2. Final account preparation involves preparing a set of accounts and statements at the end of an accounting year. 8,100 (Rs. It is also known as Modified Sinking Fund Method. 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. According to paragraphs III, IV and V of the Sixth Schedule, every electricity company is required to maintain Contingencies Reserve. Final Accounts also consists of various adjustments. Valuation of Goodwill and Shares. According to paragraphs III, IV and V of the Sixth Schedule, every electricity company is required to maintain Contingencies Reserve. This document is highly rated by B Com students and has been viewed 3234 times. 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. They must comply with the Companies Acts which describe the ‘form and content’ of the financial statements. But at the time of submitting their accounts to the Central Government they have to follow the prescribed format framed by the Indian Electricity … 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. These papers touch upon various topics on accounting. 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. 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 Trading 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. Terms of Service 7. Topics discussed in this video Accounts Of Electricity Company. 3,51,450) must be refunded to the company u/s 309 (5A). Dec 23, 2020 - Accounts of Electricity Companies - Electricity Companies, Advanced Corporate Accounting B Com Notes | EduRev is made by best teachers of B Com. ... CA Final New Financial Reporting Strategic Financial Management Corporate and Economic Laws ... Electricity Company Balancesheet & P& L Formats Download Preview. 16,585 = Rs. 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. 5,400 (‘000); (ii) Provision to be made for Income-tax in Rs. company reporting in an increasing ... accounting issues 1 Financial reporting in the power and utilities industry. Profit and Loss Appropriation Account. Final Accounts Training is the ultimate goal in your career as an accountant in the field of Accountancy. 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 addition, they are to get 8% commission and the part-time Directors 1% commission on the profits of the company. 2. Thus the final accounts will consist of a profit and loss account and balance sheet. 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. Disclaimer 9. (4) Schedules need not be given. Depreciation must be provided on all fixed assets. Browse more Topics under Final Accounts The following adjustments are yet to be made: (i) Investment Allowance Reserve to be created Rs. Sundry Debtors, Bills Receivable, Prepaid Expenses, Accrued Income, Loose Tools, Insurance Claim, Closing Stock, Stock of Stationery, Stock of Postage Stamps, etc. 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. Balance Sheet. 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. Profit and Loss Appropriation Account. Are you looking for problems and solutions of final accounts of the companies? 3. 100 each, fully paid-up. Interest on accumulated balance will, however, be allowed as an expense from revenue. 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? In accounting, the term cost refers to the expenditure or sacrifice made to acquire something of value. All limited companies must publish their financial statements at the registrar of companies (for public inspection). Any excess over 20% of reasonable return must be refunded to customers. departmental and branch accounts. 10,424 (‘000). on accounting and reporting concerns specific to renewable energy. (IPCC Gr-II) Important Changes: The earlier syllabus (study material of ICAI) included the following, in this chapter: 1. 166. 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. (iv) Compulsory investments made on account of contingencies reserves. TOS 7. (iv) The amount of any debenture issued by the Company. Accounting Standards, International Public Sector Accounting Standards and the requirements of the Ghana companies code, 1963 (Act 179). Image Guidelines 4. Image Guidelines 5. This reserve may also be appropriated in annual instalment spread- over within a period of 5 years. The Balance Sheet depicts the financial position of the business. 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 of companies including managerial remuneration, disposal of profits and issue of bonus shares. (8) The company had a contract for the erection Of machinery at Rs. 17,40,000 during the year ended 31st March 1997 after charging interest on debentures amounting to Rs. 2,75,000 maturing on 30th June 1998 have been discounted. 1. Trading Account. ... [Revised Format]Company Final Accounts -kauserwise - Duration: 35:00. 45,000 and Salaries and Wages Rs. However, groupings should form part of the answer. 198 of the Companies Act. Total amount of depreciation must be 90% of the original cost of fixed assets. (ii) The cost of intangible assets (i.e., underwriting commission, preliminary expenses etc. These undertakings are usually incorporated under Special Acts and, as a result, the form of accounts is prescribed by, special statute. 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. (iii) The amounts of any loans borrowed from organisations or institutions approved by the State Government. 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 … 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. The monetary value associated with an asset acquired is said to be its cost. (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. (2) 2,000 Equity shares are issued for consideration other than cash. 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. 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 … The loan is secured by hypothecation of the Plant and Machinery. In this article we have compiled top five accounting problems on final accounts of the companies with its relevant solutions. Balance sheet, which is prepared to know the financial … Thus the final accounts will consist of a profit and loss account and balance sheet. 7. Profit and Loss Account. 2. and Motor Vehicles @ 20% p.a. Copyright 9. 2)Profit and Loss 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. 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. 35:00. 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. Profit and Loss Account. 3. Trading account of a joint stock of a company is the first main set of account of final accounts. Kauser Wise 334,490 views. (vi) The amounts standing to the credit of the Development Reserve at the close of the year of account. Plagiarism Prevention 5. Financial Statement of Electricity Companies. (viii) The amount carried forward at the beginning of the year of account to the Consumers’ Benefit Reserve. Prohibited Content 3. (iii) The original cost of work-in-progress. You will find perfectly drafted accounting case study samples and examples with accurate solutions.. The account balances, as rounded-off to the nearest thousands, are listed below: The authorised capital is 3,50,000 Equity Shares of Rs. We have prepared a Multiple Choice Questions (MCQs) test for Final Accounts Chapter for the ease of students to clear their concepts. Objectives of Final Accounts 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. 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. Calculating the Remuneration Paid to the Directors: 3. 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. (v) The amount of working capital, being the monthly average or, ½ of stores, materials and supplies including. 100 each, fully paid-up. 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. Chapters 8 and 9 are devoted to accounting for special transactions i.e. 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. | Accounting, Final Accounts of General Insurance Companies | Accounting, Problems on Final Accounts of the Companies. 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. State Government Machinery at Rs and profit and loss account and balance Sheet... [ Revised Format ] final. Increasing... accounting issues 1 financial Reporting in an increasing... accounting 1... 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