17

Accounts of Electric Supply

Companies
The Double Account System
The Double Account System is a method of presenting annual financial statements of
public utility concerns
(formed by Special Acts of Parliament) like tramways, railways, gas, water and electricity companies. t is a
special method of presenting the Final Accounts rather than a special system of keeping accounts. Here, all
accounts are also kept under the normal double entry system. The main objective of this system is to disclose
how much capital has been raised and how such
capital has been utilised in the acquisition of fixed assets. To
achieve this, the Balance Sheet is prepared in two parts, the first being a statement of
on Capital Account and the
Receipts and Expenditure
second, the General Balance Sheet.
Features of the Double Account System
) The conventional Balance Sheet is divided into two parts : (a) Receipts and Expenditure on Capital
Account; and (b) General Balance Sheet.
(ii) Financial statements are prepared in greater detail, accompanied by a number of statistical data and
statements.
(1) Along with share capital and debentures, premium (or discount) on issue of shares and debentures are
permanently retained in the books as capital items.
(v) Long-term loans and debentures are treated as part ofthe capital acquired and are shown in the Receipts
and Expenditure on Capital Account.
(V) Revenue Account is prepared in place of Profit and Loss Account. Likewise, Profit and Loss
Appropriation Account is named as Net Revenue Account.
(vi) Interest on loans and debentures are shown as appropriations in the Net Revenue Account.
(VI) Cost of replacement of an asset not involving any increase in capacity is charged to Revenue
Account.
(Vii) The fixed assets are shown at original cost in the Receipts and Expenditure on Capital Account.
Depreciation is not shown as a deduction from the original cost of the assets but as an accumulated
fund in the General Balance Sheet (Liabilities side).
17.2 Accounts of Electric
Supply Companies
(ix) Preliminary expenses on formation are treated as capital expenditure and shown in the Receipte
Expenditure on Capital Account. Receipts and
(x) Capital Account appearing on the assets side of the General Balance Sheet, represents
inal Accounts
the total
total
expenditure to date on assets which may or may not be in existence on the date of the Fina Account
(xi) General Reserve, Sinking Fund, Investment Fluctuation Fund, etc., are shown on the liabili
bilities side
of the General Balance Sheet.

Derence between the Single Account System and the Double Account System
U n d e r the Single Account System, a single Balance Sheet is prepared to Snow ne nancial position

the last of the accounting period in the form of a statement of assets and liabilities. But unda
the Doubleday
on Account System, the Balance Sheet is split into two parts, (1) Keceipts and Expenditure
on Capital Account, and (ii) General Balance Sheet.
a Balance Sheet is to give a trs
2. Under the Single Account System, the main purpose of preparing true
and fair view of the state of affairs of the Company, whereas under the Double ACCOunt System, the
main purpose of preparing two Balance Sheets is to show how the amount of capital has been received
and how the same has been used for acquiring fixed assets.
The Single Account System, shows existing fixed assets are shown in the Balance Sheet after
3.
deduction of depreciation. The Double Account System shows fixed assets are shown in the Capital
Account at original cost (some of the assets may or may not be in existence on the date of the account)
However, accumulated depreciation is shown on the liabilities side of the General Balance Sheet
4. The Single Account System shows the income statement under Profit and Loss Account but under
the Double Account System, it is prepared as:
(i) Revenue Account; and (i) Net Revenue Account.
5. Under the Single Account System, interest on debentures, loans, etc., are shown in the Profit and Loss
Account as a charge against profit. But under the Double Account System, these items are shown in
the Net Revenue Account as an appropriation.
Advantages of the Double Account System
The main advantages of the Double Account System are as under
a)Financial statements are prepared in a prescribed form which ensures that the business renders most
efficient service to the public at a moderate cost, and at the same time a reasonable return is earmed
on capital employed.
b) The presentation of financial statements is easily understood by different claimants of capital as to
how the amounts provided by them have been utilised
by the business. The
on Capital Account presents the position regarding the sources of capital asReceipts
and Expennut
also its utilisation in tne
form of assets and liabilities.
(c) Since the depreciation fund is compulsorily created, assets can be replaced without any
working capital or cash resources. strain
(d) Revenue Account shows clearly the periodical results of the actual operating activities of the
and the net revenue account shows all the items which are extraneous to the actual workingcoceu
or
business.
(e) The prescribed form used lor preparing financial statements by the different concerns rendenng
similar services is standardised, which helps in compiling the statistical returns in an easy
mannel
Disadvantages of the Double Account System
The main disadvantages ofthe Double Account System are as under
(a) The Revenue Account fails to disclose properly the trading results of the business concern since
does not include interest paid or received. Also, Since renewals are charged to revenue, it may lead
a distorted picture of the profits earned, or losses incurred, of any year
 Modern Accountancy 17.3

