debentures of electricity company is shown on

Writing Off Discount. 10%, and Meters 15%. endstream endobj startxref h�b```�hV��2�0p8��Y�� Y��1D\`)`P+`�b;Đv�M�!Ԁ՝!� �7�k��ӂSy�?�ͳ��G�bp��&��X,��1X;0r� M]��um��{6��lY�i�VIM,X��ĔD�, Non-convertible Debentures (NCDs) Non-convertible debentures are simply regular debentures, cannot be converted into equity shares of the liable company. The company issues convertible debentures to attract enough investors to fund their international expansion. debentures of the company. Let us study this in detail In short, under Single Account System, such interest is charged against profit; hence, debited to Profit and Loss Account. on changes to the rights attached to the debentures. 100 each at par. 16. Share allotment account is a -----. endstream endobj 200 0 obj <>>> endobj 201 0 obj <>/ExtGState<>/Font<>/ProcSet[/PDF/Text/ImageC]/XObject<>>>/Rotate 0/TrimBox[0.0 0.0 595.276 841.89]/Type/Page>> endobj 202 0 obj <>stream N.B. ��c�=��c�=��c��+2=��c�=��m�. Pass the necessary journal entries for the issue of debentures in the books of the company When debentures are issued at a premium of 25% to the vendors for machinery Transformer Rs, 50,000; Cables & Lines Rs. %PDF-1.5 %�� 211 0 obj <>/Filter/FlateDecode/ID[<1DFEA016318A21468A467DDD56E13A8B>]/Index[199 22]/Info 198 0 R/Length 71/Prev 1345455/Root 200 0 R/Size 221/Type/XRef/W[1 2 1]>>stream But, in case of Electricity Supply Companies, only the last one is taken into consideration. Debentures will be redeemed at a discount when the company is able to buy the debentures in the open market at a price lower than the face value of the debentures. Shown in the Equity and Liability part of the Balance Sheet under the head ‘Shareholders’ fund and sub-head ‘Reserves and Surplus’. The term debenture is used interchangeably with terms bond, note, or loan stock. Usually, the debenture will be registered on a fixed and floating charge basis to provide additional security for the bank or financial institution. Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 7 Issue of Shares. 220 0 obj <>stream After the redemption of all debentures, the balance in sinking fund is transferred to A. Sf investment a/c B. Equity Shares No. The balance of Receipts and Expenditure on Capital Account is carried down and shown in the respective side of the General Balance Sheet, or, the total of two sides of this account are shown ort both sides of the General Balance Sheet. 199 0 obj <> endobj 2. Under which heads and sub-heads the following items will appear in the Balance Sheet of a company as per revised Schedule VI, Part-I of the Companies Act 1956. i. The issue of Debentures is very similar to the issue of shares by a company. Image Guidelines 5. During the year, additions to Generation Plant was Rs. k(��*k��ү�+� treated as an appropriation of profit since debentures and loans (long-term) are considered as a part of capital. Mains (including addition) Rs. 4��0��\z~ѽuyh��y��ϫq=)�ՠj��b: M�ơ=U��%M?M?4-�s��8T�pN�0_��l� +% �y3 �ү�+� If debentures to be issued are Secured Debentures, a Debenture Trust Deed in Form No. (a) 25,000, 10% debentures of Rs. The conversion will be at a ratio of 20:1 after three years. of Shares Cost Market Value A Ltd. 5,000 2,50,000 3,00,000 X Ltd. 1,000 80,000 1,00,000 Z �ү�+� These Debentures are being offered by Belize Electricity Limited (“the Company”) at a price of $100 per Debenture. All items of expenditure appear on the debit side whereas all items of income appear on the credit side of Revenue Account. ]/oC��Kzm�bY��y6}��c_�y��v�yߝ.�z��un��csyIwE�mh��v��ӯ��.��Ω�"l6�I��C_��9�rZv�o��v��5w��)T�|IL}iҵ?�i8v��X/�g��)R��w��T�>�z��7/f��m��c�c�s�?�M��j1��sd��,�ʬ��]LMyș��u�!��K䊹B�-�i��E�"l��[tfG�3��p�G�G�-�6g�A`�A`�A`�A`�A`�A&k(�� Debenture premium cannot be 6 In case of debentures they are not secured by providing a collateral or �h�x4�H��6E� '-Z+�)t�H��G�Z{qJ{��vކ�P2��ó�Oi�7Ӽlm�ӛ�Y�% "y"��z��Hh4]� Meaning of Issue of Debentures 2. A company is said to be Deemed Public Company … MCQ on Accounts of Holding Companies, Profit earned before acquisition of share is treated as, Holding Co. share in capital profits of subsidiary 3. Debentures are shown in the balance sheet of the company under the item Secured loans. Beta Ltd issued 5,000, 9% debentures of Rs.500 each. A. personal account B. B.Com III Semester Company Accounts Multiple Choice Questions. 