Financial Accounting Assignment

Name: AYAAN SHEKDA

Course: TYBAF
Roll Number: 147
Subject: Financial Accounting
Contact Number: 7977856551
Email Id: [email protected]
Academic Year: 2024-2025
 FORMAT (Page 38 – 44)

APPENDIX
PART – I
Form of Balance Sheet
Name of the Company ____
Balance Sheet as at ____
(Rupees in ____)
Particulars Note Figures as at the Figures as at the
No. end of the Current end of the Previous
Reporting Period Reporting Period
1 2 3 4
I. EQUITY AND LIABILITIES
1. Shareholders’ funds
a) Share Capital
b) Reserves and Surplus
c)Money received against share warrants
2. Share application money pending allotment
3. Non-current liabilities
a) Long-Term Borrowings
b) Deferred Tax Liabilities (Net)
c) Other Long-Term Liabilities
d) Long- Term Provisions
4. Current Liabilities
a) Short-Term Borrowings
b) Trade Payables
c) Other Current Liabilities
d) Short-Term Provisions
Total Other non-current assets
II. ASSETS
1. Non-current assets
a) Property, Plant & Equipment’s and Intangiable
Assets
i) Property, Plant & Equipment’s
ii) Intangible assets
iii) Capital work-in-progress
iv) Intangible assets under development
b) Non-current investments
c) Deferred tax assets (Net)
d) Long-term loans and advances
e) Other non-current assets
2. Current Assets
a) Current Investments
b) Inventories
c) Trade receivables
d) Cash and cash equivalents
 e) Short-term loans and advances
f) Other current assets
TOTAL

See accompanying notes to the financial statements

₹
NOTE 1: SHARE CAPITAL
Authorised
....... Shares of ₹ ....... each XX
Issued
....... Shares of ₹ ....... each XX
Subscribed
....... Shares of ₹ ....... each XX
Less Calls in Arrears by
Directors Officers XX
Others XX
Add: Forfeited shares XX XX
XX
NOTE 2: RESERVES AND SURPLUS
Capital Reserves XX
Capital Redemption Reserve XX
Securities premium XX
Debenture Redemption Reserve XX
Revaluation Reserve XX
Share option outstanding XX
Other Reserves XX
Surplus XX
Balance b/d XX
Add: Profit for the year XX
XX
Less: Appropriations XX XX
NOTE 3: LONG TERM BORROWINGS
Bonds/ Debentures XX
Term loans
Banks XX
Others XX XX
Deferred payment liabilities XX
Deposits
Public Deposits XX
Inter Corporate XX
Loans & Advances from related parties XX
Long term maturities of finance lease obligations XX XX
Other loans arid advances XX
XX
NOTE 4: OTHER LONG-TERM LIABILITIES
Trade Payables XX
Other Payables XX
Trade Deposits XX
Security Deposits XX XX
XX
NOTE 5: LONG TERM PROVISIONS
Provision for employee benefits XX
Others: XX
Provisions for warranties XX
XX
NOTE 6: SHORT TERM BORROWINGS
Loans Repayable on Demand:
i) Banks XX
ii) other parties XX XX
Loans and Advances from Related parties XX
Deposits XX
Other loans & advances XX
XX
NOTE 7: TRADE PAYABLES
Sundry Creditors XX
Bills payable XX
XX
NOTE 8: OTHER CURRENT LIABILITIES
Current Maturities of Long-Term Debt XX
Current Maturities of finance lease obligations XX
Interest accrued but not due on borrowings XX
Interest accrued and due on borrowings XX
Income received in advance XX
Unpaid dividend XX
Application money received for allotment of securities and due for refund XX
Interest accrued on the above XX
Unpaid, Matured deposits XX
Interest accrued thereon XX
Calls in Advance XX
Non-Trade Payables XX
Taxes Payables XX
XX
NOTE 9: SHORT TERM PROVISIONS
Provision for employee benefits XX
Provision for Income tax XX
Provision for Equity Dividend XX
Provision for Preference Dividend XX
Provision for Corporate Dividend Tax XX
XX
NOTE 10: PROPERTY, PLANT & EQUIPMENTS
Assets Origin Additions Disposal Origina Total Depreci Depreciati Total Net
al Cost during during l cost at Depreciati ation on on Depreci at
at the the year the year the end on at the for the assets ation at the
beginn beginning year disposed the end end
ing off
1 2 3 4 5 6 7 8 9 10
Land
Building
Plant &
Machinery
Equipment’
s
Vehicles
Assets
under lease

NOTE 11: INTANGIBLE ASSETS

Assets Origin Additions Disposal Origina Total Depreci Depreciati Total Net
al Cost during during l cost at Depreciati ation on on Depreci at
at the the year the year the end on at the for the assets ation at the
beginn beginning year disposed the end end
ing off
1 2 3 4 5 6 7 8 9 10
Goodwill
Brands
Trade
Marks
Computer
Software
Mastheads
&
Publishing
Titles
Mining
Rights
Copyrights
& Patents
Receipts
Formulae
Model
Designs
Prototypes
Licenses &
Franchise

NOTE 12: NON-CURRENT IINVESTMENT

Trade Investment XX
Investment in property XX
Investment in Equity shares XX
Investment in Preference shares XX
Investment in Government securities XX
Investment in Trust securities XX
Investment in Debentures / Bonds XX
Investment in Mutual Fund XX
Investment in Partnership Firms XX
Other Non-Current Investments XX
XX
NOTE 13: LONG-TERM LOANS & ADVANCES
Capital Advances XX
Security Deposits XX
Loans & Advances to Related Parties XX
Advance Tax XX
CENVAT Credit Receivables XX
VAT Credit Receivables XX
Service Tax XX
Credit Receivables XX
XX
NOTE 14: OTHER NON-CURRENT ASSETS
Long Term Trade Receivables XX
Others XX
Discount on issue of Debentures XX
Amalgamation Adjustment Account XX
XX
NOTE 15: CURRENT INVESTMENTS
Investment in : XX
Equity shares XX
Preference shares XX
Government securities XX
Trust securities XX
Debentures XX
Bonds XX
Mutual funds XX
Partnership firms XX
Other Investments XX
XX
NOTE 16: INVENTORIES
Raw Materials XX
W.I. P XX
Finished Goods XX
Stores & spares XX
Loose Tools Others XX
XX
NOTE 17: TRADE RECEIVABLES
Sundry Debtors XX
Less: Provision for Doubtful Debts XX
Bills Receivables XX
XX
NOTE 18: CAAH & CASH EQUIVALENT
Cash & Cash Equivalent XX
Bank balance XX
Cheques / Drafts on hand XX
Cash Balance XX
Other bank balances XX
Margin money deposits XX
Security against borrowings XX
Guarantees & other commitments XX
XX
NOTE 19: SHO'RT TERM LOANS & ADVANCES
Loans & Advances to Related parties XX
Prepaid. expenses XX
Tax Refund Receivable XX
XX
NOTE 20: OTHER CURRENT ASSETS
Non-Trade Receivables XX
Unamortised Expenditure XX
Unbilled Revenue XX
XX