.
As the assets
the
are
assets are. shown at their historical costs in the Receipts and Expenditure on Capital
(b) Sheet
(b) their
and is unable
their respective
to portray
respective depreciations
the financial
on theposition
liabilities of the General Balance Sheet. the Account
of thesidecompany.
O Balance
he Receipts and Expenditure on Capital Account does not represent the true position as some assets
() e continued to be shown at cost price even after their estimated economic lives.
are

preliminary expenses like cost of special acts or cost of putting forward new bills are not
Some preliminary
(d) permanently capitalised.
The system has some difficulty in drawing a proper distinction between capital and revenue expenditure.
(e expenses on repairs and renewals in different years and charging them to the Revenue Account
in which they are ineurred, leads to a distorted picture of the profits earned or losses incurred, since
there incurs no expensein some years and heavy expenses in others.
There is a possibility ot overlooking the amount of provision for depreciation in case of the assets
which are so much in use.
Al In fact, concerns maintaining accounts under the Double Account System are also to prepare accounts
under the Double Entry System for reasons more than one.
) The different statistical returns annexed to the financial statements are not easily understood by the
general public.
When an asset requires replacement, it is not always possible to calculate the amount to be charged
)
to revenue.

Final Accounts under the Double Account System

System normally consists of:
Thefinal accounts under the Double Account
Revenue Account
(a) Revenue Account (b)Net
and
(c) Capital Account (Receipts and Expenditure on Capital Account)
d) General Balance Sheet
Revenue Account
debited with
trading or manufacturing concern. It is
This account is similar to the Profit and Loss Account of a
on fixed assets is charged
items of and credited with various items of incomes. Depreciation
various expenses
Fund Account. Generally, expenses are shown
y debiting the Revenue Account and crediting the Depreciation
underthe following broad headings:
Rent, Rates and Taxes, (E) Management Expenses,
A)Generation, (B) Distribution, (C) Public Lamps, (D)
FLaw Charges, (G) Depreciation, (H) Special Chargesfor lighting, (2) Sale ofenergy for power, (3) Sale of
Sale of energy
arly, incomes are grouped as: (1) (6) Rent receivable, and (7) Transfer
Public lightings, (5) Rental ofmeters,
under special contracts, (4)
fees, etc.
Indian Electricity Act,
1910 is given below:
utory form of Revenue Account under
ended
Revenue Account for the year
. . . . .

Rs
Rs Particulars
Particulars
A.Generation By Sale of energy for lighting
ToFuel By Sale of energy for power contracts
To Oil
wastage, water By Sale of energy under special
o By Public lighting
To
Salary of
engineers By Rental ofmeters
Wages and
0 Repairs and gratuities By Rent receivables
B. Distribution maintenance By Transferfees
To By Other items
Salary of
lo Wages andengineer ByMiscellaneous receipts
o
Repairs and gratuities
maintenance By Sale of ashes
By Reconnection and disconnection fees
 Modern Accountancy 17.3

assets are shown at their historical costs in the

the
Receipts and Expenditure
Expenditure on Capital Account
(b) and their
liabilities side of the and
depreciations on the liabilitieeaps
and their respective depreciations General Balance Sheet, the Balance
Sheet is portray the financial position of the
unable to
he Receipts and Expenditure on Capital Account doescompany.
The Receipts and not represent the true position as some assets
c)nntinued to be shown at cost price even after their estimated economic
ar
preliminary
Some prelimina lives. new bills are not
expenses like cost of special acts or cost of putting forward
(d) permanentuy capitalised.
The system has .some difficulty in drawing a proper distinction between capital and revenue expenditure.
( The expenses on repairs and renewals in different years and charging them to the Revenue Account
in which they are incurred, leads to a distorted picture of the profits earned or losses incurred, since
there incurs no expense in some years and heavy expenses in others.
There is a of overlooking the amount of
(g) so
possibility
much in use.
provision for depreciation in case of the assets
which are
(h) In fact, concerns maintaining accounts under the Double Account System are also to prepare accounts
under the Double Entry System for reasons more than one.
T h e different statistical relurns annexed to the financial statements are not easily understood by the
general public.
When an asset requires replacement, it is nct always possible to calculate the amount to be charged
to revenue.

