Financial Statement of Electricity Companies. Preparation of Profit and Loss Account of a Company: The following balance appeared in the books … 10,424 (‘000). Total amount of depreciation must be 90% of the original cost of fixed assets. When any fixed asset is discarded due to obsolescence or any other reason, the w.d.v. (5) The balance of Rs. Thus the final accounts will consist of a profit and loss account and balance sheet. (viii) The amount carried forward at the beginning of the year of account to the Consumers’ Benefit Reserve. The said rates must neither be enhanced more than once in a year nor be enhanced without giving a proper notice of at least 60 clear days to the State Government or the State Electricity Board. 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. electricity and gas used in the manufacturing facilities indirect factory supplies, and much more Because manufacturing overhead is an indirect cost, accountants are faced with the task of assigning or allocating overhead costs to each of the units produced. They are then transferred to a ledger and balanced. Preparation of Balance Sheet of a Company as Required under Part IB of Schedule VI of the Companies Act, 1956: 5. Copyright 10. departmental and branch accounts. 200. ... CA Final New Financial Reporting Strategic Financial Management Corporate and Economic Laws ... Electricity Company Balancesheet & P& L Formats Download Preview. In addition, they are to get 8% commission and the part-time Directors 1% commission on the profits of the company. Thus the final accounts will consist of a profit and loss account and balance sheet. TOS 7. (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. Depreciation must be provided on all fixed assets. The reserve may be utilised for the following purposes, with the approval of the State Government: (i) Expenses or loss of profits arising out of accidents, or circumstances which management could not have prevented. Article shared by : ADVERTISEMENTS: In this article we will discuss about the accounts of electricity companies, explained with the help of a suitable illustration. Content Filtration 6. 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 Topics discussed in this video Accounts Of Electricity Company. In this you keep track of a company's financial transactions using standard rules, the transactions are recorded, summarized, and presented in a financial report or financial statements such as an income statement or a balance sheet. (a) Show the computation of commission to the Managing Directors, and. (iv) The amount of any debenture issued by the Company. Accounts of Companies 5 company for a period of not less than eight years immediately preceding the relevant financial year. The cost of service connections must be shown as a fixed asset and the amount so received from the customers for this purpose will be shown in the liabilities side of the Balance Sheet under the head ‘Contributions by customers towards cost of Service Lines’. 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. Simply put, it is the full and final accounting procedure which is carried out at the end of an accounting year, resulting in the preparation of relevant accounts. excluding goodwill). The preparation of final accounts The trading account The trading account is an account in the ledger and is thus a part of the double-entry system. (iii) The original cost of work-in-progress. (IPCC Gr-II) Important Changes: The earlier syllabus (study material of ICAI) included the following, in this chapter: 1. Prohibited Content 3. (2) 2,000 Equity shares are issued for consideration other than cash. Copyright 9. 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. (b) Prepare the Balance Sheet of the company, based on all the above. These papers touch upon various topics on accounting. In addition, certain entries are Final Accounts MCQs test consists of 20 questions, every question must be answered to move to the next question. 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. Saharanpur Electricity Ltd. earned a profit of Rs. Balance Sheet The trading and profit and loss account show the profit or loss of the business. | Accounting, Final Accounts of General Insurance Companies | Accounting, Problems on Final Accounts of the Companies. (8) The only liability for taxes is in respect of profit for 1999 for which a provision of 60% on net profit is considered. (vi) The amounts standing to the credit of the Development Reserve at the close of the year of account. 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. 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. Dec 23, 2020 - Accounts of Electricity Companies - Electricity Companies, Advanced Corporate Accounting B Com Notes | EduRev is made by best teachers of B Com. The preparation of a final accounting is the last stage of the accounting cycle. b) The manual also has the approval of the Executive Director and the full authority of the Board of Trustees. Trading account, Profit and Loss account and Balance Sheet together are called final accounts. The Profit and Loss Account of the company for the year ended 31.12.1999 was as follows: You are asked to compute the remuneration to be paid to the Directors with your comments, if any. 4. Final Account consists of the following:- 1)Trading account. 2. 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. ... CA Final New Financial Reporting Strategic Financial Management Corporate and Economic Laws ... Electricity Company Balancesheet & P& L Formats Download Preview. The Company Final Accounts consists of: 1. is Rs. 3,59,550 – Rs. 2. 