Part II ·Form of Statement of Profit and Loss

Name of the Company___
Profit and loss statement for the year ended ___
(Rupees in ____)
Particulars Note Figures Figures for
No. for the the
current previous
reporting reporting
period period
I. Revenue from operations XXX XXX
II. Other Income XXX XXX
III. Total Income (I + II} XXX XXX
IV. Expenses: Cost of materials consumed XXX XXX
Purchases of Stock-in-Trade Changes in inventories of finished
goods work-in-progress and Stock-in-Trade
Employee benefits expense XXX XXX
Finance costs
 Depreciation and amortization expense
Other expenses
Total Expenses XXX XXX
V. Profit before exceptional and extraordinary items and tax (lll - IV) XXX XXX
VI. Exceptional items XXX XXX
VII. Profit before extraordinary items and tax (V - Vl) XXX XXX
VIII. Extraordinary items XXX XXX
IX. Profit before tax (Vll VIII) XXX XXX
X. Tax expense:
1. Current tax XXX XXX
2. Deferred tax XXX XXX
XI. Profit (Loss) for the period from continuing operations (VII-VIII) XXX XXX
XII. Profit/ (loss) from discontinuing operations XXX XXX
XIII. Tax expenses of discontinuing operations XXX XXX
XIV. Profit/(loss) from Discontinuing operations (after tax) (XII-XIII) XXX XXX
XV. Profit (Loss) fo1: the period (XI + XIV) XXX XXX
XVI. Earnings per equity share:
1. Basic XXX XXX
2. Diluted XXX XXX
Notes to Accounts
₹
NOTE 1: REVENUE FROM OPERATION
i) Sale of goods XX
ii) Sale of services XX
iii) Trading commission XX
iv) Less Excise duty XX
NOTE 2: OTHER INCOME
i) Interest income (in case of a company other than a finance company) XX
ii) Dividend from subsidiary Company XX
iii) Dividend from companies other than subsidiary company XX
iv) Net Garn on sale of Investment XX
v) Net Gain on sale of fixed assets XX
vi) Other non-operating income XX
XX
NOTE 3: COST OF MATERIAL CONSUMED
Opening stock of materials XX
Add: Purchase of Materials XX
Add: Carriage XX
XX
Less: Closing Stock of Materials XX
XX
NOTE 4 : CHANGES IN INVENTORIES
Inventory at the end of the year XX
Inventory at the beginning of the year XX
XX
NOTE 5: EMPLOYEE BENEFIT EXPENSES
Salaries & wages XX
Contribution to P.F. XX
Contribution to other funds XX
Expenses on ESOP XX
Expenses on ESPP XX
Employee welfare expenses XX
XX
NOTE 6: FINANCE COST
Interest on Borrowings from Banks XX
Interest on Borrowings from others XX
Interest on Debentures XX
Finance charge on lease financing XX
Interest levied by Tax department XX
Commitment charges XX
Discount/ issue expenses on Debentures written off XX
Processing charges XX
Net Gain/ Loss on foreign currency transactions XX
XX
NOTE 7: DEPRECIATION AND AMORTIZATION EXPENSES
Buildings XX
Plant & Machinery XX
Vehicles XX
Equipment’s XX
Furniture’s XX
Brands XX
Computer software XX
XX
NOTE 8: OTHER EXPENSES
Stores & spares XX
Power XX
Fuel and oil XX
Rent XX
Insurance XX
Repairs & maintenance
Building XX
Machinery XX
Furniture XX
Vehicles XX
Equipment’s XX XX
Rates & Taxes XX
Miscellaneous Expenses XX
Provision for Doubtful Debts XX
Payment to Auditors for:
Audit work XX
Taxation work XX
Company law matter XX
Management Services XX
Other services XX XX
Distribution expenses. XX
Sales commission XX
Advertising XX
Show room expenses XX
Discount allowed XX
Loss on foreign currency transactions XX
Exceptional items:
Restructuring cost XX
Disposal of Investment XX
Disposal of fixed assets XX
Litigation settlement XX
Reversal of provision XX
Write down of stock XX XX
Extra Ordinary Items
Loss from attachment of property XX
Loss from earthquake XX
Profit from Insurance claim XX XX
XX
NOTE 9: SURPLUS XX
Balance at the beginning XX
Add: Net profit for the year XX
Less: Transfer to Reserves XX
Interim dividend XX
Provision for dividend:
Equity XX
Preference XX XX
Dividend Distribution Tax XX
Balance at the end transferred to Balance sheet XX
XX
 FORMAT (49 - 52)
Form N
[See Rule 62(1)]
Balance Sheet
Liabilities Assets
Instructions in Figures Figures Figures Figures Instructions in
accordance for the for the for the for the accordance
with which Previous Current Previous Current with which
liabilities Year year year year assets should
should be be made out
made out
(1) (2) (3) (4) (5) (6) (7) (8)
₹ ₹ ₹ ₹
I. Contributed I. Share I. Cash and I. Fixed deposit
by Government Capital Bank Balance and call
and by co- Authorized: A) Cash in deposits with
operative share of ₹… hand Central Banks
societies, each B) Cash at and other
and different Subscribed: Bank: approved
classes o f (distinguishing i) Current bankers should
individual between the Accounts be shown
members shall various classes ii) Saving Bank under the
be of capital and Account heading
shown stating the iii) Call “Investments”
separately. particulars Deposits on and not under
Terms of specified Banks the heading
redemption or below, in “Cash and
conversion of respect of Bank Balance”
any each class).
redeemable Shares of each
preference Less: calls in
shares s h o u l arrears
d be Add: calls in
mentioned. advance
I.A.
Subscriptions
towards
shares
II. a) Statutory II. Reserves II. II. The Nature
Reserve Funds Funds and Investments: of each
and other Other funds: a) investment
reserve funds a) Statutory Government and the mode
shall be shown Reserve Funds Securities of valuation
separately. b) Building b) Other (cost or market
b) Additions Funds Trustee value) should
and deductions Securities be mentioned.
since last If the value of
balance sheet c) Special c) Non- any security is
to be shown Development Trustee less than the
under each of Fund Securities market value, a
specified head. d) Bad and d) Shares of remark to that
c) Funds in the Doubtful other Co- effect should
nature of Debts Reserve operative be made
reserves and e) Investment Societies against each
funds created Depreciation e) Shares, item.
out of any Fund Debentures or
profits for f) Dividend Bonds of
specific Equalization companies
purposes Fund registered
should be g) Bonus under the
shown Equalization Companies
separately. Fund Act
h) Reserve for f) Fixed
overdue Deposits
interest
i) Other Funds
III. Staff III. Staff III. 1. III. Quated and
Provided Fund Provident Investment of unquoted
any other Fund staff Provident securities
insurance or fund should be
Bonus Funds 2. Advances shown
maintained for against Staff separately,
the benefit of Provident loans due by
the employees Fund. societies and
should be individual
shown members
separately. should be
shown
separately.
IV. The name IV. Secured IV. Loans & IV. In case of
of the security Loans: Advances: Central Banks
should be a) Debentures 1. a) Loans and other
specified in b) Loans, b) Overdrafts federal
each overdrafts and c) Cash societies, loans
case. Where cash credits Credits: due by
loans have from banks i) against societies and
been c) loans from pledge of individual
guaranteed by government goods members
Government or d) other ii) against should be
State Co- secured loans hypothecation shown
operative or of goods separately.
Central iii) clean
(of which
overdue₹…)
Banks, a 2. Loans due
mention by Managing
thereof Committee
should also be Members ₹
made together Loans due by
with the Secretary and
maximum other
amount of employees ₹…
such
guarantee.
Loans from (a)
Government,
(b) State Co-
operative Bank
or Central
bank. State
Bank of India
and
other Banks
should be
shown
separately.
V. Unsecured V. Sundry
Loans: Debtors
a) Loans, cash a) Credit Sales
credits and b) Advances
overdraft from c) Others
Central Banks
b) From
Government
c) From others
d) Bills Payable
VI. Deposits VI. Deposits: VI. Current VI. Mode of
from societies a) Fixed Assets: Valuation and
and individuals Deposits a) Stores and stock shall be
should be b) Recurring spare parts stated and the
shown deposits b) Loose tools amount in
separately. c) Thrift or c) Stock-in- respect of raw
Saving trade materials
deposits d) Works in partly finished
d) Current Progress goods and
deposits stores required
e) Deposits at or
Call consumption
f) other should be
deposits stated
separately.
g) Credit Mode of
balance in valuation of
cash credit works in
and overdrafts progress shall
accounts be stated.
VII. Current VII. Fixed VII. Under
Liabilities and Assets: each head the
Provisions: a) Land and original cost
a) Sundry Building and additions
creditors b) Leaseholds there to and
b) Outstanding c) Railways deductions
Creditors: siding there from
i) for d) Plants and made during
purchases Machinery the year and
ii) for e) Loose tools, the total
expenses tackiest and depreciation
including other written of or
salaries of equipment provided upto
staff, rent, etc. f) Deadstock the end of the
c) Advance, g) Furniture year should be
recoveries for and fittings stated.
the portion for h) Live-stock
which value i) Vehicles etc.
has still to be
given viz.
unexpired
subscriptions,
premiums,
commission
etc.
VIII. Unpaid VIII.
Dividends Miscellaneous
Expenses and
Losses:
a) Goodwill
b) Preliminary
expenses
c) Expenses
concerned
with the issue
of shares and
dentures
including
underwriting
charges,
brokerage,
etc.
 d) Deferred
revenue
expenditure
IX. Interest IX. Other
accrued due Items:
but … not paid a) Prepaid
expenses
b) Interest
accrued but
not due
c) other items
(to be
specified)
X. Other X. Profit &
liabilities (to Loss A/c:
be specified) Accumulated
losses not
written off
from the
reserve or any
other funds
XI. Contingent XI. Profit & XI. Current
liabilities which Loss A/c Losses
have not been Profits for last
provided for year
should also be Less:
mentioned in appropriations
the balance Add: Current
sheet by way profits
of a foot-note.