Final Accounts under the Double Account System

Thefinal accounts under the Double Account System normally consists of
(a) Revenue Account (b)Net Revenue Account
(c) Capital Account (Receipts and Expenditure on Capital Account) and
(d) General Balance Sheet

Revenue Account
concern. It is debited with
This account is similar to the Profit and Loss Account of a trading or manufacturing
incomes. Depreciation on fixed assets is charged
various items of expenses and credited with various items of
Fund Account. Generally, expenses are shown
by the Revenue Account and crediting the Depreciation
debiting
underthefollowing broad headings
Rent, Rates and Taxes, (E) Management Expenses,
(A) Generation, (B) Distribution, (C) Public Lamps, (D)
)Law Charges, (G) Depreciation, (H) Special Charges. Sale of
Sale of for lighting, (2) Sale of energy for power, (3)
energy
milarly, incomes are grouped as: (1) Rental of meters, (6) Rent receivable, and (7)
Transfer
under special contracts, (4) Public lightings, (5)
E
fees, etc.
Account under Indian Electricity
Act, 1910 is given below:
uOry form of Revenue
Revenue Account for
the year ended
=
Rs
Rs Particulars
A. Generation Particulars By Sale of energy for lighting
To Fuel By Sale of energy for power
To Oil By Sale of energy under special contracts
To wastage, water By Public lighting
Salary of
Wages andengineers
To By Rental of meters
0 Repairs and gratuities By Rent receivables

B.Distributof ion maintenance

To
By Transfer fees
By Other items
Salary
oWages andengineer By Miscellaneous receipts
o
Repairs and gratuties
maintenance
By Sale ofashes
disconnection fees
By Reconnection and
17.4 Accounts of Electric Supply Companie

C. Public Lamps
To Attendance and repairs
To Renewals
. Rent, rates and taxes
To Rents payable
To Rates and taxes
E. Management Expenses
To Director's remuneration
To Management
To General establishment
To Auditor of the company
F.Law Charges
To Law charges
G. Depreciation
To Lease
To Buildings
To Plant
To Mains
To Meters, etc.
H. Special Charges
To Bad Debts
To Balance carried to Net Revenue Account

Net Revenue Account

This is simiiar to the Profit and Loss Appropriation Account of a
treatment of interest on debentures and loans. In the Net Revenue
trading or manufacturing concern except the
Account, it is treated as appropriation of
profits. However, in ordinary cases, such interest is treated as a charge against profits and shown in the Profit
and Loss Account. The balance of the Net Revenue Account is shown in the General
Balance Sheet.
The Statutory form of Net Revenue Account under the Indian
Electricity Act, 1910 is given below:
Net Revenue Account for the year ended..
Particulars Rs Particulars Rs
To Balance from last year's Account By Balance from last year's Account
To Interest on loans By Balance brought from Revenue Account
To Contingency reserve
By Interest on Bank Account
To Interest on debentures
By Balance carried to General Balance Sheet
To Dividends
To Balance carried to General Balance Sheet

Capital Account (Receipts and Expenditure on Capital Account)

The main purpose of this account is to show total amount of
of fixed assets for carrying on the business. capital raised and its application for acquisiion
As per the statutory forms
(prescribed by the Indian Electricity Act, 1910) there are three columns on eu
side: (1) one showing balance at the end
of the previous year; (ii) disclosing the amount received/ spent aurs
the year; and (ii) balance at the end of the
year.

Points to Remember:
) Preliminary expenses on formation are treated as capital
(i) Premium received on issue of shares and expenditure.
debentures are shown on the Receipts side.
(i) Discount on issue of
shares or debentures are not shown separately. It is the
n the|
proceeds of shares or debentures. Only net deducted
proceeds are shown in the Capital Acounints
iv) Total expenditure is shown in the
assets side of the General Balance Sheet and Total ceipts
is shown in the liabilities side
of the General Balance Sheet. kee
 Modern Accountancy 17.5

Crm Of Capital Account under The Indian Electricity Act, 1910 is

Statutory
given below:
Receipts and Expenditure on Capital Account for the year ended ..

Expenditure Expendi Expendi Total

Receipts Receipts Total
ture up to ture
Expend Receipts
end of up to the during receipts
during iture
end of the year
previous the year
year previous
Rs Rs year
Rs Rs Rs RS
To Preliminary Expenses
By Ordinary shares
To Land By Preference shares
ToBuilding By Debentures
ToPlant By Loans
To Mains By Calls-in-advance
Transformers, motors, etc. By Other receipts
To
To Meters
To General stores
To Special items

Total Expenditure Total Receipts

To Balance of Capital
Account By Balance of Capital Account
to General Balance Sheet carried to General Balance sheet
caried

