Kauser Wise 334,490 views. Let us make an in-depth study of the eleven schedules in prescribed forms of accounts of electricity supply company. (6) Balance at Bank includes Rs. ... CA Final New Financial Reporting Strategic Financial Management Corporate and Economic Laws ... Electricity Company Balancesheet & P& L Formats Download Preview. (v) The amount of working capital, being the monthly average or, ½ of stores, materials and supplies including. 100 each, fully paid-up. Content Guidelines 2. Copyright 9. 17,40,000 during the year ended 31st March 1997 after charging interest on debentures amounting to Rs. A balance sheet reflects the financial position of a business for the specific period … 16,585 = Rs. To Buy Complete Classes Visit - https://www.StudyAtHome.org or Call: 8737012345. Objectives of Final Accounts From the following particulars furnished by Pioneer Ltd. prepare the Balance Sheet as at 31st March 1998, as required by Part I, Schedule VI of the Companies Act. (b) 10,000,10% Redeemable Preference Shares of Rs. (viii) The amount carried forward at the beginning of the year of account to the Consumers’ Benefit Reserve. This reserve may also be appropriated in annual instalment spread- over within a period of 5 years. Final account preparation involves preparing a set of accounts and statements at the end of an accounting year. An amendment in Electric Supply Act was made in 1978 which states that from 1st April 1979, Straight Line Method of Depreciation may be adopted. According to paragraph I of the Sixth Schedule, it is obligatory for all companies to adjust these rates for the sale of electricity by periodical revision in such a way so that their clear profit does not exceed the amount of reasonable return by more than 15% in any year. (iii) The original cost of work-in-progress. of the same shall be charged against Contingency Reserve and, if any discarded assets are sold, Contingency Reserve will be credited. Uploader Agreement, Read Accounting Notes, Procedures, Problems and Solutions, Learn Accounting: Notes, Procedures, Problems and Solutions, Top 5 Problems on Final Accounts of the Companies, Company Final Accounts: Problems and Solutions | Accounting, How to Prepare Final Accounts of Companies? (ii) Expenses or replacement or removal of plant or works other than expenses requisites for normal maintenance of renewal; (iii) Compensation payable under any law for the time being in force and for which no other provision is made. In addition, certain entries are Amount of depreciation so made shall be invested only in the electricity supply company or, in other cases, approval of the State Govt, must be taken. According to paragraph VA of the Sixth Schedule, a development reserve is to be created every year—a sum equal to the amount of income-tax on the amount of development rebate to which the licensee is entitled by virtue of Income-tax Act. 700 for out of pocket expenses paid to the auditors. (2) 2,000 Equity shares are issued for consideration other than cash. When any fixed asset is discarded due to obsolescence or any other reason, the w.d.v. 100 each. The monetary value associated with an asset acquired is said to be its cost. (7) Bills Receivable for Rs. (3) Interest accrued on Securities Rs. 3,51,450 as per Sec. Calculating the Remuneration Paid to the Directors: 3. 1. 2,000 with Perfect Bank Ltd. which is not a Schedule Bank. In accounting, the term cost refers to the expenditure or sacrifice made to acquire something of value. final accounts financial accounts prepared at the end of an accounting period. is Rs. 2. Learning objectives have been incorporated at the beginning of each chapter/unit to guide the students about the knowledge they should acquire after studying the chapters. The most important and crucial function of financial accounting is to ascertain the financial position and the profitability of the business. Accounts of Companies 5 company for a period of not less than eight years immediately preceding the relevant financial year. 2. Image Guidelines 4. Are you looking for problems and solutions of final accounts of the companies? 4. (ii) The amounts of any loans advanced by the State Electricity Board. (iii) The amounts of any loans borrowed from organisations or institutions approved by the State Government. The preparation of Company Final Accounts include the preparation of a set accounts at the end of accounting year/period. The Company Final Accounts consists of: 1. Total amount of depreciation must be 90% of the original cost of fixed assets. 2)Profit and Loss account. Final accounts consist of the PROFIT AND LOSS ACCOUNT and the BALANCE SHEET, and may also include a SOURCES AND USES OF FUNDS STATEMENT for the accounting period. 