Form N
Profit & Loss Account
Last Expenditure This Last Income This
year’s year’s year’s year’s
figures figures ₹ figures figures
Rs, np np ₹ np ₹ np
1. Interest: 1. Interest Received:
a) Paid ₹ a) On loans & advances
b) Payable ₹ b) On Investment
2. Bank Charges 2. Dividend received on
shares
3. Salaries and Allowances of 3. Commission
staff
4. Contribution to staff 4. Miscellaneous Income
provided fund
 5. Salary and Allowance of a) Share transfer fees
Managing Directors b) Rent
6. Attendance fees and c) Rebate in Income
Travelling expenses of d) Sales of forms
Directors and Committee e) Other Income
Members
7. Travelling expenses of staff 5. Land, Income and
8. Rent, Rates and taxes Expenditure accounts
9. Postage, telegram and
telephone Charges
10. Printing & Stationery
11. (Contingencies) General
expenses
12. Audit fees
13. Bad debts written off or
provision made for bad
debts
14. Depreciation on fixed
assets
15. Land, Income and
Expenditure Account
16. Other Items
17. Net profit carried to
Balance Sheet

Note: (1) In the case of marketing societies, consumer societies and similar other societies
which have undertaken trading activities, the Profit and Loss Account shall be divided into
two parts showing separately the Trading Account and the Profit and Loss Account. (2) In
case of producers' societies, processing societies, forest laborers’ societies and other
societies which have undertaken production activities, the manufacturing account shall also
be prepared in addition.
FORMAT (96 -99)

Format: The prescribed form of Profit & Loss Account and Balance sheet as given in form N
are as follow:
Form N
[See Rule 62(1)]
Balance Sheet
Liabilities Assets
Instructions Fig. Fig. Fig. Fig. Instructions
in for For for For in
accordance the the the the accordance
with which prev cur- prev cur- with which
liabilities - ren - ren Asset
should be ious t ious t should be
made out Year Yea Year Yea made out
(₹) r (₹) r
(₹) (₹)
(1) (2) (3) (4) (5) (6) (7) (8)
Contributio I. Fixed
n by I Share capital Cash and deposits
governmen Authorised shares Bank and call
t and co- of Balances deposits
Operative ₹... each a) Cash on with central
societies Subscribed : hand banks and
and (distinguishing b) Cash in other
different between the Banks: approved
classes of various classes of i) Current bank should
individuals capital and Account be shown
members stating ii) Savings under the
shall be particulars Banks heading
shown specified below, in Accounts Investment
separately. respect of each iii) Call and not
Terms of class). Shares of Deposits under the
redemption each on Banks heading
or Less: Calls in Cash and
conversion arrears bank
of any Add : Calls in balances
redeemabl advance
e I-A Subscriptions
preference towards shares
shares
should be
mentioned
II. a) II. Reserve Funds II. II. The
Statutory and Investments nature of
reserve Other Funds each
funds and a) Statutory a) investment
other Reserve Government and the
reserve and Funds Securities mode of
funds shall b) Building Funds b) Other valuation
be shown c) Special be Trustee (cost or
separately. Development Securities market
b) Fund c) Non- value)
Additions d) Bad and Trustee should be
and Doubtful Securities mentioned.
deductions Debts Reserve d) Shares of If the value
since last e) Investment other Co- of any
balance Depreciation Fund operative security is
sheet to be f) Dividend Societies less than
shown Equalisation Fund e) Shares, the market
under each g) Bonus Debentures value, a
specified Equalisation or remark to
head. Fund Bonds of that effect
c) Funds in h) Reserve for companies should be
nature of over due interest registered made
reserves i) Other Funds under the against each
and fund Companies item.
created out Act
of any f) Fixed
profits for Deposits
specific
purposes
should be
shown
separately.
III. Staff III. Staff Provident III. 1. III. Quoted
provident fund Investment and
fund and of unquoted
any other Staff securities
insurance Provident should
or bonus Fund. be
funds 2. Advances shown
maintained against separately,
for the Provident loans due
benefit of Staff by
the societies
employees and
should be Individual
shown members
separately. should be
shown
separately
IV. The IV. Secured Loans IV. Loans TV. In case
name of 1. Debenture and of
the security s Advanced Central
should be 2. Loans, 1.a) Loans Banks
specified in overdrafts b)over- and
each case and cash draft other
Where credits c) Cash federal
loan have from Banks Credit: societies,
been 3. Loans from i)against loans due
guaranteed Governme pledge of by societies
by the nt goods and
governmen 4. Other ii) against Individual
t or state secured hypotheca- members
co- loans tion of goods should
operative iii) clean (of be
or Central which over shown
Bank, a due ₹) separately.
mention 2. Loans due
thereof by managing
should also committee
be made members ₹
together loans due by
with the Secretary
maximum and other
amount of employees
such
guarantee
(1)Loans
from
Governmen
t
(2) State
Co-
operative
bank or
Central
bank. State
bank of
india and
other bank
should be
shown
separately
V. Unsecured Loans V. Sundry V.
a) Loans, Debtors
cash credits 1.Credit
overdrafts Sales
 Central Banks 2.Advances
b)From Govt. 3.Others
c)From others
d)Bills Payable
VI. Deposits VI. Deposits VI. Current VI. Mode of
societies a)Fixed Deposits Assets valuation
from and b)Recurring 1.Stores and stock
individuals Deposits and shall be
should be c)Thrift or Saving Spare Parts stated and
shown Deposits 2.Loose the amount
separately. d)Current Deposits Tools in respect
e)Deposits at 3.Stock-in- of raw
f)Other Deposits Trade materials
g)Credit Balance in 4.Works-in- partly
cash credit & Progress finished
overdrafts goods and
accounts. store or
required
consumptio
n should be
stated
separately.
Mode of
valuation of
work in
progress
shall be
stated.
VII. VII. VII. Current VIL. VII. Under
Liabilities Fixed Assets each head
and Provisions a)Land & the original
a)Sundry creditors b)Buildings cost and the
b)Outstanding c)Leaseholds additions
creditors Railways there to and
i)for purchases Siding deduction
ii) for expenses d) Plants & there from
including salaries Machinery made
of staff, rent, e) Loose during the
taxes, etc. tools, Tackies year and
recoveries and Other the total
c)Advance, Equipment depreciatio
for the portion for f) Dead stock n written off
which value has g)Furniture & or provided
still to be given Fittings upto the
viz. unexpired h)Live-Stock end of the
subscription, i)Vehicles year should
etc. be stated.
 premiums,
commission etc.
VIII. VIII. Unpaid VIII.
Dividends Miscellaneou
s Expense &
Losses
1.Goodwill
2.Preliminary
Expense
3.Expenses
concerned
with the
issue of
shares %
debentures
including
underwriting
charges,
brokerage,
etc.
4. Deferred
revenue
expenditure

IX. IX. Interest IX. Other

accrued due but Items
not paid a) Prepaid
Expenses
b) Interest
accrued
but not due
c) Other
items (to be
specified)

X. X. Other Liabilities X. Profit &

(to be specified) Loss
Account
Accumulated
losses not
written off
from reserve
or any other
funds.

XI. XI. Profit & Loss XI. Current

Contingent Account losses
Liabilities Profits for last
which year.
have Less:
not been Appropriations
provided Add: Current
for should profits
be
mentioned
in the
Balance
sheet by
way of
footnote

Income and Expenditure A/c

For the year ended

Expenditure Rs. Income Rs.

To Members Contribution By Member's Contribution

towards: towards:
Municipal property tax XX Property Tax XX
Water Charges XX Water Charges XX
Electricity Charges XX Repairs and Maint XX
Lease Rent XX Electricity Charges XX
Insurance XX Administration Cost XX
Common Expenses XX Employee Costs XX
Salary and Bonus XX Common Expenses XX
Security Charges XX Insurance XX
Repairs (Building) XX Parking Charges XX
Repairs (Lift) XX Non-occupancy Charges XX
Repairs (Plumbing) XX Interest from Members XX XX
Repairs (General) XX By Sale of Scrap XX
Repairs (Inter com) XX By Interest from Bank XX
Non-Agreement Tax XX By Donations Received XX
To Pest Control Expenses XX By Penal Interest XX
To Printing & Stationary XX By Non-Occupancy Charges XX
To Conveyance XX By Interest on the defaulted
To Postage & Telephone XX Charges XX
To Accounting and Professional XX
Fees XX
To Government Audit Fees
To Contribution to Education XX
Fund
To Meeting Expenses XX
To Misc. Expenses XX
To Bank Charges XX
To Membership / Subscription XX
fees
To Depreciation: XX
Building XX
Furniture XX
Water Pump XX
Fire Extinguishers XX
Garbage Trolleys XX
Water Tank XX
XX
Surplus : XX
Reserve Fund 25% XX
Transfer to B/s 75% XX -
XX XX
XX

Memorandum Appropriation A/c

Plan for Disposal of surplus funds(vide sec. 79(1A) (C) /Byelaw No. 147.