General Balance Sheet

Inthe General Balance Sheet, all the remaining assets and liabilities, likecurrentassets, curent liabilities, reserves,
re shown along with the total of receipts (on the liability side) and the total expenditure (on the asset side).
The Statutory form of General Balance Sheet under Indian Electricity Act, 1910 is given below:
General Balance Sheet as on....
Rs Assets Rs
Liabilities
To Capital Account By CapitalAcoount
To Sundry Creditors for Capital Expenditure By Stores in hand
To Sundry Creditors on Open Account By Sundry Debtors
To Net Revenue Account By Preliminary expenses
To Reserve Fund By Securities
To Depreciation Fund By Special tems
To Special ltems By Cash at bank
By Cash in hand

note that the above prescribed Balance Sheet is similar to an Ordinary Balance
tudents should
but unfortunately "To" and "By" have been used. In all our illustrations, we have avoided
neet
this anomaly.
lustration1 3lst December, 2001 on the Single Account System;
Sheet as on
ndaeollowing particulars, draw up: (a) Balance as at the same date on the Double Account System:
Sheet
eCapital Account and General Balance
) Authorised Capital: 20,000 shares of Rs 10 each
1,200 shares issued during the year).
10 each fully paid (including
u e d Capital 10,000 shares of Rs Debtors Rs 20,500; Reserve Fund Rs 25,000:
Creditors Rs 12,500; Trade
2% Debentures Rs 50.000: Trade Rs 22,000; Cash in
hand Rs 125.
Stock-in-trade
a t Bank
iv) Reserve Fund Rs 7,500;
stment at cost Rs 25,000 (market value : Rs 27,500).
(v) Rs 50,000; Building Rs 72,500; Land Rs 15,000:
assets-expenditure on Ist January, 2001: Machinery
A
(vi)
Additions during the year: Machinery Rs 17,500.
and Building Rs 10,000;
Fund: Machinery Rs 22,500
Vii) preciation
(vil)Profit and IC.U. B.Com (Hons.)- Adapted)
Loss Account Rs 10,125.
7.6 Accounts of Electric Supply Companies

Solution (a) Balance Sheet of ...

as on 31st December,2001
Liabilities Rs Rs Assets Rs
Fixed Assets
RS
Share Capital
Authorised Capital Land
20,000 Equity Shares of Rs 10 each 2.00.000 Building 72,500 15,000
Issued and Subscribed: Less: Accumulated Depreciation 10,000
62,500
10,000 Equity Sh. of Rs 10eachfully paic-up 1,00.000 Machinery 50,000
Reserve and Surplus Addition 17,500
Reserve Fund 25,000 67,500
Profit and Loss Account 10,125 Less: Accumulated Depreciation 22,500 45,000
Secured Loans investments
12% Debentures 50,000 Reserve Fund Investment (M.V. Rs 27,500)
Unsecured Loans Nil Current Assets, Loans and Advances 25,000
Current Liabilities and Provisions Stock in trade
Trade Creditors Trade Debtors
22,000
12,500 20,500
Cash at Bank
,500
Cash in hand
125
Miscellaneous Expenditure Nil
1,97,625 1,97,625
(b) Receipts and Expenditure on Capital Account for the year ended 31st December, 2001
Expenditure Expendi Expendi Total Receipts Receipts Receipts Total
ture up to tureduring Expend up to during the receipts
1.1.2001 the year iture 1.1.2001 year
Rs Rs Rs Rs Rs Rs
To Land 15,000 15,000 By EquityShares 88,000 12,000 1,00,000
To Building 72,500 72.500 By 12% Debentures 50,000 50,000
To Machinery 50,000 17.500 67500 Total Receipts 1,38,000 12,000 1,50,000
By Balance on Capital AVc 5,000
Total Expenditure 1,37,500 17,500 1,55,000 1,55,000
General Balance Sheet of.. as on 31st December, 2001
Liabilities Rs Assets IS
Capital Account Capital Account
Amount received 1,50,000 Amountexpended on works 1,55,000
Sundry creditors (Trade) 12,500 Stock-in-Trade 22,000
Net Revenue Account: Balance 10,125 Sundry Debtors (Trade) 20,500
Reserve Fund Account: Balance 25,000 Reserve Fund Investments (M.V. Rs27,500) 25,000
Depreciation Fund Account Cash at bank 7,500
- For Machinery
22,500 Cash in hand 125
- For Building 10,000
2,30,125 2,30,125

