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. (vii) The amounts standing to the credit of the Tariffs and Dividends Control Reserve at the beginning of the year of account. 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. A balance sheet reflects the financial position of a business for the specific period … 3. The Company Final Accounts consists of: 1. Copyright 9. Browse more Topics under Final Accounts In addition, certain entries are on accounting and reporting concerns specific to renewable energy. This is because the business, instead of trading in goods, supplies services. These undertakings are usually incorporated under Special Acts and, as a result, the form of accounts is prescribed by, special statute. 7,500 for interest accrued but not due. Company financial statements consist of: Income statement (profit and loss account) Statement of changes in equity This MCQs test will help students to prepare for their objective exams as well as their interviews. 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. As regards the depreciation method that can be applied, the Act … 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. (a) full in hand at the end of each month of the year of account. (ii) The amounts of any loans advanced by the State Electricity Board. However, groupings should form part of the answer. 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. 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 … Disclaimer 9. 2,000 with Perfect Bank Ltd. which is not a Schedule Bank. is Rs. 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? 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. 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. Terms of Service 7. (a) Show the computation of commission to the Managing Directors, and. 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. To Buy Complete Classes Visit - https://www.StudyAtHome.org or Call: 8737012345. All limited companies must publish their financial statements at the registrar of companies (for public inspection). 100 each, fully paid-up. 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. 700 for out of pocket expenses paid to the auditors. (3) Interest accrued on Securities Rs. This document is highly rated by B Com students and has been viewed 3234 times. In this article we have compiled top five accounting problems on final accounts of the companies with its relevant solutions. 4. The preparation of a final accounting is the last stage of the accounting cycle. 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 … ET Limited are in the midst of finalising their accounts for the year ended 30th September 1999. 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 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. 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. In addition, they are to get 8% commission and the part-time Directors 1% commission on the profits of the company. (vi) An amount equal to ½% on the balance of the Development Reserve. 45,000 @ 7^%. (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. 2. According to paragraphs III, IV and V of the Sixth Schedule, every electricity company is required to maintain Contingencies Reserve. The Board of Directors of Sen & Co. Ltd. consists of two whole-time Directors and three part-time Directors. The loan is secured by hypothecation of the Plant and Machinery. 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. (2) 2,000 Equity shares are issued for consideration other than cash. 10,424 (‘000). 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 Content Guidelines 2. You are at the right place! 2)Profit and Loss 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. (vi) The amounts standing to the credit of the Development Reserve at the close of the year of account. 1. company reporting in an increasing ... accounting issues 1 Financial reporting in the power and utilities industry. Any excess over 20% of reasonable return must be refunded to customers. 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