Rs. Rs.

To Statutory Reserve 25% XX By Balance b/d XX

To Reserve Fund XX (Last year’s balance)
To Proposed Dividend XX By Surplus for the year XX
To Balance c/d XX -
XX XX
 FORMAT (149 – 151)

PURPOSE OF INVESTMENT LEDGER

The main objectives of maintaining investment ledger are as follows:
1.To record each security properly.
2.To collect interest and dividend when it becomes due.
3.To ascertain value of securities at the end of the year.
4. To ascertain profit or loss on sale of any security.
Investment Account
(Fixed Interest bearing Securities)
for the year ending. (Due Date for Interest………)
Date Particular Nominal Income Capital Date Particular Nominal Income Capital
Value or Cost Value or Cost
1. To Balance b/d xx xx xx 3. By Bank xx xx xx
(Opening (Sale Ex-
Balance) Interest)
1. To Bank xx xx xx 4. By Bank xx xx xx
(Purchase Ex- (Sale Cum
interest) Interest)
2. To Bank xx xx xx 5. By Profit & xx
(Purchase Cum Loss A/c
Interest (Loss on Sale)
5. To P&L A/c xx 6. By Bank xx
(Profit on (Interest
Sale) received)
8. To P&L A/c xx 7. By Balance xx
(Transfer of c/d
Interest) (Accrued
Interest)
9. By Balance xx
c/d
(Value at the
end)
10. By P&L A/c xx
(Loss on
Valuation)

xx xx xx xx xx xx

14. RECORDING OF TRANSACTIONS OF FIXED INCOME EARNING SECURITIES

1. Purchase (ex-interest)
Enter N.V. in NV column on Debit side
 Enter cost of purchase in Capital column
Enter accrued interest in income column.
2. Purchases (cum interest)
Enter NV in NV column
Enter accrued interest in income column
Enter price less accrued interest in capital column.
3. Sale (ex-Interest)
Enter N.V. in NV column Enter Accrued interest in Income column
Enter price received in capital column
4.Sale (cum interest)
Enter NV in NV. column
Enter Accrued Interest in Income column
Enter price less accrued interest in capital column.
5. Profit
Enter profit on sale of security in capital column.
Profit Sale Price-Weighted Average Cost
Loss
Enter loss on sale in capital column
Loss= Weighted Average Cost - Sale Price.
6.Interest received
Calculate interest received on due date and enter it in income column.
7. Interest accrued
Calculate accrued interest and enter it in income column
8. Transfer of Interest
Balance interest column and transfer the balance to P&L A/c
9. Value at the end
Value the securities at cost or M.V. whichever is lower and enter it in capital column.
10.Loss on Valuation
Any loss on valuation i.e. cost less M.V. at the year end and enter in in capital column.
Loss= Cost-M.V. of investments at the year end.
Date Particular Nominal Dividend Capital Date Particular Nominal Dividend Capital
Value or Value or
Cost Cost
1 To Balance b/d xx xx 5 By Bank A/c xx xx
(Opening (Dividend
Balance) received)
2 To Bank A/c xx xx 6 By Bank A/c xx xx
(Purchase of (Sale of
Shares) Shares)
3 To Bonus xx 7 By Profit & xx
Shares (Bonus Loss A/c (Loss
Shares allotted) on Sale)
4 To Bank A/c xx xx 8 By Balance c/d xx xx
(Rights Shares
Subscribed) 9 By P & L A/c xx
7 To P & L A/c xx (Loss on
(Profit on Sale) Valuation)
10 To P & L A/c xx
(Transfer of
Dividend)
xx xx xx xx xx xx
15. PROCEDURE OF RECORDING SHARES
1. Record opening balance:
i) Face value in N.V. column
ii) Cost in Capital column
2. Purchase of shares:
i) Record N.V. in NV column
ii) Record cost in Capital column
3. Bonus shares:
i) Record N.V. in N.V column
ii) Do not enter any thing in cost column
4.Right Shares:
i) Record NV in NV column
ii)Record cost in capital column
5. Dividend received:
i) Record pre-acquisition dividend in Capital column
ii)Record post acquisition dividend in dividend column
6. Sale of shares:
i) Record NV in NV. Column.
ii) Record amount received in Capital column.
7 . a) Loss on sale:
Record loss on sale in Capital column on Credit side
b) Profit on sale:
Record profit on sale in capital column on Debit side
8. Balance:
Record closing balance, NV in NV column and cost in Capital columns.
9. Loss on valuation:
Record loss on valuation of shares in hand in capital column on Credit side.
10. Balance on Dividend Account:
Transfer balance on Dividend Account to Profit & Loss Account on debit side of Investment
Account.
Chapter 1: Final Account for Electricity Company
Illustration 19
From the following balances as at 31st December, 2022, prepare the Revenue Account, Net
Revenue Account, Capital Account, and General Balance Sheet of GIP Power and Light Co.
Ltd.

Particulars ₹ Particulars ₹
Balance as on 1st January,
Expenses of Management 14,400
2017
Land 1,80,000 Cost of Distribution 6,000
Machinery 7,20,000 Depreciation 24,000
Mains 2,40,000 Sales of Current 1,56,000
Expenditure During the Year Meter Rent 6,000
Land 6,000 Interest on Debentures 12,000
Machinery 6,000 Interim Dividend 24,000
Net Revenue A/c as on 01-01-
Mains 61,200 34,200
2017
Share Capital - Ordinary Shares 6,58,000 Sundry Debtors
Debentures 2,40,000 For Energy Supplied 48,000
Sundry Creditors 1,200 Other 600
Cost of Generation 42,000 Cash Balance 6,000
Rent, Rates, and Taxes 6,000 Depreciation Fund 3,00,000

Solution:

Balance Sheet (As per Schedule - III)

Balance Sheet of GIP Power and Light Co. Ltd.

As at 31st Dec., 2022

Particulars Notes ₹ ₹
I. Equity and Liabilities
1. Shareholder’s Funds
Share Capital 6,58,800
Reserves and Surplus 1 67,800 7,26,000
2. Share Application Money Pending Allotment
3. Non-Current Liabilities 2,40,000
Long-Term Borrowings Debentures
4. Current Liabilities
Trade Payables 1,200
Total 9,67,800
II. Assets
 1. Non-Current Assets 2
Property, Plant & Equipment 9,13,200
2. Current Assets
Trade Receivables 48,000
Cash and Cash Equivalents 6,000
Other Current Assets 600 54,600
Total 9,67,800

Profit and Loss Account (as per schedule – III)

GIP Power and Light Co. Ltd

Profit and Loss Statement for the year ended 31-12-2022

Particulars ₹
Revenue
I. Revenue from Operations: Sakes of Current 1,56,000
II.Other Income: Meter Rent 6,000
Total Income (I + II) 1,62,000
IV. Expenses
Cost of Generation 42,000
Finance Costs: Interest on Debentures 12,000
Depreciation and Amortisation Expenses 24,000
Other Expenses
Rent, Rates, and Taxes 6,000
Expenses of Management 14,400
Cost of Distribution 6,000
Total Expenses 1,04,400
V. Profit Before Exceptional, Extraordinary Items & Tax 57,600
VI. Exceptional Items
VII. Profit Before Extraordinary Items and Tax 57,000
VIII. Extra Ordinary Items
IX. Profit Before Tax 57000
X. Tax Expense
XI. Profit (Loss) for the Period 57,600

Notes to Accounts

1. Reserve and Surplus

Profit and Loss Account (Net Revenue A/c) ₹

Balance Brought Forward 34,200
Add: Profit for the Year 57,600
Less: Interim Dividend -24,000 67,800
2.Fixed Assets

Fixed Assets Opening Additions Closing

Land 1,80,000 6,000 1,86,000
Machinery 7,20,000 6,000 7,26,000
Mains 2,40,000 61,200 3,01,200
Total 12,13,200
Less: Depreciation Fund 3,00,000
Closing WDV 9,13,200

Illustration 20
The trial balance of Aarati Electric Supply Ltd. for the year ended 31st March, 2022 as below:
Particulars Dr (₹ '000) Cr (₹ '000)
Share Capital:
Equity shares of ₹ 10 each 4,688
7% Preference shares of ₹ 1,406
100 each
Goodwill 234.75
16% Debentures 2,315.63
12% Term Loan 1,434.38
Land 1,167.19
Building 3,293.81
Plant & Machinery 5,349.19
Meters 295.31
Electrical Instrument 143.44
Office Furniture 229.69
Capital Reserve 470.63
Contingency Reserve 1,127.81
Net Revenue Account 501.56
Stock in Trade 1,129.69
Sundry Debtors 585.80
Cash and Bank 1,125.94
Contingency Reserve 1,125.94
Investment
Public Lamps 285.00
Depreciation Fund 2,420.25
Sundry Creditors 611.36
Proposed Dividend 1,134.38
During 2021 – 22, (₹ '000) 937.5 of 7% Preference Shares were redeemed at a premium of
10% out of proceeds of fresh issue of Equity Shares od necessary amounts at a premium of
10%.