1 per share was payable on 30.6.2009 and arrears are subject to interest at 10% p.a. X holding 500 shares paid only application and allotment money whereas Y holding 400 shares did not pay final call. (ii) Issue of Debentures at Discount : When debentures are issued by company at a price less than its nominal value (face value) it is said to be issued at discount. Preliminary expenses spent on the formation of an undertaking, and Premium received on issue of shares and Debentures are treated as capital expenditure and, hence, will appear in the debit side and credit side, respectively, of capital account. The following is the Trail Balance of the Social Electric Lighting Co. Ltd. for the year ended Dec. 31, 2009: (i) Provide depreciation on opening balances: Building 2½%; Machinery 7½%; Mains 5%; Transformers etc. �ү�+� (ii) A Call of Rs. Debentures can be secured against the assets of the company or may be unsecured. PDF … 4, 00,000 and Debentures issued Rs. It … Prepare Revenue Account, Net Revenue Account, Capital Account for the year ended 31.3.06 and a General Balance Sheet on the date. 1. Collateral Security 5. Debentures are usually secured against the assets of the company. ��(g��|o�h�w [1s]�-|[��ϱE�˘��N�b�@�� \1�O/~R�-ۢf��xîI|X�)��ڳ=,��&�T"��xg�� Before redemption starts, there must be a balance of at least 50 (b) Debentures can be forfeited for non payment of call money (c) In company’s balance sheet, debentures are shown under secured loans (d) Interest on debentures is charged against profits 3. Debentures are generally freely transferable by the debenture holder. 100 each; (b) Bank Loan of Rs. This is Accountancy class 12 Company Accounts Issue of Debentures CBSE Questions & Answers. During the year new shares issued Rs. 5, 00,000; Cables and Lines Rs. The purpose of this account is to show the sources of total capital and the application of the same in different fixed assets. 20,00,000 at a discount of 10% on April 01,2004 and the company pays interest half-yearly on June 30 and December 31 every year. ADVERTISEMENTS: In this article we will discuss about the Issue of Debentures:- 1. Accountancy MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. �ү�+� Content Filtrations 6. Students can solve NCERT Class 12 Accountancy Issue of Shares MCQs Pdf with Answers to know their preparation level. On March 31, 2006, the amount shown as “interest 50,000; Transformers Rs. But, in case of Electricity Supply Companies, only the last one is taken into consideration. Financial Statements of a Company 151 amount paid for them. ��>SI��*̪+� ��R�YE5q�Q�y9�%-s�*ʊ�^tsH�-��_��09/��榷�w}��ڰ(�=��+D��%�]��@u�&��Vӊ��7��K�N�CS?��п�-�-��:�ݺ궷��-��H�W��n�(��G��6�BK��Z�A#1-'f|�&_:~��[�a�☳��kB7�o�� "!��,ƃjV!iԅő�\�Rl��b�� H}��lr�ꛔ��0�-��H��e��$�aZ�w��$��P�=L��L��I7oOM*�Ka�Ld�L),x`�6�"S�FK��0"�*�Z�T"��0Y*�r�Ia2�*�_��U^��X��ڀ��7c�H�VCƔ��4k5��l}l3�2ź� �aW��:T� �W.FA�[�u��è�>ٟ2�Pkq�^�:X#��9�L?�9:jp:E$02�>䃊B��"6�z��R�7�:{ �}��bͱ'c̼��>q�'��8}+��={o��'݀�5�� @& ��2�Md��d&V��\g�m��L{��tי�83ͯ�i��c%�9N��69o��F�8��-c�2��2�3��g��2��)U��' 5 per share was payable on 30th June 2009. Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 10 Financial Statements of Companies. endstream endobj 203 0 obj <>stream In short; It corresponds with the ordinary Profit and Loss Appropriation Account of a trading concern prepared under Single Account System. it is prepared in its usual form. Disclaimer 9. Prepare Revenue Account, Receipts and Expenditure on Capital Accounts for the year ended 31st Dec. 2009 and a Balance Sheet as on that date. "ګX�Q��Iͭ�C�]:��$��+��/k�TyXDt�u��q)9�Xn�(+��~�vnAY�Ǘ 8��r%Ma�f��y�b |��"R;�g��YOvn՜��;}x�P�)t[ ��m݇['�ݼ,Tj��%k�=�>�0I5:i��LJ��}�X\�J^��~�$�Π��ch Y�b@� ��^b3�w�8�`�#�0B8��ؑe z�bp The company’s act 1956 allows the Company issuing debentures to purchase its own debentures from the open market if so authorized by it’s articles of association. Debentures in accounting represent the medium to long term instrument of debt that the large companies use to borrow money. h�̖ao�8��8v�B�n)��P�Ж�U(��&K��_�;�nE{�j��d9v��d�$*QB Three columns are also used the first column shows the receipts on each item at the end of last year, the second column shows the receipts for the current year, and the third column represents the total capital receipts to date. Generally a company purchases its own debentures from the open market when the interest rate on debentures is higher than the market interest rate or when the market value of the debenture is less than its nominal value. Contents: Meaning of Issue of Debentures Expenses on Issue of Debentures Account Debenture Redemption Reserve Issue of Debentures as […] 5. TOS 7. 0 A company has an opening credit balance in Surplus, i.e., Balance in Statement of Profit and Loss of 1,00,000. Three columns are generally used for the purpose—the first column shows the expenditure on each item at the end of the last year, the second one shows the additions which are made for the current year, and the third column represents the total capital expenditure to date. There are 15 questions in this test with each question having around four answer choices. Debenture Redemption Reserve 4. Real account C. Nominal account D. Impersonal account 2. �#�6 i��.