ₹35,000 + ₹1,70,000
= ₹2,05,000
* Short term Provisions = Provision for employee benefits + Provision for taxation
= 20,000+ 1,50,000
= ₹1,70,000
* Other current Liabilities = O/S expense + Calls in advance
= 10,000 + 25,000
= ₹35,000