Prepare balance sheet as on 31st March 2022 as per Schedule III of the Companies Act. 2013.
Solution:

In the books od Arati Ltd.

Balance sheet as on 31st March, 2022.

Particulars Notes to A/c Amount (₹ '000)

I. Equity & Liabilities
A. Shareholders Funds
a) Share Capital 1 6,094
b) Reserve & Surplus 2 2,100
B. Non-Current Liabilities
a) Long Term Borrowings 3 3,750.01
C. Current Liabilities
a) Trade Payables 611.36
b) Proposed Dividend 1,134.38
Total (A) 13,689.75
II. Assets
A. Non-Current Assets
i) Property, Plant & 4 10,308.51
Equipment
ii) Goodwill 234.75
iii) Non-Current 1,125.94
Investment
B. Current Assets
i) Inventory 1,129.69
ii) Trade Receivables 585.80
iii) Cash & Cash Equivalent 305.06
Total (B) 13,689.75

1. Share Capital
Equity Share Capital 4,688
Preference Share Capital 1,406
Total Share Capital 6,094

2. Reserves & Surplus

Capital Reserve 470.63
Contingency Reserve 1,127.81
Net Revenue 501.56
Total Reserves & Surplus 2,100

3. Long Term Borrowings

16% Debentures 2,315.63
12% Term Loan 1,434.38
Total Long Term 3,750.01
Borrowings

4. Property, Plant &

Equipment
Land 1,167.19
Building 3,293.81
Plant & Machinery 5,349.19
Meters 295.31
Electrical Instruments 143.44
Office Furniture 229.69
Mains 424.13
Transformers 1,541.01
Public Lamps 285.00
Less: Depreciation Fund (2,420.25)
Total Property, Plant & 10,308.51
Equipment
 Chapter 2: Final Accounts for Co-operative Society (Consumer Co-operative Society)

Illustration 3
From the following Trial Balance for the year ended 31.01,2022 and the adjustment in
respect of Tejas Consumers’ Co-operative Society, Vasai, prepare the Final Accounts for three
year ended 31.3.2022.
Trial Balance
Particulars Dr. (₹) Cr. (₹)
Share Capital 8,00,000
Reserve Fund 2,00,000
Purchases 12,00,000
Stock on 1st April, 2021 2,00,000
Carriage Inward 10,000
Salaries and Allowances to Staff 1,40,000
Building Fund 1,40,000
Share Capital Redemption Fund 25,000
Contribution to Staff Provident Fund 10,000
Staff Provident Fund 34,000
Sales 16,00,000
Bad Debts 8,000
Reserve for Bad and Doubtful Debts 20,000
Postage 6,000
Machinery (at Cost) 28,000
Travelling Expenses 10,000
Bonus to Employees 10,000
Printing and Stationery 3,500
Insurance 11,000
Building (at Cost) 6,00,000
Furniture (at Cost) 1,00,000
Depreciation Fund 90,000
Sundry Debtors 2,00,000
Sundry Creditors 1,20,000
Investment in Shares of Co-op. Societies 34,000
Fixed Deposit with District central Co-op. Bank 1,60,000
Sundry Expenses 10,000
Repairs to Building 5,000
Interest on Fixed Deposit 16,000
Dividend received on shares 12,000
Transfer Fees 5,000
Profit and Loss Appropriation A/c balance of last year 1,00,000
Cash in Hand 6,500
Cash at Bank 1,00,000

Adjustments:
1. Closing Stock on 31.3.2022 was ₹3,20,000.
2. Salaries unpaid on 31.3.2022 was ₹8,000.
3. Prepaid Insurance is ₹1,500.
4. Provide Reserve for Bad and Doubtful Debts @ 5%.
5. Provide Depreciation for the year as shown below:
- On Building: ₹30,000
- On Furniture: ₹10,000
- On Machinery: ₹2,800
6. Transfer to Education Fund ₹100.
7. Audit Fees are outstanding for the year ₹5,000.
8. Provide for Share Capital Redemption Fund ₹3,000.
9. Directors recommend dividend to Members @ 10%.

Solution:
Tejas Consumers’ Co-operative Society
Trading A/c for the year ended 31.3.2022
Particulars ₹ Particulars ₹
To Opening Stock 2,00,000 By Sales 16,00,000
To Purchases 12,00,000 By Closing Stock 3,20,000
To Carriage Inward 10,000
To Gross Profit transferred to 5,10,000
Profit & Loss A/c

Total 19,20,000 19,20,000

Profit and Loss A/c

For the year ended 31.3.2022
Particulars ₹ Particulars ₹
To Salaries & Allowances to 1,48,000 By Gross Profit transferred 5,10,000
Staff from Trading A/c
To Contribution to Staff P.F. 10,000 By Excess of old R.D.D. 2,000
over Bad Debts and New
R.D.D.
To Bad Debts 18,000 By Interest 16,000
To Postage 6,000 By Dividend 12,000
To Travelling Expenses 10,000 By Transfer Fees 5,000
 To Bonus to Employees 10,000
To Printing & Stationery 3,500
To Insurance 9,500
To Sundry Expenses 10,000
To Repairs to Building 5,000
To Depreciation:
- On Building 30,000
- On Furniture 10,000
- On Machinery 2,800
To Education Fund 100
To Outstanding Audit Fees 5,000
To Share Capital 3,000
Redemption Fund
To Balance transferred to 2,67,100
Balance Sheet

Total 5,45,000 5,45,000

Plan for Disposal of Surplus Fund

(Memorandum) Profit and Loss Appropriation A/c
Particulars ₹ Particulars ₹
To Reserve Fund 66,775 By Last Year Balance 20,000
(25% of 2,67,100) By Current Year Net Profit 2,67,100
To Proposed Dividend 80,000
To Balance Sheet
Transferred
To Balance Sheet 1,40,325
2,87,100 2,87,100

Tejas Consumer Co-operative Society

Balance Sheet
As on 31.3.2022

Liabilities ₹ Assets ₹
Share Capital ? Cash & Bank Balances:
Reserve Fund 8,00,000 - Cash in Hand 6,500
Building Fund 1,40,000 - Bank Balance 1,00,000
Capital Redemption Fund 28,000 Investments:
 Reserve for Bad & Doubtful 28,000 - Shares of Co-op. 34,000
Debts Societies
Staff Provident Fund 34,000 - Fixed Deposits with 1,60,000
Central Co-op. Bank
Sundry Creditors 1,20,000 Sundry Debtors 2,00,000
Outstanding Expenses: Current Assets:
- Salaries 8,000 - Closing Stock 3,20,000
- Audit Fees 5,000 Fixed Assets:
- Education Fund 100 - Building (at Cost) 6,00,000
Profit & Loss A/c 2,87,100 - Furniture (at Cost) 1,00,000
- Machinery 28,000
Less: Depreciation 7,28,000
Provision
Total 15,37,200 Total 15,37,200
Note: Current Year’s appropriation will be implemented next year

Illustration 4: (Government Loan given Dividend recommended)

Following is the Trial Balance of Suchita Consumers’ Co-operative Society Ltd. for the year
ended 31.3.2022. You are required to prepare Trading and Profit and Loss Account for the
year ended 31.3.2022 and a Balance Sheet as on that date.
Debit Balances ₹ Credit Balances ₹
Interest Paid 2,800 Sales 2,00,000
Bank Charges 200 Share Transfer Fees 100
Salaries 18,000 Dividend 2,000
Contribution to 1,000 Interest on 7,000
Staff Provident Investment
Fund
Travelling Expenses 250 Bank Interest 6,500
Rent, Rates, and 1,150 Commission 500
Taxes
Postage 500 Sale of Forms 500
Printing and 1,200 Share Capital 50,000
Stationery
Audit Fees 1,100 Reserve Fund 10,000
General Expenses 2,500 Share Capital 500
Redemption Fund
Bad Debts 1,000 Education Fund 4,000
Bonus to 2,000 Staff Provident 8,000
Employees Fund
Opening Stock 1,10,000 Depreciation Fund 8,000
 Purchases 1,00,000 Building Fund 6,000
Carriage & Freight 1,000 Bad Debts Reserve 3,500
Investment in 13,000 Loans from Banks 12,000
Government
Securities
Investment in 12,000 Loans from 12,000
Shares of Co-op. Government
Societies
Investment of Staff 4,000 Sundry Creditors 13,600
Provident Fund
Sundry Debtors 28,000
Buildings 18,000
Furniture & Fittings 1,800
Insurance 1,700
Repairs 1,300
Freehold Land 28,000
Cash in Hand 5,050
Cash at Bank 35,000
Total 3,40,000 Total 3,40,000

Adjustments:
1. Closing Stock valued at ₹ 25,000.
2. Outstanding Expenses:
- Rent: ₹ 250
- Interest: ₹ 200
3. Contribution to Education Fund: ₹ 100.
4. Provide for contribution to Share Capital Redemption Fund: ₹ 1,000.
5. Insurance paid in advance: ₹ 200.
6. Interest accrued on investment but not received: ₹ 200.
7. Create Bad Debt Reserve of ₹ 3,000.
8. Provide Depreciation on Buildings at 5% and on Furniture & Fittings at 5%.
9. Directors recommend a dividend of 10%.