lustration 2
The following balances are extracted from the books of M/s. Flashlight Electric Company Lid.:
(i) Fixed assets : Expenditureup to 1.1.2001 (a) Land and Buildings Rs 10,00,000; (b) Machinery Rs 15,00,000
(ii) Additions during the year- Machinery Rs 3,50,000
(ii) Depreciation Fund :(a) Machinery Rs 3,00,000: (b) Buildings Rs 1,00,000.
(iv) Authorised Capital Rs 50,00,000 divided into cquity shures of Rs 100each.
(v) Issued and fully paid-up 20,000 equity shares of Rs 100 each (including 2,500 equity shares issued during
year).
(vi) 7.5 % Debentures Rs 10,00,000 secured by a charge on Fixed Assets.
(vii) Sundry Creditors Rs 2,50,000; Reserve Fund Rs 5.00.000: Reserve Fund Investments at cost Rs 5,.00.000
(Market value Rs 5,25,000).
(vii) Stock Rs 3,02,500; Sundry Debors Rs 4,50.000: Cash at Bank Rs 2,00,000; Cash in hand Rs 50,000.
 Loss Account
P r o f i t and (Cr.) Rs 2,02,500.
(ix) instructed
to prepare:
You are
The Balance Sheet as on December 31, 2001 according to Schedule VI to the
i) Companies Act, 1956 under the
Cinole Account System (previous figures year's not required).
(a) Capital Account
i1)
(b) General Balance
Sheet as on the same date under the Double Account
System.
IC.A. (Inter)- Adapted
Solution (i) Balance Sheet of Flashlight Electric Co. Ltd.. as on 31st December, 2001
an

Liabilities Rs Rs Rs
Assets Rs
Share Capital Fixed Assets
AuthorisedCapital: Land and Buildings (at cost) 10,00,000
Shares of Rs 100 each
50,00 Equity 50.00.000Less:Accumulated Depreciation 1,00,000 9,00,000
Paid-up:
IssUed, Subscribed and Machinery (at cost) 15,00,000
of Rs 100 each fully paid 20,00.000 Addition during the year
20,000 Equity Sh. 3,50,000
Reserve and Surplus 18,50,000
(a) Reserve Fund 5,00,000 Less:Acumulated Depreciation 3,00,000 15,50,000
(b) Profit and Loss Account 2,02,500 7,02,500 Investments
Secured Loans Reserve Fund Investments (at cost) 5,00,000
7.5% Debentures (Market Value: Rs 5,25,000)
(secured by a charge on Fixed Assets) 10,00.000 Current Assets, Loans and Advances
Unsecured Loans Nil Stock 3,02,500
Current Llablities and Provisions Sundry Debtors 4,50,000
Sundry Creditors 2,50,000 Cash at Bank 2,00,000
Cash in Hand 50,000 10,02,500
Miscellaneous Expenditure Nil

39.52.500 39,52,500

(i) (a) Receipts and Expenditure on Capital Account for the year ended 31st December, 2001
Total Receipts Receipts Receipts Total
Expenditure Expendi Expendi during the
ture up to ture during Expend up1to receipts
1.1.2001 the year iture 1.1.2001 year
Rs RS Rs Rs Rs Rs
To Land and Buildings 10,00,000 10,00.000 By Equity Shares 17,50,000 2,50,000 20,00,000
3,50,000 18,50,000 By 7%Debentures 10,00,000 10,00,000
To Machinery 15,00,000
25,00,000 3.50.000 28,50,000 Total 27,50,000 2,50,000 30,00,000
To Balance on Capital A/c 1.50.000
30,00,000
December, 2001
)General Balance Sheet of Flashlight Electric Co. Ltd.as on 31st
Rs Assets
Liabilities Capital Account
Capital Account on works 28,50,000
Amount received 30,00,000 Amountexpended
2,50,000 Stock 3,02,500
Sundry creditors 2,02,500 Sundry Debtors 4,50,000
Net Revenue Account: Balance
Reserve Fund Account: Balance 5,00,000Reserve Fund Investments (M.V. Rs 5,25,000) 5,00,000
Cash at bank 2,00,000
Depreciation Fund Account 50,000
-For Machinery 3,00,000 Cash in hand
-For Building 1,00,000
43,52,500
43,52.500
llustration3
From the following electiricity undertaking, you
are required to draw the Capital Account and General
Balan lowing details relating to an
Double Account System:
2001 under the
Autho as on December 31, 100 each. Issued Capital:
4.000 shares of Rs 100 each fully Daid (out
which Sed Capital : 8,000 shares of Rs Debentures Rs 2.00,000. Trade Creditors Rs 50,000: Reserv
13%
JU shares were issued during the year).
17.8 Accounts of Electric
Supply Companies
Fund Rs 1,00,000: Trade Debtors Rs 90,000 and Cash at Bank Rs 50,000. Reserve Fund Investments (cost) Rs 1,00,000;
(Market value Rs
1,10,000; Stock Rs 60,000).
Fixed Assets: spent upto 1.1.2001:
Machinery Rs 3,00,000; Building Rs 2,00,000;
Additions in the year : Machinery Rs 60.000; Buildings Rs 10,000;
Depreciation Fund : Machinery Rs 70,000: Buildings Rs 10,000. Profit and Loss Account Rs 40,000.