2. Managing Director’s commission will be @ 1% on Rs. The preparation of a final accounting is the last stage of the accounting cycle. The Enron scandal was an accounting scandal involving Enron Corporation, an American energy company based in Houston, Texas.Upon being publicized in October 2001, the company declared bankruptcy and its accounting firm, Arthur Andersen – then one of the five largest audit and accountancy partnerships in the world – was effectively dissolved. Report a Violation 10. Content Guidelines 2. Depreciation: Every fixed asset must be depreciated; and for the purpose of depreciation, the life of each asset is to be taken as stated in the table given in the Seventh Schedule. Profit and Loss Account. Valuation of Goodwill and Shares. This account is the first account prepared as a final account, it is prepared to ascertain gross profit or gross loss incurred during an accounting period. These papers touch upon various topics on accounting. A Profit and Loss Account has been prepared in draft. According to paragraphs III, IV and V of the Sixth Schedule, every electricity company is required to maintain Contingencies Reserve. Plagiarism Prevention 5. (b) 1/12 of the sum of cash and bank balances and call and short-term deposits at the end of each month of the year of account not exceeding ¼ th of the operating expenses excluding generation, interest and depreciation. You are required to show the disposal of profits assuming bank rate at 6% with the help of the following data: The following balances relate to an electricity company and pertaining to its accounts for the year ended 31st Dec. 1993: From the following information and details relating to the year ended 31st March 2000 and bearing in mind the provisions of the Electricity (Supply) Act, 1948, indicate the disposal of profits of X Electricity Corporation Limited: Before publishing your articles on this site, please read the following pages: 1. In addition, certain entries are 3,000 each. Trading account, Profit and Loss account and Balance Sheet together are called final accounts. departmental and branch accounts. The final account consists of the following accounts: Trading and Profit and Loss Account; Balance Sheet; Profit and Loss Appropriation account; Objectives of Final Account preparation. “Final accounts consist of trading account, profit and loss account and balance sheet. Article shared by : ADVERTISEMENTS: In this article we will discuss about the accounts of electricity companies, explained with the help of a suitable illustration. Overview. 10 1.1 Overview A traditional integrated power entity (utility) generates electricity and sends it around the country or region via high-voltage transmission lines, finally delivering it to 45,000 @ 7^%. Thus the final accounts will consist of a profit and loss account and balance sheet. excluding goodwill). IPCC Students Accounts of Electriciy Company Format in Excel Sheet. 198 of the Companies Act. Interest on accumulated balance will, however, be allowed as an expense from revenue. Final accounts gives an idea about the profitability and financial position of a business to its management, owners, and other interested parties. and Motor Vehicles @ 20% p.a. The trading account shows the gross profit or gross loss, net profit or net loss is calculated from profit and loss account and balance sheet is prepared to know the position of assets and liabilities.” – O. P. Gupta. 1,50,000 in the loan account with State Financial Corporation is inclusive of Rs. (IPCC Gr-II) Important Changes: The earlier syllabus (study material of ICAI) included the following, in this chapter: 1. 4. The Double Account System is a method of presenting the annual final accounts/annual financial statements of public utility undertakings, like Railways, Electricity, Gas, Water Supply, Tramways etc. The whole-time Directors are entitled to a monthly salary of Rs. TOS 7. You will find perfectly drafted accounting case study samples and examples with accurate solutions.. Expected Life of Fixed Assets of electricity (as prescribed by the Vllth Schedule) are given below in brief: It has already been stated earlier that at the time of computing Capital Base contribu­tion received from customers towards the cost of service connections are to be deducted from the capital outlay. Preparation of Final Accounts of a Company: Calculating the Remuneration Paid to the Directors, Preparation of Profit and Loss Account of a Company, Preparation of Balance Sheet as Required by Part I, Schedule VI of the Companies Act, Preparation of Balance Sheet of a Company as Required under Part IB of Schedule VI of the Companies Act, 1956, Preparation of Final Accounts of a Company. Preparation of Balance Sheet as Required by Part I, Schedule VI of the Companies Act: 4. The accounts which are prepared at the final stage of the accounting cycle to know the profit or loss and financial position of a business concern are called Final Accounts. Final accounts show both the financial position of a business along with the profitability, they are used by external and internal parties for various purposes. In this article we have compiled top five accounting problems on final accounts of the companies with its relevant solutions. Certain sections of this publication are designed to help you understand and address potential challenges in accounting and reporting related to topics on which the FASB has recently issued (1) proposed guidance or (2) final … Building @ 2% p.a., Plant and Machinery @ 10% p.a., Furniture @ 10% p.a. Adjustments are those transactions which are taking place after preparation of trial balance. (b) Prepare the Balance Sheet of the company, based on all the above. 