3,000 each. Final accounts gives an idea about the profitability and financial position of a business to its management, owners, and other interested parties. Final account preparation involves preparing a set of accounts and statements at the end of an accounting year. 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. 3. The preparation of Company Final Accounts include the preparation of a set accounts at the end of accounting year/period. Overview. To Buy Complete Classes Visit - https://www.StudyAtHome.org or Call: 8737012345. Adjustments are those transactions which are taking place after preparation of trial balance. 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. 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. ... [Revised Format]Company Final Accounts -kauserwise - Duration: 35:00. It must be remembered that if in any year the clear profit (before considering special appropriations plus balance of Tariff and Dividend Control Reserve) is less than the required amount of Development Reserve, the deficiency so made may not be compensated. 1 Final accounts of Service sector businesses The final accounts of a service sector business – such as a secretarial agency, solicitor, estate agent, doctor – do not normally include a trading account. Prepare a Balance Sheet in vertical form as at 31st December 2000 from the following information of ABC Limited as required under Part IB of Schedule VI of the Companies Act, 1956: (a) 3,000 Equity Shares of Rs. (ii) The amounts of any loans advanced by the State Electricity Board. Any excess over 20% of reasonable return must be refunded to customers. Final Accounts as per Double Account System which included Revenue A/c, Net Revenue A/c, Receipt & … It means capital employed. This is because the business, instead of trading in goods, supplies services. All business transactions are first recorded in a journal. Interest on accumulated balance will, however, be allowed as an expense from revenue. “Final accounts consist of trading account, profit and loss account and balance sheet. So, the Directors are entitled to have overall maximum remuneration to the extent of Rs. Some of the above prescribed forms are presented: It has already been stated earlier that there are some financial provisions contained in the Sixth and Seventh Schedules of the Electricity (Supply) Act. Trading Account. Only two methods are recognised here for the amount of depreciation on fixed assets, viz., Compound Interest Method and the Straight Line Method. This reserve may also be appropriated in annual instalment spread- over within a period of 5 years. Balance Sheet 45,000 @ 7^%. The preparation of final accounts The trading account The trading account is an account in the ledger and is thus a part of the double-entry system. 1,50,000 in the loan account with State Financial Corporation is inclusive of Rs. The Board of Directors of Sen & Co. Ltd. consists of two whole-time Directors and three part-time Directors. (4) Schedules need not be given. Content Guidelines 2. Another important set of account if as company’s final accounts is the profit and loss account. Plagiarism Prevention 5. Content Guidelines 2. 3,59,550, therefore excess amount Rs. 100 each, fully paid-up. 7,500 for interest accrued but not due. 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’. 2)Profit and Loss account. But at the time of submitting their accounts to the Central Government they have to follow the prescribed format framed by the Indian Electricity … (7) Bills Receivable for Rs. (6) Balance at Bank includes Rs. 5,400 (‘000); (ii) Provision to be made for Income-tax in Rs. However, groupings should form part of the answer. 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. 35:00. IPCC Students Accounts of Electriciy Company Format in Excel Sheet. It is also known as Modified Sinking Fund Method. In case of a company incorporated less than eight years before the financial year, the books of accounts for the entire period preceding the financial … 3,000. (iv) Compulsory investments made on account of contingencies reserves. Preparation of Profit and Loss Account of a Company: The following balance appeared in the books of Regent Company Ltd. as on 31st December 1999: From the above balance and the following information, prepare the Company’s Profit and Loss Account for the year ended 31st Dec. 1999: (2) Outstanding Expenses: Manufacturing Expenses Rs. 3)Balance sheet. • Prepared by a Certified Public Accounting Firm – Compiled Financial Statement – Reviewed Financial Statement ... • Is a “snapshot in time” –presents the financial picture of the Company as of a specific date ... book value of the company to the owners • Consists of: – Capital Stock or Members’ Capital 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. The account balances, as rounded-off to the nearest thousands, are listed below: The authorised capital is 3,50,000 Equity Shares of Rs. and Motor Vehicles @ 20% p.a. (3) Debtors of Rs. IPCC Students Accounts of Electriciy Company Format in Excel Sheet. final accounts financial accounts prepared at the end of an accounting period. Sundry Debtors, Bills Receivable, Prepaid Expenses, Accrued Income, Loose Tools, Insurance Claim, Closing Stock, Stock of Stationery, Stock of Postage Stamps, etc. Explanation. Privacy Policy 8. It is the difference between the total expenditure (including special appropriation). It determines the financial … Company financial statements consist of: Income statement (profit and loss account) Statement of changes in equity 7. In addition, certain entries are (7) The taxation provision shown in the Trial Balance is after payment of taxes for assessment up to 31st Dec. 1999. 