Solution Receipts and Expenditure on Capital Account

For the year ended 31st December, 2001
Expenditure Expendi Expendi Total Receipts Receipts Receipts Total
upto during the receipts
ture up to tureduring Expend
1.1.2001 the year iture 1.1.2001 year
Rs Rs Rs Rs As As
To Buildings 2,00,000 10,000 2,10,000 By Equity Shares 3,50,000 50,000 4,00,000
To Machinery 3,00,000 60,000 3,60,000 By 13% Debentures 2,00,000 2,00,000
Total Expenditure 5,00,000 70,000 5,70,000 Total Receipts 5,50,000 50,000 6,00,000
To Balance on Capital Alc 30,000
6,00,000

General Balance Sheet of ... as on 31st December, 2001

Liabilities Rs Assets Rs
Capital Account: Capital Account:
Amount received 6,00,000 Amount expended on works 5,70,000
Sundry creditors (Trade) 50,000 Stock-in-hand 60,000
Net Revenue Account: Balance 40,000 Sundry Debtors (Trade) 90,000
Reserve Fund Account: Balance 1,00,000 Reserve Fund Investments(M.v. As 1,10,000) 1,00,000
Depreciation Fund Account Cash at bank 50,000
-For Building 10,000
- For Machinery 70,000
8,70,000 8,70,000
Illustration 4
From the following particulars for the year ending December 31, 2001 prepare under the Double Account System,
the (i) Receipts and Expenditure on Capital Account, and (i) General Balance Sheet of an Electric Supply Company:

Particulars Dr. (As) Cr. (Rs) Particulars Dr.(Rs) Cr. (Rs)

Capital Instruments and Appliances 64,000
Authorised 10,000 Equity shares of Stock and General Stores 3,76,000
Rs 1,000 each Rs 1,00,00,000 Office Furniture 30,000
Issued, subscribed and paid-up 6,000 Fuel 45,000
Equity shares of As 1,000 each Sundry Machine Room Materials 10,000
(Rs 800 per share paid up) 48,00,000 (lubricants, jute waste, etc.)
6% Debentures 14,00,000 Sundry Creditors 1,70,000
Depreciation Fund 5,00,000 Sundry Debtors 3,50,000
Buildings 12,00,000 Investments 9,00,000
Freehold Lands 9,00,000 Cash in hand and at bank 7,90,000
Plant and Machinery 23,35,000 Balancetransferred from Net Revenue Alc 6,80,000
Mains 4,60,000 Meters 40,000
Sundry Machine Parts 50,000
75,50,000 75,50,000

IC.U.B.Com. (Hons.)- Aduptedl

 MOdern Accountanc

Receipts and Expenditure on Capital Account

S o l u t i o n

For the year ended 31st

December, 2001
Expenditure
Expendi- Expendi Total Receipts Receipts Receipts Total
ture up to ture during Expend- up to during the receipts
1.1.2001 the year iture 1.1.2001 year
Rs Rs Rs Rs Rs Rs
9,00,000 48,00,000
To Freehold Land 9,00,000 By Equity Shares 48,00,000
14,00,000
To Buildings
12,00,000 12,00,000By6% Debentures 14,00,000
and Machinery
23,35,000 23,35,000
To Plant 4,60,000 4,60,000
To Mains
Machine Parts 50,000 50,000
To Sundry 40,000 40,000
To Meters
and Appliances 64,000 64,000
To InstrumentsGeneral Stores 3.76,000 3.76.000
and
To Stock 30,000 30,000
To Offioe Funiture
62,00,000
Total Expenditure
54,55,000 54.55.000 TotalReceipts 62,00.000
A/c 745.000
To Balance on Capital
62,00.000
General Balance Sheet of...as on 31st December, 2001
Rs
Rs Assets
Liabilities
Capital Account:
Capital Account:
Amount expended on works 54,55,000
62.00.000 55,000
Amount received 1,70,000 Fuel, Lubricants, Jule, etc., in stock
Sundry credilors 3,50,000
Balance 6,80,000 Sundry Debtors 9,00,000
Net Revenue Account : 5.00,000 investments
Depreciation Fund Account Cash in hand and at bank 7,90,000
75,50,000
75,50,000

lustration 5 Co. Ltd.