166. 3,000. It is created out of revenues of each year—a sum not less than ¼% and not more than ½% of the original cost of fixed assets until it … You should note that when preparing the final accounts of a service sector business – such as a secretarial agency, solicitors, estate agents, doctor – a trading account will not be prepared because, instead of trading in goods, the business supplies services. 2. It is used to ascertain the gross profit and is prepared by transferring the balances on the sales, purchases and returns accounts to the trading account. The following adjustments are yet to be made: (i) Investment Allowance Reserve to be created Rs. ... CA Final New Financial Reporting Strategic Financial Management Corporate and Economic Laws ... Electricity Company Balancesheet & P& L Formats Download Preview. (vi) An amount equal to ½% on the balance of the Development Reserve. (ii) Of the balance of excess, ½ shall be transferred to Tariffs and Dividends Control Reserve, and the remaining ½) ½ shall be distributed in shape of proportionate rebate to the consumers on the amounts collected from the sale of energy and meter rental. According to sub-paragraph (1) of paragraph XVII of the Sixth Schedule, amount of capital base is the sum of the following items: (i) The original cost of fixed assets available for use and necessary for the purpose of the undertaking less the cost of service lines contributed by consumers. Balance sheet, which is prepared to know the financial … However, groupings should form part of the answer. According to paragraph XVII of the Sixth Schedule, the clear profit may be calculated as under: According to sub-paragraph (9) of paragraph XVII of Sixth Schedule, the reasonable return means the sum of the following items in respect of any year: (i) A standard rate of interest (bank rate) plus 2% on the Capital Base, (ii) Income derived from investments other than those included in the Capital Base, (iii) An amount equal to on the loans advanced by the State Electricity Board, (iv) An amount equal to ½% on the amounts borrowed from approved financial institutions, (v) An amount equal to ½% on the amount realised by the issue of debentures. (8) The company had a contract for the erection Of machinery at Rs. Final accounts of companies including managerial remuneration, disposal of profits and issue of bonus shares. (4) Schedules need not be given. (v) The amounts deposited in Cash with the Company by consumers by way of security. The Tariffs and Development Control Reserve shall be available for disposal only to the extent by which the clear profit is less than the reasonable return in any year of account. (ii) The cost of intangible assets (i.e., underwriting commission, preliminary expenses etc. Trading Account. Trading Account. Prohibited Content 3. 100 each, fully paid-up. Accounts of Companies 5 company for a period of not less than eight years immediately preceding the relevant financial year. Copyright 10. P5 – Financial Accounting: It consists of different topics under 6 sections which include Generally Accepted Accounting Principles & Accounting Systems, Preparation of Accounts, Control of Accounting Systems, Accounting in Service Sectors, Accounting for Special Transactions, Accounting for Banking, Electricity & Insurance Companies. 3,59,550 – Rs. 8,100 (Rs. Chapters 8 and 9 are devoted to accounting for special transactions i.e. Report a Violation, Double Account System: Meaning, Features and Advantages | Electricity Accounts, Preparation of Final Accounts under Electricity Supply Act, 1910, Principles Relating to the Structure of an Organisation | Office Management. 5,000 Audit Fees and Rs. The trading and profit and loss account show the profit or loss of the business. (a) full in hand at the end of each month of the year of account. Statements I and II resemble the ‘Receipts and Expenditure on Capital’ under Double Account System, stated earlier whereas, Statements III and IV; constitute the ‘Revenue Account’ Statement X is the ‘Net Revenue Account’. In Cash with the Company, based on all the above, being the monthly average or ½. Contingency Reserve and, if any discarded assets are sold, Contingency and. Of working capital, being the monthly average or, ½ of stores, materials and supplies including the! 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