The Board of Directors of Sen & Co. Ltd. consists of two whole-time Directors and three part-time Directors. (5) The balance of Rs. (v) The amounts deposited in Cash with the Company by consumers by way of security. At the same time, they should have taken previous permission from the Central Government for this purpose. final accounts financial accounts prepared at the end of an accounting period. 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 In addition, certain entries are Valuation of Goodwill and Shares. 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. 3,51,450) must be refunded to the company u/s 309 (5A). • 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 2. (iii) The amounts of any loans borrowed from organisations or institutions approved by the State Government. (6) The Directors proposed a dividend @ 20%. (6) Balance at Bank includes Rs. We have prepared a Multiple Choice Questions (MCQs) test for Final Accounts Chapter for the ease of students to clear their concepts. 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. IPCC Students Accounts of Electriciy Company Format in Excel Sheet. Calculating the Remuneration Paid to the Directors: 3. Every businessman enters into business activities to earn profit. When any fixed asset is discarded due to obsolescence or any other reason, the w.d.v. TOS 7. Final Accounts Training is the ultimate goal in your career as an accountant in the field of Accountancy. Disclaimer 8. 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. 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. Explanation. 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. Sundry Debtors, Bills Receivable, Prepaid Expenses, Accrued Income, Loose Tools, Insurance Claim, Closing Stock, Stock of Stationery, Stock of Postage Stamps, etc. 3,59,550 – Rs. 200. 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. (iv) The amount of any debenture issued by the Company. 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. (ii) The cost of intangible assets (i.e., underwriting commission, preliminary expenses etc. 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. 1,50,000 in the loan account with State Financial Corporation is inclusive of Rs. Company financial statements consist of: Income statement (profit and loss account) Statement of changes in equity 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. 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. Trading Account. The following adjustments are yet to be made: (i) Investment Allowance Reserve to be created Rs. This reserve may also be appropriated in annual instalment spread- over within a period of 5 years. According to paragraphs III, IV and V of the Sixth Schedule, every electricity company is required to maintain Contingencies Reserve. The whole-time Directors are entitled to a monthly salary of Rs. Are you looking for problems and solutions of final accounts of the companies? (8) The company had a contract for the erection Of machinery at Rs. Final Accounts MCQs test consists of 20 questions, every question must be answered to move to the next question. 8,100 (Rs. 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'. 1,50,000 which is still incomplete. 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. 2. 3,000 each. 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. Balance Sheet Only two methods are recognised here for the amount of depreciation on fixed assets, viz., Compound Interest Method and the Straight Line Method. Profit and Loss Appropriation Account. (viii) The amount carried forward at the beginning of the year of account to the Consumers’ Benefit Reserve. 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. But at the time of submitting their accounts to the Central Government they have to follow the prescribed format framed by the Indian Electricity … The Balance Sheet depicts the financial position of the business. (vi) The amounts standing to the credit of the Development Reserve at the close of the year of account. The most important and crucial function of financial accounting is to ascertain the financial position and the profitability of the business. 45,000 @ 7^%. This MCQs test will help students to prepare for their objective exams as well as their interviews. of the same shall be charged against Contingency Reserve and, if any discarded assets are sold, Contingency Reserve will be credited. 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. is Rs. 100 each, fully paid-up. Preparation of Profit and Loss Account of a Company: The following balance appeared in the books … All business transactions are first recorded in a journal. These papers touch upon various topics on accounting. 52,000 are due for more than 6 months. (b) 10,000,10% Redeemable Preference Shares of Rs. IPCC Students Accounts of Electriciy Company Format in Excel Sheet. 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. According to paragraph II of the Sixth Schedule, if the amount of clear profit is in excess of the amount of reasonable return to the extent of 20% in any year, such excess shall be applied as under: (i) 1/3rd of such excess, not excluding 5% of the amount of reasonable return, is to be placed at the disposal of the undertaking (as a reward for efficiency). Image Guidelines 4. Trading Account. Thus the final accounts will consist of a profit and loss account and balance sheet. Failure … 7. The monetary value associated with an asset acquired is said to be its cost. Trading account, Profit and Loss account and Balance Sheet together are called final accounts. (iii) The original cost of work-in-progress. Browse more Topics under Final Accounts 100 each. To Buy Complete Classes Visit - https://www.StudyAtHome.org or Call: 8737012345. b) The manual also has the approval of the Executive Director and the full authority of the Board of Trustees. departmental and branch accounts. 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. 2)Profit and Loss account. 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. Trading Account. Profit and Loss Appropriation Account. Final Accounts also consists of various adjustments. IPCC Students Accounts of Electriciy Company Format in Excel Sheet. 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’. 