the books of Dhoopguri Power Supply
The following are the balances on 31.12.2001 in
Particulars Dr. (Rs) Cr.(RS
Particulars Dr.(Rs) Cr.(Rs) 12,000
3,00.000 Cash
Land on 31.12.2000 Cost of generating electricity 70,000
10,000 10,000
Outlay on Land during 2001 Cost of distributing electricity
Machinery on 31.12.2000 12,00,000 10,000
Rent, rates and taxes
Oulay on Machinery during 2001 10,000 24,000
Management expenses
4,00,000 40,000
Mains incl. cost of laying on 31.12.2000 1,00,000
Depreciation 2,60,000
Outlay on Mains during 2001 10,98,000 Sale ofcurrent
Equity share capital
10,000
4,00,000 Rent of meters
Debentures Debentures 20,000
2,000 Interest on 40,000
Sundry Creditors 5,00,000 Interim Dividend 57,000
31.12.2000
Depreciation Reserve Balance of Net Revenue Alc on
80,000 23,27,000 23,27,000
Sundry Deblors for current suplied TOTAL
1,000
Other Debtors General Balance Sheet; (ii) Revenue Account; and,
Account; (ii)
prepare (i) Capital IC.U. B.Com. (Hons.)- Adapted)
rOm the above Trial Balance,
(v) Net Revenue Account. Supply Co. Ltd.
Revenue Account
of Dhoopguri Power
Solution ended 31st December,
2001
For the year As
Particulars
Rs 2,60,000
Particulars 70,000 By Sale of current 10,000
o Cost of Generating Electricity 10,000 By Rent of meter
o Cost of Distributing Electriciy 10,000
o Rent, rates and taxes 24,000
To Management Expenses 40,000
To Depreciation
1o Net
1,16,000 2,70,000
Revenue Alc Transferred 2,70,000
17.10 Accounts of Electric Supply Companies
ended 31st December, 2001
Net Revenue Account For the year
Rs Particulars
Particulars RS
To Interest on Debentures 20,000 By Balance b/d 57 000
To Interim Dividend 40,000 By Revenue Alc
To Balance cd 1,13,000 1,16.00
1,73,000
Dhoopguri Power Supply Co. Ltd.
1,73,000
Account
Receipts and Expenditure on Capital 2001
For the ended 31st December,
year
Receipts
=

Expenditure Expendi Expendi- Total Receipts Receipts Total

ture up to ture during Expend- uptto during the receipts
31.12.2000 the year iture 31.12.2000| year
Rs Rs Rs Rs Rs Rs
To Land 3,10,000 By Equity Shares 10,98,000
To Machinery
3,00,000 10,000
10,000 12,10,000 By Debentures 4,00,000 10,98,000
12,00,000 4,00,000
To Mains 4,00,000 1,00,000 5,00,000 Total Receipts 14,98,000
14,98,00
Total Expenditure 19,00,000 1,20,000 2020,000 By Balance on CapitalA/c 5,2,000
20,20,000
General Balance Sheet of Dhoopguri Power Supply Co. Ltd. as on 31st December, 2001
Liabilities Rs Assets HS
Capital Account Capital Account
Amount received 14,96,000 Expenditure on works
Sundry creditors 2,000 Sundry Debtors for current supplied
20,20,00
80,000
Depreclation Reserve 5,00,000 Other Debtors 1,000
Net Revenue Alc- Balance 1,13,000 Cash 12,000
21,13,000 21,13,00
llustration 6
From the following balances as on 31st December, 2001
appearing in the ledger of Electric Power and Supply Co. Ltd., you are
required to prepare : (a) Revenue Account; (b) Net Revenue Account; (c) Capital Account; and, (d) General Balance Sheet.

Particulars (Rs) ParicularsS (Rs

Equity Shares 54,900 Stores on hand 700
Debentures 20,000 Cash
Lands on 31.12.2000
300
15,000 Cost of generating electricity 3,000
Lands purchased during 2001 500 Cost of distributing electricity 600
Ma ery on 31.12. 60,000 Rent, rates and taxes 400
Machinery purchased during 2001 500 Management expenses
Mains including cost of laying on 31.12.2000 1,200
Spent on mains during 2001
20,000 Depreciation 2,000
5,100 Sale of current 13,200
Sundry Creditors 100 Rent of meters 300
Depreciation Fund
Sundry Debtors for current supplied
25,000 Interest on Debentures 1,00
4,000 Dividends 2,000
Other Debtors 50 Balance on Net
Revenue Account on 2,850
31.12.2000
Solution Revenue Account of Electric Power
and IC.U. B.Com. (Hons.)- Adaped
For the year ended 31st Supply Co. Lid.
Particulars December, 2001
Rs
To Cost of Generating Electricity HS
To Cost of Distributing Electricity 3,000 By Sale of current Particulars 13,200
To Rent, rates and taxes 600 By Rate of meters 300
To Management Expenses 400
To Depreciation 1,200
To Net Revenue Alc- Transferred 2,000
6,300
13,500
 evenue
Particulars
Account For the year ended 31st December, 2001
= = =