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. 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 amounts to 5% of the original cost of fixed assets. 2. 17,40,000 during the year ended 31st March 1997 after charging interest on debentures amounting to Rs. Trading Account. This document is highly rated by B Com students and has been viewed 3234 times. Balance sheet, which is prepared to know the financial … The monetary value associated with an asset acquired is said to be its cost. 2. As regards the depreciation method that can be applied, the Act … Final accounts of companies including managerial remuneration, disposal of profits and issue of bonus shares. 100 each, fully paid-up. on accounting and reporting concerns specific to renewable energy. Chapters 8 and 9 are devoted to accounting for special transactions i.e. Account Disable 11. 3,51,450 as per Sec. Image Guidelines 4. In case of a company incorporated less than eight years before the financial year, the books of accounts for the entire period preceding the financial … 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. (vi) An amount equal to ½% on the balance of the Development Reserve. Kauser Wise 334,490 views. In accounting, the term cost refers to the expenditure or sacrifice made to acquire something of value. The loan is secured by hypothecation of the Plant and Machinery. 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 … 3. You will find perfectly drafted accounting case study samples and examples with accurate solutions.. 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. 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. Disclaimer 9. The Electricity Companies may also prepare their accounts as per Schedule VI of the Companies Act, 1956, for the purpose of informing their shareholders. (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. Final Accounts – Definition. A Profit and Loss Account has been prepared in draft. Prior to 1948, electricity supply companies charged high rates from the consumers and did not make any reduction on rates. Preparation of Balance Sheet as Required by Part I, Schedule VI of the Companies Act: 4. Profit and Loss Appropriation Account. 1,50,000 which is still incomplete. According to paragraphs III, IV and V of the Sixth Schedule, every electricity company is required to maintain Contingencies Reserve. 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. The Company Final Accounts consists of: 1. 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. You are at the right place! of the same shall be charged against Contingency Reserve and, if any discarded assets are sold, Contingency Reserve will be credited. Final accounts are prepared with the following objectives: To determine profit or loss incurred by a … Under this method, an allowance is made in each year in respect of depreciation .of fixed assets—such an amount which is arrived at by dividing 90% of the original cost by the period of its prescribed life. Disclaimer 8. (b) 10,000,10% Redeemable Preference Shares of Rs. 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 … Trading is maintained by a trading company to find out the gross profit or gross loss as a result of the business activities. (ii) The cost of intangible assets (i.e., underwriting commission, preliminary expenses etc. Content Filtrations 6. The whole-time Directors are entitled to a monthly salary of Rs. Final Accounts Training is the ultimate goal in your career as an accountant in the field of Accountancy. IPCC Students Accounts of Electriciy Company Format in Excel Sheet. The following adjustments are yet to be made: (i) Investment Allowance Reserve to be created Rs. 16,585 = Rs. MyAssignmenthelp.com consists of a vast reserve of resource materials that students can explore when they visit our website. According to paragraph VIII of the Sixth Schedule, if an asset has been written-down in the books to 10% or less of its original cost, no further depreciation shall be allowed. The preparation of Company Final Accounts include the preparation of a set accounts at the end of accounting year/period. Are you looking for problems and solutions of final accounts of the companies? 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. Prohibited Content 3. 45,000 and Salaries and Wages Rs. Pending distribution, if any (this remaining ½) is carried to a ‘Consumers’ Benefit Reserve’. 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. Accounts of Companies 5 company for a period of not less than eight years immediately preceding the relevant financial year. Building @ 2% p.a., Plant and Machinery @ 10% p.a., Furniture @ 10% p.a. Objectives of Final Accounts Profit and Loss Appropriation Account. Give note at the foot of the Balance Sheet as may be found necessary: The following additional information is also provided: (1) Miscellaneous expenses included Rs. 4,400 (‘000); (iii) Provision to be made for Managing Director’s Commission at 1% of the net profits; Depreciation as per Section 350 of the Companies Act, in Rs. Valuation of Goodwill and Shares. 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. 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. 100 each. 4. 8,100 (Rs. 2,000 with Perfect Bank Ltd. which is not a Schedule Bank. The most important and crucial function of financial accounting is to ascertain the financial position and the profitability of the business. 