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. financial reporting of insurance, banking and electricity companies. Accounts of Companies 5 company for a period of not less than eight years immediately preceding the relevant financial year. (vii) The amounts standing to the credit of the Tariffs and Dividends Control Reserve at the beginning of the year of account. Building @ 2% p.a., Plant and Machinery @ 10% p.a., Furniture @ 10% p.a. 1. 10,424 (‘000). (3) Interest accrued on Securities Rs. 5,000 Audit Fees and Rs. 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. 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. (iv) Compulsory investments made on account of contingencies reserves. Content Filtrations 6. Trading Account. 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. Depreciation must be provided on all fixed assets. ... CA Final New Financial Reporting Strategic Financial Management Corporate and Economic Laws ... Electricity Company Balancesheet & P& L Formats Download Preview. 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. Interest on accumulated balance will, however, be allowed as an expense from revenue. Article shared by : ADVERTISEMENTS: In this article we will discuss about the accounts of electricity companies, explained with the help of a suitable illustration. (a) Show the computation of commission to the Managing Directors, and. Trading account of a joint stock of a company is the first main set of account of final accounts. 2,75,000 maturing on 30th June 1998 have been discounted. 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). (v) The amount of working capital, being the monthly average or, ½ of stores, materials and supplies including. (a) full in hand at the end of each month of the year of account. 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. 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. 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. Final accounts gives an idea about the profitability and financial position of a business to its management, owners, and other interested parties. 3)Balance sheet. Saharanpur Electricity Ltd. earned a profit of Rs. 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. (IPCC Gr-II) Important Changes: The earlier syllabus (study material of ICAI) included the following, in this chapter: 1. 700 for out of pocket expenses paid to the auditors. ... [Revised Format]Company Final Accounts -kauserwise - Duration: 35:00. 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. ET Limited are in the midst of finalising their accounts for the year ended 30th September 1999. It means capital employed. 2. Final Account consists of the following:- 1)Trading account. 100 each, fully paid-up. The loan is secured by hypothecation of the Plant and Machinery. (b) Prepare the Balance Sheet of the company, based on all the above. Preparation of Balance Sheet of a Company as Required under Part IB of Schedule VI of the Companies Act, 1956: 5. “Final accounts consist of trading account, profit and loss account and balance sheet. (7) The taxation provision shown in the Trial Balance is after payment of taxes for assessment up to 31st Dec. 1999. All limited companies must publish their financial statements at the registrar of companies (for public inspection). 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. IPCC Students Accounts of Electriciy Company Format in Excel Sheet. This is because the business, instead of trading in goods, supplies services. These final tallies are prepared for a specific period. ... CA Final New Financial Reporting Strategic Financial Management Corporate and Economic Laws ... Electricity Company Balancesheet & P& L Formats Download Preview. This document is highly rated by B Com students and has been viewed 3234 times. 1. It is also known as Modified Sinking Fund Method. 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. In this article we have compiled top five accounting problems on final accounts of the companies with its relevant solutions. 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. (8) The only liability for taxes is in respect of profit for 1999 for which a provision of 60% on net profit is considered. A Profit and Loss Account has been prepared in draft. The Electricity Companies may also prepare their accounts as per Schedule VI of the Companies Act, 1956, for the purpose of informing their shareholders. You are at the right place! Final accounts of companies including managerial remuneration, disposal of profits and issue of bonus shares. Trading account, Profit and Loss account and Balance Sheet together are called final accounts. (ii) The amounts of any loans advanced by the State Electricity Board. 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. 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. company reporting in an increasing ... accounting issues 1 Financial reporting in the power and utilities industry. 198 of the Companies Act. 3,51,450 as per Sec. Topics discussed in this video Accounts Of Electricity Company. 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. Chapters 8 and 9 are devoted to accounting for special transactions i.e. 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. on accounting and reporting concerns specific to renewable energy. Kauser Wise 334,490 views. (7) Bills Receivable for Rs. (vi) An amount equal to ½% on the balance of the Development Reserve. 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. Thus the final accounts will consist of a profit and loss account and balance sheet. Profit and Loss Account. Prohibited Content 3. Total amount of depreciation must be 90% of the original cost of fixed assets. Managing Director’s commission will be @ 1% on Rs. excluding goodwill). 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. 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. The preparation of Company Final Accounts include the preparation of a set accounts at the end of accounting year/period. 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. 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. 3234 times Choice Questions ( MCQs ) test for final accounts Training is the last stage of the Companies in... 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