7 :- State giving reason whether Trade Payables are classified as Current Liabilities or Non – Current Liabilities in the Balance Sheet of a Company as per Schedule III of the Companies Act, 2013 in the following cases :
Solution :-
Case – 1 – Current Liabilities
Reason:- Liabilities to be paid off within the 12 months period are classified as current assets irrespective of the operating cycle period.
Case – 2 – Current Liabilities
Reason:- Liabilities to be paid off within the 12 months period are classified as current assets irrespective of the operating cycle period.
Case – 3 – Non-Current Liabilities
Reason:- Here Trade Payables to be paid after 12 months and it is also to be paid after the operating cycle of the business.
Case – 4 – Current Liabilities
Reason:- Here However Trade Payables is to be paid in 13th months but it is to be paid within the operating cycle of the business. The liabilities paid within the operating cycle of the business are classified as Current liabilities.
Case – 5 – Non-Current Liabilities
Reason:- Here Trade Payables is to be paid in 16th months but it is after the operating cycle of the business that is 15 months. Thus, Liabilities paid off after 12 months and also after the operating cycle of the business are termed as Non-Current Liabilities.