Solution
Suchita Consumers' Co-operative Society Ltd.
Trading A/c for the Year Ended 31.03.2022
Particulars ₹ Particulars ₹
To Opening Stock 10,000 By Sales 2,00,000
To Purchases 1,10,000 By Closing Stock 25,000
To Carriage & 1,000
Freight
To Gross Profit
transferred to
Profit and Loss A/c 1,04,000
Total 2,25,000 Total 2,25,000

Profit and Loss A/c

for the Year Ended 31.03.2022
Particulars ₹ Particulars ₹
To Interest 2,800 By Gross Profit
transferred from
+ Outstanding 200 Trading A/c 1,04,000
To Bank Charges 200 By Share Transfer 100
Fees
To Salaries 18,000
Total 3,000
To Contribution to 1,000 By Dividend 2,000
Staff Provident
Fund
To Travelling 250 By Interest on 1,800 + 200 = 2,000
Expenses Investment +
Accrued
To Rent, Rates, 2,250 + 250 = 2,500 By Bank Interest 7,000
Taxes +
Outstanding
To Postage 500 By Commission 6,500
To Printing & 1,200 By Sale of Forms 500
Stationery
To Audit Fees 500
To General 1,100
Expenses
To Bonus to 2,000
Employees
To Insurance 1,700
Less: Prepaid 200
To Repairs 1,500
To Contribution to 1,300
Education Fund
To Contribution to 1,000
Share Capital
Redemption Fund
To Bad Debts 3,500
To New R.D.D. 1,000
To Depreciation: On 2,000
Building
To Depreciation: On 200
Furniture & Fittings
To Net Profit 82,800
Transferred to
Balance Sheet
Total 1,22,100 Total 1,22,100

Plan for Disposal of Surplus Fund

Memorandum Profit & Loss Appropriation A/c for the Year Ended 31.03.2022
Particulars ₹ Particulars ₹
To Reserve Fund 20,700 By Profit & Loss A/c 82,800
(25% of 82,800) (Net Profit)
To Proposed 5,000
Dividend
To Transfer to 57,100
Balance Sheet
Total 82,800 Total 82,800

Suchita Consumers' Co-operative Society Ltd.

Balance Sheet as on 31.03.2022
Liabilities ₹ Assets ₹
I. Share Capital: I. Cash & Bank
Balances:
Authorised ... Cash on Hand 5,050
shares of ₹ ... each
Subscribed ... 50,000 Cash at Bank 35,000
shares of ₹ ... each
II. Reserve Funds & II. Investments:
Other Funds:
Reserve Fund: 10,000 Investment in 13,000
Opening Balance Government
Securities
 Share Capital 1,000 Investment in Co- 12,000
Redemption Fund op Society
Building Fund 6,000 Investment of Staff 8,000
Provident Fund
Reserve for Bad 3,500 III. Sundry Debtors:
Debts
Staff Provident 500 Closing Stock 28,000
Fund
Add: Transfer 600 Accrued Interest 200
III. Loans: VI. Fixed Assets:
Loans from Govt. 12,000 Building 42,000
Loans from Bank 12,000 Furniture & Fittings 18,000
24,000 Leasehold Land 28,000
IV. Current 88,000
Liabilities &
Provisions:
Creditors 13,600 Less: Depreciation -11,000
Provision [8,000 +
3,000]
Outstanding 200 77,000
Expenses: Interest
Payable
Rent Payable 250 VII. Other Items:
450 Prepaid Insurance 200
V. Profit & Loss A/c 82,800
Total 2,00,450 Total 2,00,450
Note: Transfer to Reserve and proposed dividend will be given effect next year.
Chapter 3: Final Accounting for Co-operative Society (Co- Operative Housing Society)

Illustration 15: (Loan from MCHFS. Loan to members)

Following Trial Balance is extracted from the books of Ashok Tower Co. Hsg. Society Ltd.
Ashok Tower Co. Op. Hsg. Society Ltd.
Trial Balance as on 31.3.2022
Debit Balance RS Credit Balance RS
Insurance 3700 share Capital 50000
Electricity Charges 40000 1,000 Shares of * 50 each 26000
Salary of the Employee 10200 Sinking Fund Repairs Fund 15000
Administrative Expense 8300 Reserve Fund 25000
Property Taxes 160000 Income & Expenditure 20000
Water Charges 22600 A/c Balance
Repairs & Maintenance Contribution from
Expenses 40000 Members
Security Charges 10000 Painting Fund 26200
Conveyance 1500 Insurance 3700
A. G. Meeting Expenses 250 Electricity Charges 44600
Investments 60000 Employee Cost 10200
Shares of MHFS• 26900 Administrative Expenses 8300
Furniture 10500 Parking Charges 14000
Fire Extinguishers 5000 Contribution for Shares of 26900
Water Pump 7500 MHFS
Garbage Trolly 3192 Municipal Property 242000
Postage 1020 Taxes 65900
Subscription to Hsg. Water Charges 65000
Federation 300 Repairs & Maintenance 43300
Accounting Charges 7000 Fund 10900
Audit Fees 2500 Sinking Fund
Bank Charges 250 Interest on Investment 330000
Cultural Program Loan from MCHFS
Expenses 750
Bank 269300
Cash 1238
telephone Charges 5000
Loan to members 330000
10,27,000 10,27,000

Adjustments
1. Depreciate
Furniture by 10%
Fire Extinguishers by 15%
Water Pump by 15%
Garbage Trolley by 15%
2.Transfer 25% of the profit to Reserve Fund.
3.Telephone bill payable & 500.
4.Employee salary payable 1,500
5.Insurance of & 700 is paid in advance.
6.Authorised capital is 2,000 shares of & 50 each
You are required to prepare
1) Income & Expenditure A/c for the year ended 31st March 2018.
2) Balance sheet as on that date.

Solution:
Ashok Tower Co. Op. Hsg. Society Ltd.
Income & Expenditure A/c
Dr. for the Year ended 31»t March, 2022 Cr.
Expense RS Income RS
To Bank Charges 250 By Contribution from
To Salary Members :
10200 11700 Insurance 3700
Add Payable Electricity Charges 44600
1500 3000 Employee Cost 10200
Add Insurance 1500 Administrative Expenses 8300
3700 1020 Parking Charges 14000
Less Prepaid Municipal Taxes 242000
700 5500 Water Charges 65900
Conveyance 2500 By Interest on Investment 10900
Postage 7000
Telephone Charges 750
Add Payable 250
Audit Fees 10000
Accounting Charges 40000
Cultural Programme 22600
A. G. Meeting Expenses 160000
Security Charges 8300
Repairs & Maintenance 40000
Water Charges
Property Taxes 300
Administrative Expenses 1050
750
Electricity Charges 1125
Subscription to Hsg 479
Federation
Depreciation: Furniture 81526
Fire Extinguishers
Water Pump 399600 399600
Garbage Trolley
Excess of Income
Over Expenditure

Ashok Tower Co. Op. Hsg. Society Ltd.