To Interest on Debentures Rs Particulars Rs

To Dividends 1,000 By Balance b/d 2,850
To Balance cd 2,000 By Revenue Ac 6,300
,150
9,150 9,150
Electric Power & Supply C. Ltd.
Receipts and Expenditure on Capital Account
For the year ended 31st December, 2001
Expenditure Expendi-
ture up to Expendi Total Receipts Receipts Receipts Total
ture during Expend- to during the receipts
31.12.2000 the year iture 31.12.2000 year
Rs Rs Rs Rs
To Land 15,000 Rs Rs
500 15,500 By Equity Shares
To Machinery 60,000 54,900 54,900
500 60,500 By Debentures 20,000 20,000
To Mains 20,000 5,100 25,100 Total Receipts 74,900 74,900
Total Expenditure 95,000 6,100 1,01,100 By Balance on Capital A/c 26,200
1,01,100
General Balance Sheet of Electric Power &
Supply Co. Ltd. as on 31st December, 2001
Liabilities Rs
Capltal Account: Assets Rs
Amount received
Capital Account
74,900 Expenditure on works 1,01,100
Sundry creditors 100
Depreciation Fund
Sundry Debtors for current supplied 4,000
25,000 Other Debtors 50
Net Revenue Account: Balance 6,150 Stores on hand 700
Cash 300
1,06,150 1,06,150
Ilustration 7
From the following balances as on 31st December, 2001 prepare the Revenue Account, Net Revenue Account, Capital
Account and General Balance Sheet of GIP Power and Light Co. Ltd.

Particulars Rs Particulars Rs
Balance as on 1st January 2001 Expenses of Management 14,400
Land 1,80,000 Cost of Distribution 6,000
Machinery 7,20,000 Depreciation 24,000
Mains 240,000 Sale ofcurrent 1,56,000
Expenditure duning the year Meter rent 6,000
Land 6,000 Interest on Debentures 12,000
Machinery 6,000 Interim Dividend 24,000
Mains 61,200 Net Revenue Account as on 1.1.2001 34,200
Share capital-ordinary shares 6,58,800 Depreciation Fund 3,00,000
Debentures 2,40,000 Sundry Debtors
Sundry Creditors 1,200 for energy supplied 48,000
Cost of generation others 600
42,000
Hent, rates and 6,000 Cash balance 6,000
taxes_
IC.A. (Inter)- Adapted)
Solution Revenue Account of GIP Power and Light Co.
Ltd.
2001
For the year ended 31st December,
Rs
To Cost ParticularsS Rs Particulars
of 1,56,000
To Cost
of Generation 42,000 By Sale of current 6,000
DistandribExpenses
fO Rent, rates
To Management
ution 6,000 By Meterrent
taxes 6,000
14,400
 17.12 Accounts of Electric Supply Companies

To Depreciation 24,000
To Net Revenue Alc- Transferred 69,600
1,62,000 62,000
Net Revenue Account For the year ended 31st December, 2001
Particulars Rs Particulars Rs
To Interest on Debentures 12,000 By Balance b/d 34,200
To Interim Dividend 24,000 By Revenue Ac 69,600
To Balance c/d 67,800
1,03,800 1,03,800
GIP Power and Light Co. Ltd.
Receipts and Expenditure on Capital Account
For the year ended 31st December, 2001
Expenditure Expendi Expendi Total Receipts Receipts Receipts Total
ture up to ture during up to during the receipts
Expend
31.12.2000 the year iture 31.12.2000 year
Rs Rs Rs Rs Rs Rs
To Land 1,80,000 6,000 1,86,000 By Ordinary shares 6,58,800 6,58,800
To Machinery 7,20,000 6,000 7.26.000By Debentures 2,40,000 2,40,000
To Mains 2,40,000 61,200 3,01.200 Total Receipts 8,98,800 8,98,800
By Balance on Capital Ac 3,14,400
Total Expenditure 11,40,000 73,200 12,13.200 12,13,200
General Balance Sheet of GIP Power and Light Co. Ltd. as
on 31st December, 2001
Liabilities Rs Assets Rs
Capital Account Capital Account
Amount received 8,98,800 Expenditure on works 12,13,200
Sundry creditors 1,200 Sundry Debtors
Net Revenue Account : Balance 67.800 For current supplied Rs 48,000
Depreciation Fund Account Others 600 48,600
Opening balance Rs 2,76,000 Cash Balance 6,000
Addition 24,000 3,00,000
12.67,800 12,67,800