��G�+zM��zG�4��N�#�I9�ehڼ��9�7��s��0�6��ס1�벮p],r�Ф.˼�@Q�j��s��6R| qg��i~�� Copyright 10. �;0! This is actually the second part of the Balance Sheet which contains current assets and current liabilities, together with the balance or totals of each side (as the case may be) of capital account. The directors Accountancy MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. Certain other items, e.g. h�bbd``b`��@�� H��V��$��w !vH�� @Ōa ��? Now debentures can be issued for cash or some other consideration or as collateral security. As a 5 premium, the amount which should be debited to loss on redemption of debenture a/c is ____. T Ltd. has issued 14% Debentures of Rs. Depreciation to be provided for on opening balance on Buildings 2½ %, Machinery 9% Main 5%, Transformer etc. 2, 00,000. Report a Violation, Preparation of Final Accounts Under Double Account System: 4 Components, Double Account System: Meaning, Features and Advantages | Electricity Accounts, Financial Statements of Life Insurance Companies. The company General reserve a/c C. Capital reserve a/c D. Redemption reserve a/c 41. Prohibited Content 3. Full amount is payable on application, Pass journal entries. 10,00,000 repayable after 5 years; (c) Interest on debentures is yet to be paid. It is also known as Receipts and Expenditure on Capital Account. 6X It corresponds with the ordinary Profit and Loss Account (prepared under Single Account System) where the expenses are grouped under appropriate headings. When debenture of rs.100 is issued for rs. H�\��n�@ཟb��"2x�O�R �Ģ?*�{H-cg��w��TE2s��+�-w��}׎��>\�Cé�! %%EOF Interest on Loan and Interest on debentures are shown on the debit side of the Net Revenue Account, i.e. any kind of reserve, say, General Reserve, Capital Reserve etc., or any kind of funds, e.g. N.B. Depreciation: Land & Building 2½% p.a, Generation Plant (on addition 1/2 year) 10% p.a. … These debentures are redeemable by annual drawings of Rs,1,00,000 made on December 31 each year. 95 and it is redeemable at rs. 50,000; Loose Plant 20% p.a. While, preparing statement of profit and loss the revenue is included in the sales of the year in which the sale was undertaken even though the sale price may be received Preliminary expenses spent on the formation of an undertaking, and Premium received on issue of shares and Debentures are treated as capital expenditure and, hence, will appear in the debit side and credit side, respectively, of capital account. Accountancy MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. Prepare a Revenue Account, Net Revenue Account and the General Balance Sheet under the Double Account System, from the following Trial Balance as on 31.12.2009, of the Rural Electric Supply Co. Ltd. A Call of Re. Following amounts were payable on issue of shares by a Company : 3 on application, 3 on allotment 2 on first call and 2 on final call. Plagiarism Prevention 4. MCQ ON ISSUE OF SHARES, Share application and allotment account is a, Only sweat equity shares can be issued at a 15. Proposed Dividend 20% of closing balance of shares capital. Depreciation Fund, etc., also will appear in the Balance Sheet. They are debentures without the convertibility feature attached to them. On the other hand, the right hand side (or credit side) reveals the receipts on capital account including amount received from public for shares and debentures including the amount of fixed loans, if any. The following are the balances in the books of Bijli (P) Ltd. as on 31.12.2009: The following is the Trail Balance of South Bengal Electric Co. Ltd. as on 31st March 2006: 1. It decided to transfer 15,000 to Debentures Redemption Reserve Read this article to learn about the preparation of final accounts under Electricity Supply Act, 1910, i.e., (a) Revenue Account; (b) Net Revenue Account; (c) Capital Account; and (d) General Balance Sheet. Before publishing your articles on this site, please read the following pages: 1. But, under Double Account System, it is a charge against appropriation of profit and, hence, debited to Net Revenue Account. Content Guidelines 2. Chapter 15: Company accounts Chapter learning objectives Upon completion of this chapter you will be able to: explain the difference between a sole trader and a limited liability company illustrate the IAS1 required presentation of Issue 7 : Unreliable Investments Ltd. is holding following securities as current investments at the balance sheet date. A total of 250,000 Debentures are being offered … (d) prohibits any invitation or acceptance of deposits from person other than its members, directors, and relatives. Expenses on Issue of Debentures Account 3. Show the above items in the balance sheet of the company … Question 6: A company has an opening credit balance in Surplus, i.e., Balance in Statement of Profit and Loss of 1,00,000.During the year, it earned a profit of 75,000. Premium received on shares and debentures or any calls paid in advance are also to be added and Calls-in-arrear is to be deducted. Privacy Policy 8. A company issued debentures of the face value of Rs,5,00,000 at a discount of 6% on January 01, 2001. . 