Balance sheet
As on 31 march 2022

Liabilities RS Assets RS
I. SHARE CAPITAL I. CASH AND BANK 1238
Authorised Cash 269300
2,000 Shares of * 50 each 100000 Bank
Issued & Subscribed II. INVESTMENTS 60000
1,000 Shares of 50 each 50000 Fixed Deposits with Banks 26900
II. RESERVE FUNDS & Shares of MHFS
OTHER FUNDS III. LOANS & ADVANCES
Sinking Fund 26,000 Loan to Members 330000
+ Addition 43,300 69300 IV. FIXED ASSETS
Repairs Fund 15,000 80000 Furniture 10,500
+ Addition 65,000 25000 Less Depreciation 1050 9450
Reserve Fund 26200 Fire Extinguishers 5000
Painting Fund Less Depreciation 750 4250
Contribution for Shares of Water Pump 7500
MHFS Less Depreciation 1125 6375
III. SECURED LOANS 330000 Garbage Trolley 26900 3192
Loans from MHFS Less Depreciation 479 2713
IV. CURRENT LIABILITIES V. OTHER ITEMS 700
& PROVISIONS Prepaid Insurance
Telephone Bill 500 2000
Employee Salary 1500
V. Income &
Expenditure A/C 20000
Current year 81526 101526
 710926 710926

Plan for Disposal of Surplus Fund

Particulars RS Particulars RS
To reserve Fund 20832 To Balance B/D 20000
To Bal C/D 81444 By surplus for the year 81526
101526 101526

Illustration 16: (Contribution for various funds)

Following is the trial Balance of Avdhoot Co-operative Housing Society Ltd. As on 31st March
2022.
Debit RS Credit RS
Cash in Hand 500 Member's Contribution for
Cash at Bank 11000 Maintenance 247000
Debtors 51000 Interest on Saving Bank 2500
Building 1500000 Account Repaid Fund (Opening 110000
Electricity Charges 8000 Balance)
Repaid Expenses 4200 Reserve Fund (Opening 330000
Furniture 6500 Balance)
Printing and Stationery 1500 Entrance Fees 5000
Accounting Charges 10000 Member's Contribution
Conveyance Expenses 3200 towards
Depreciation 18800 Repair Fund 10000
Property Tax 11000 Member's Contribution
Insurance Premium 6100 towards
Miscellaneous Expenses 900 Sinking Fund 25000
Income and Expenditure 603200
Account
Sinking Fund (Opening 250000
Balance)
Subscribed Capital 1,000 50000
Shares of 50 each
Total 1632700 Total 1632700

Additional Information :
1. 25% of the surplus of the current year should be transferred to Reserve Fund.
2. Expenses payable were as follows :
a) Printing & Stationery 500/-
b) Audit Fees 3,000/-
c) Salary 1,300/-
d). Electricity Charges 700/-
Prepare Income and Expenditure account for the year ended 31" March, 2022 and Balance
Sheet as on that date in the prescribed format required under the Maharashtra Co-operative
Societies Act.
Solution:

Avdhoot Co-operative Housing Society Ltd

Dr. Income & Expenditure A/c for the Year ended 31»t March, 2022 Cr.
Expense RS Income RS
To Property Expenses By Collection from Members :
Electricity Charges 8000 By Members Contribution for
Add : Payable 700 8700 Maintenance 247000
Repairs Expenses 4200 Interest and Dividends
Property Tax 11000 Interest on Saving Bank A/c 2500
Insurance 6100
To Establishment Expenses
Printing and Stationery 1500
Add : Payable 500 2000
Accounting Charges 10000
Conveyance Expenses 3200
Miscellaneous Expenses 900
Audit Fees Payable 3000
Salary Payable 1300
Other Expenses
Depreciation 18800
Surplus to
Balance Sheet 180300
249500 249500

Balance sheet
As at 31 march 2022
Liabilities RS Assets RS
I.Share Capital I. Cash and Bank
Issued and Subscribed Cash on Hand 500
1,000 Shares of * 50 each 50000 Cash at Bank 11000
II. Reserve Fund and Other II. Investments
Fund III. Staff P.F. Investment
Statutory Fund 335000 IV. Loans and Advances
Add : Entrance Fees V. Sundry Debtors 51000
Sinking Fund 275000 VI. Current Assets
Add: Contribution VII. Fixed Assets
Repairs Fund 120000 Building 1500000
Add : Contribution Furniture 6500
III. staff Provident Fund VIII. Misc. Expenses & Losses
IV. Secured Loans IX. Other Items
V. Unsecured Loans X. Income & Expenditure A/c
VI. Deposits XI. Current Losses
VII. Current Liabilities
and Provisions Expenses
Payable Printing & Stationery
Audit Fees
Salary 5500
Electricity Charges
VIII. Unpaid Dividend
IX. Interest Accrued but
not Paid
X. Other Liabilities
XI. Income & Expenditure A/c
Last Year 783000
Add : Current Year 1569000 Total 1569000
Total

Plan for Disposal Surplus Fund

Particulars RS Particulars RS
To Reserve Fund 45075 To Balance b/d 603200
To Balance c/d 738425 By surplus for the year 180300
783500 783500
 Chapter 4: Investment Accounting

Illustration 28 (Purchase and Sale at Ex- Interest / Cum. Interest given)

Ms. Anusaya furnished the following details relating to her holding in 16% debentures of 7
100 each of X Ltd. held as current assets.
2021
January, 1 Opening Balance - Face Value 6,00,000; Cost 5,90,000
March, 1 1,000 debentures purchased ex-interest at 98
July, 1 Sold 2,000 debentures ex-interest at 7 1000
October, 1 Purchased 500 debentures at 98 cum-interest.
November, 1 Sold 2,000 debentures ex-interest at & 99.
Interest dates are 30** September and 31" March. Ms. Anusava closes her books on 31"
December.
Show Investment A/c in the books of Ms. Anusava for the year 2021.

In the Books of Ms. Anusaya

Investment in 16% Debentures A/c
Date Particular FV Interes Cost Date Particular FV Interes Cost
s t s t
1-1-21 To Bal 6000 24000 59000 31-3- By bank 56000
B/d 0 21 A/c
1-3-21 To Bank 1000 6667 98000 1-7-21 By bank 200 8000 20000
A/c A/c 0 0
1-7-21 To P&l 3429 30-9- By bank 40000
A/c 21 A/c
1-10-21 To Bank 500 49000 1-11- By bank 200 2667 19800
A/c 21 A/c 0 0
1-11-21 To P&l 1480 31-12- To Bal C/F 350 14000 34390
A/c 21 0 9
31-12- To P&L 90000
21 A/c
Total 7500 12066 74190 Total 750 12066 74190
7 9 0 7 9

Working note
1-1-2021
Interest Accrued
16% of R 6,00,000 for 3 Months i.e. 30th September to 1" January
96000/12*3 24000
1-3-2021
Purchase of Debentures
Ex-interest Price 1,000 Debentures @ * 98 98000
Accrued Interest
16% of 1,00,000 for 5 Months i.e. 30* September to 1" March
16000/12*5 6667

31-3-2021
Interest Received
16% of 7,00,000 for 6 Months i.e. 1-10-2020 to 31-3-2021
112000/12*6 56000

1-7-2021
Sale of Debentures
Ex-Interest Price
(2,000 × 100)
Accrued Interest 200000
16% of 2,00,000 for 3 Months i.e. 1-4-2021 to 30-6-2021
32,000 /12x 3 8000
Profit on Sale
Sale Price 200000
Less : Cost of Debentures Sold
6,88,000/7,000* 2,000 196571
Profit

30-9-2021
Interest Received : 16% of 5,00,000 for 6 Months i.e. 1-4-2021 to 30-9-2021
80,000/12 x 6 40000
1-10-2021
Purchase of Debentures
Cum Interest Price
500 × 98 49000
Less: Accrued Interest
Cost 49000

1-11-2021
Sale of Debentures Ex-interest Price
2,000 × 99 198000
Accrued Interest
16% of 2,00,000 for 1 Month i.e. October
32,000/12*1 2667
Profit on Sale
Sale 1,98,000
Less : Cost of Debentures Sold
5,90,000 + 98,000 + 3,429 + 49,000 - 2,00,000
6,000 + 1,000 + 500 - 2,000
5,40,429/5500 x 2,000 196520

Profit on Sale 1480

31-3-2022
Balance on Debentures A/c 350000
Accrued Interest 16% of 3,50,000 for 3 Months 14000

Illustration 29 (MV Of Investment Given)

On 1* April 2021, Mr. Mohandas held 400, 6% debentures of 3 100 each of Best Ltd., cost
being
36,400.
Best Ltd. pays interest on 30* June and 31" December every year.
The following other transactions were entered by Mr. Mohandas during the year ended 31st
March, 2021
Date No of debentures Transaction Rate
1st April, 2021 200 Sale 98 cum-Interest
1st October, 2021 200 Purchase 104 ex-Interest
1st December, 2021 400 Purchase 97 cum-Interest
1st February, 2022 200 Sale 97 ex-Interest

You are required to prepare investment in 6% debentures in Best Ltd. Account for the year
ended 31" March, 2022, as it would appear in the books of Mr. Mohandas. Market value of
his entire investments as March 2018; October 2015 on 31-3-2022 was Rs. 56,200.