2,75,000 maturing on 30th June 1998 have been discounted. 1. The amount of such reserve shall be invested in trust securities and the investment must be made within a period of 6 months from the date of appropriation. 198 of the Companies Act. 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. At the same time, they should have taken previous permission from the Central Government for this purpose. These final tallies are prepared for a specific period. Every businessman enters into business activities to earn profit. (iii) The amounts of any loans borrowed from organisations or institutions approved by the State Government. (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. Profit and Loss Account. (i) The amounts written-off or set aside on account of depreciation of fixed assets and the amounts written-off in respect of intangible assets in the books of the Company. The loan from the State Government is secured by a charge on the land, cash-credits by hypothecation of stocks and book debts and the other secured loans on the building and plant and machinery. Every electricity supply company is required to submit to the State Government (or to its nominee which is the State Electricity Board) certain statistical statements in the prescribed form according to Rule 26 of the Indian Electricity Rules, 1956. Profit and Loss Account. Similarly, when any fixed asset ceases to be available for use through obsolescence, inadequacy, superfluity, or for any other reason, it shall be described in the books as discarded asset and, consequently, no further depreciation is allowed (paragraph VII of the Sixth Schedule). Browse more Topics under Final Accounts Failure … (v) The amounts deposited in Cash with the Company by consumers by way of security. 166. Managing Director’s commission will be @ 1% on Rs. (8) The company had a contract for the erection Of machinery at Rs. The final accounts or financial statements consists of: Trading and profit and loss account or income statement, which is prepared to know the profit earned or loss suffered by the business during a specific period. All limited companies must publish their financial statements at the registrar of companies (for public inspection). financial reporting of insurance, banking and electricity companies. Trading account of a joint stock of a company is the first main set of account of final accounts. Since they have taken Rs. 700 for out of pocket expenses paid to the auditors. The Balance Sheet depicts the financial position of the business. Balance Sheet. Let us make an in-depth study of the eleven schedules in prescribed forms of accounts of electricity supply company. Final accounts are an essential financial component of any accounting year for every company. These undertakings are usually incorporated under Special Acts and, as a result, the form of accounts is prescribed by, special statute. 5,000 Audit Fees and Rs. Report a Violation 10. (6) The Directors proposed a dividend @ 20%. ET Limited are in the midst of finalising their accounts for the year ended 30th September 1999. We have prepared a Multiple Choice Questions (MCQs) test for Final Accounts Chapter for the ease of students to clear their concepts. 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? (vii) The amounts standing to the credit of the Tariffs and Dividends Control Reserve at the beginning of the year of account. 1. Trading 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. This MCQs test will help students to prepare for their objective exams as well as their interviews. (v) The amount of working capital, being the monthly average or, ½ of stores, materials and supplies including. In this article we have compiled top five accounting problems on final accounts of the companies with its relevant solutions. company reporting in an increasing ... accounting issues 1 Financial reporting in the power and utilities industry. Plagiarism Prevention 4. Under this method, such an amount should be set aside every year throughout the life of the asset, accumulating @ 4% compound interest, which will produce an amount equal to 90% of the original cost of the assets. A balance sheet reflects the financial position of a business for the specific period … 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. Trading Account. 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. Image Guidelines 5. IPCC Students Accounts of Electriciy Company Format in Excel Sheet. Accounting Standards, International Public Sector Accounting Standards and the requirements of the Ghana companies code, 1963 (Act 179). In financial accounting, all transactions are recorded in terms of historical cost; that is, the money expended or to be expended at the date of the transaction. They must comply with the Companies Acts which describe the ‘form and content’ of the financial statements. The profit and loss account, instead of starting with gross profit, will commence with the income from the business activity, such as 'fees', 'income from clients', 'charges', 'work done'. (3) Interest accrued on Securities Rs. Final Accounts also consists of various adjustments. Before preparing the Balance Sheet, we are to prepare a Profit and Loss Account in order to find out the net profit as under: Before uploading and sharing your knowledge on this site, please read the following pages: 1. Electriciy Company Format in Excel Sheet Dividends Control Reserve at the end of an accounting period is maintained by trading... Required under Part IB of Schedule vi of the Companies with its solutions. 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