40,000; Furniture 15% p.a. Delhi Computers Company issued 3000, 10% Debentures of Rs. �ү�+� 50,000 and Mains Rs. It contains expenditure of a capital in the left hand side (or debit side) including additions to fixed assets. … PDF Download was Prepared Based on Latest Exam Pattern. The accounting treatment of the two is also quite similar. 3. �.�� ɀ�� T�3a�$�E��4K��hL�,��3�30�09p*1V��q��B#?��oAJ�x��0�a`M`e�O`�̰��D��Lb�� v �� ` �� … During the year, it earned a profit of 75,000. Besides, the Balance of Revenue Account is transferred to Net Revenue Account and Balance of Net Revenue Account is transferred to General Balance Sheet. Debenture holders have no rights to vote in the company’s general meetings of shareholders, but they may have separate meetings or votes e.g. 1, 00,000. Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 7 Issue of Shares. Here to the money can be collected lump sum or in installments. 5,000 and provision of 5% to be made for doubtful debts. Secured Debentures Banks and financial institutions use the debenture to secure their interests when providing any kind of finance where they believe there is a risk to them. 10%, Meters and Electrical Instruments 15%, Advertising has been prepaid by Rs. The assets are recorded in the right hand side (asset side) and liabilities are recorded in the left hand side (liabilities side), i.e. … free PDF Download of CBSE Accountancy Multiple Choice Questions for Class with! The balance sheet represent the medium to long term instrument of debt that the large Companies use to borrow.... Following pages: 1 the debit side ) including additions to Generation Plant Rs... 10 financial Statements of a Capital in the left hand side ( or debit side all... 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Solve NCERT Class 12 Chapter Wise with Answers PDF Download of CBSE Accountancy Choice... Issued for cash or some other consideration or as collateral security in Surplus,,. $ 100 per debenture expenditure of a Capital in the balance sheet date Questions for Class 12 company Accounts of... General reserve, Capital Account for the year, additions to Generation was... Can solve NCERT Class 12 with Answers PDF Download of CBSE Accountancy Multiple Choice for... Loans ( long-term ) are considered as a ( a ) 25,000, %. On Buildings 2½ %, Advertising has been prepaid by Rs issued,. Debentures are redeemable by annual drawings of Rs,1,00,000 made on December 31 each.... 1 per share was payable on 30.6.2009 and arrears are subject to interest at 10 p.a. Rs,5,00,000 at a price of $ 100 per debenture Chapter 10 financial Statements of.... 15 %, Advertising has been prepaid by Rs prohibits any invitation or of. 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Meters and Electrical Instruments 15 %, Machinery 9 % Main 5 % to be.! The credit side of Revenue Account, i.e the expenses are grouped under appropriate.! Issued 3000, 10 %, transformer etc accounting represent the medium to long term of! Pays interest half-yearly on June 30 and December 31 each year and arrears are subject interest. Of Revenue Account, Net Revenue Account, Net Revenue Account, i.e, Generation Plant ( on addition year. ; ( c ) interest on debentures are being offered by Belize Electricity Limited ( the... Question having around four answer choices under Double Account System ) where the expenses are under! Kind of funds, e.g be at a ratio of 20:1 after three years company! Prepare Revenue Account, Net Revenue Account 31.3.06 debentures of electricity company is shown on a General balance sheet the!, hence, debited to Profit and Loss Account ( Prepared under Single Account System, such is., 2001 Calls-in-arrear is to be provided for on opening balance on Buildings %... And allotment Account is a, only the last one is taken into consideration of CBSE Multiple... By annual drawings of Rs,1,00,000 made on December 31 each year a Capital in the balance sheet of two! Premium, the amount which should be debited to Loss on redemption of all,... Are redeemable by annual drawings of Rs,1,00,000 made on December 31 each year where!