Solution
Date Nv Interest Cost Date Particular Nv Inter Cost
Particul est
ar
01-04- To 40000 600 36400 01-04- By Bank 20000 300 19300
21 Balanc - - 1100 21 A/c By - 600 -
01-04- e b/d 20000 300 20800 30-06- Bank A/c - 2400 -
21 To 40000 100 37800 21 By Bank 20000 100 19400
Profit & 200 - 1400
 01-10- Loss A 2400 31-12- A/c By
21 To Bank - 21 Bank A/c 60000 56200
01-12- A/c • 01-02- By Profit 900
21 To Bank 22 & Loss
01-02- A/c 31-03- A/c (Loss
22 To 22 on
31-03- Profit & 31-03- Valuation
22 Loss A, 22 )
To
Profit &
Loss A

100000 4300 96300 100000 4300 96300

Working note
01-04-2021
Interest Accrued
6% of 40,000 for 3 months. 600
31-12-2020 to 01-04-2021
2,400/12x 3
01-04-2021
Cum Interest Sale Price
200 × 98. 19600
Less: Interest Accrued
6% of 20,000 for 3 Months
31-12-2020 to 01-04-2021
1,200/12x 3 300
Sale 19600

Less : Cost of Sale.

36,400/40,000 × 20,000 18200
Profit 1100
30-06-2021
Interest Received
6% of 20,000 for 6 months
1,200/12 X 6 600
01-10-2021
Ex-Interest Purchase Price. 20,800
200 × 104
Accrued Interest
30-06-2021 to 01-10-2021
6% of 20,000 for 3 months.
1,200/ 12x 3 300
01-12-2021
Cum-Interest Purchase Price
400 × 97 38,800
Accrued Interest for 5 months.
30-06-2021 to 01-12-2021
6% of * 40,000 for 5 months
2,400/ 12 × 5 1000
Cost 37800
31-12-2021
Interest Received
6% of * 80,000 for 6 months. 2400
4,800/12 x 6
01-02-2022
Ex-Interest Sale.
200 × 97 19400
Accrued Interest.
6% of 20,000 for 1 month.
1,200/ 12 x 1 100
Profit on Sale. 19400
Ex-Interest Sale Price
Less : Cost of Sale.
36,400 + 1,100 + 20,800 + 37,800 - 19,300 /80,000 × 20,00.
76,800 / 80,000 × 20,000 19200
Profit on Sale. 200
31-03-2022
Balance 60000
N.V. 1,00,000 - 40,000
Accrued Interest
6% of 60,000 for 3 months.
3,600 /12 x 3 900
Cost of Investment.
36,400 + 1,100 + 20,800 + 37,800 + 200 - 19,300 - 19,400. 57600
M.V. of Investment 56200
Loss on Valuation 1400
Chapter 5 : Mutual Fund

Illustration 18 (Accounting for M.F.)

M.F has 10,000 shares of Reliance and 8,000 shares of TCL Ltd. acquired on 30 th Oct,2021.
Cost of Reliance Shares is Rs.15
Cost of TCL shares is Rs.25.
M.V. of Reliance shares id Rs. 14on 31.3.2022
M.V. of TCL shares is Rs.27 on 31.3.2022.
Pass Journal Entries
Solution:
Journal
Date Particulars Dr Cr
30th Reliance shares A/c Dr 1,50,000
Oct,2021 TCL shares A/c Dr 2,00,000
To Bank A/c
(Being Purchase of shares) 3,50,000
31st Revenue A/c Dr 10,000
March To Provision for loss in Investment 10,000
2022 (Being reduction in the values of shares of Reliance)
TCL shares A/c Dr 16,000
To Unrealised Appreciation Reserve 16,000
(Being appreciation in the shares of TCL
April Unrealized Appreciation Reserve A/c Dr 16,000
To TCL shares A/c 16,000
(Being reversal of the entry)

Illustration 19 (Accounting for Investment by Mutual Fund)

The investment Portfolio of a Mutual Fund Scheme includes 5,000 shares of X Ltd. And 4,00
shares of Y Ltd. Acquired on 31.12.2020. The cost of X Ltd. Shares is Rs. 40 while that of Y Ltd
is Rs 60. The market value of these shares at the end of 2016-17 was Rs.38 and Rs. 64
respectively. on 30.06.2018, shares of both the companies were disposed off realizing Rs.37
per X Ltd shares and Rs,67 per Y Ltd. Shares. Show important accounting in the books of the
fund for The accounting Year 2020-2021 and 2021-2022

Solution:
Date Particulars Dr Cr
31.12.2020 Investment in shares of X Ltd. A/c Dr 2,00,000
(5,000shares x Rs.40)
Investment in shares of Y Ltd. A/c Dr 2,40,000
To Bank A/c 4,40,000
 (Being investments made in Shares of X Ltd and Y
Ltd recording at cost)
31.3.2021 Revenue A/c (5,000 shares x ( 40-38) Dr 10,000
To Provision for depreciation in the value of 10,000
investments A/c
(Being Investment in Shares of X Ltd. Marked to
market on Balance sheet date and Depreciation
in the value of the Investment provided)
31.3.2021 Investment in Shares of Y Ltd A/c Dr 16,000
(4,000 shares x (64 -60)) 16,000
To unrealized Appreciation Reserve A/c
(Being investment in Shares of Y Ltd. Marked to
Market on Balance Sheet date and Appreciation
in value of the Investments recorded)
1.4.2021 Unrealized Appreciation Reserve A/c Dr 16,000
To Investment in Shares of Y Ltd 16,000
(Being Unrealized Appreciation Reserve A/c
reversed in the beginning of the year)
30.6.2022 Bank A/c (5,000 shares x 37) Dr 1,85,000
Provision for depreciation in Value of
Investments A/c Dr 10,000
(Available Balance)
Revenue A/c (Balancing figures) 2,00,000
To Investment in Shares of X Ltd. A/c Dr 5,000
(Being Investment in Shares of X Ltd. Sold and
resultant Loss on sale first adjusted towards
balance in Provision account and balance
charged to revenue Account)
30.6.2022 Bank A/c (4,000 Shares x 67) Dr. 2,68,000
To investment in shares Of Y Ltd. A/c 2,40,000
(carrying amount of 2,40,000)
To revenue A/c (Balancing Figures) 28,000
(Being Investment in shares of Y Ltd. Sold and
resultant profit on the sale fully recongised in the
revenue account )
THEORY
June 2024

Q5) a) Explain the elements of financial statement according to IFRS

Solution-
The five elements financial statements are:-
1.Assets
An asset is a resource controlled by the entity as a result of past events and from which
future Economic benefits are expected to flow to the entity. Assets are classified as:
i) Financial Assets
a) Cash-example currenct cash and bank deposits; bank deposits reflects a
contractual right to receive cash; but gold bullion is a commodity.
b) An equity instrument of another entity- example, investment in equity of
another company.
c) An contractual right-
• To receive cash or another financial asset from another entity.
• To exchange financial assets or financial liabilities with another entity
for trems which are potentially favourable.
d) A contract that will or may be settled in the entity's own equity instruments
and is:
• Non derivative dir which the entity is or may be obliged to receive a
variable number of the entity’s own equity instruments, or
• A derivative which will or may be settled other than by exchanged of a
fixed amount of cash or another financial asset for a fixed number of
entity's own equity instrument.
ii) Current assets
a) They are expected to be realized or intended for sale or consumption within
the normal operating cycle of the entity; examples are inventories and trade
debtors.
b) They are held primarily for the purpose of trading; examples are investment I
equity shares, listed Debentures, traded derivatives.
c) They are expected to be received within 12 months after the reporting.
Examples are loans and advances to be collected within 12 months from the
end of the reporting period.
d) They are cash equivalents. As per IAS 7 cash comprises of cash on hand and
demand deposits. Cash equivalent are highly liquid investments that are
readily converted to known amounts of cash and which are subjected to
insignificant risk of changes in value.
iii) Non current assets
It includes tangible, intangible and financial assets of a long term nature.
Sr CATEGORIES OF ASSETS IFRS'S/IAS
No.
1. Property, Plant and Equipment other than Leasehold land Example IAS-16
of Property, Plant & Equipment are Freehold Land, Building, Plant,
Equipment, Furniture, Ship, etc. Intangible Assets

2. Intangible Assets IAS-38

Examples are License, Patent, Software, Website, Purchased Brand,
Purchased Customer List, intangible asset arising out of service
concession arrangement, etc.

3. Finance Lease Assets IAS-17

Lessee recognizes the assets taken under financial lease with in
Property, Plant & Equipment as separate line item.

Lessor recognizes Finance Lease Receivables

4. Biological Assets 1AS-41
Examples are living animal or plant

5. Investment Property IAS-40

Examples are land and building leased out under operating lease,
vacant land held for capital appreciation.

6. Financial Assets IAS-32

Examples investments in equity and debt Instruments of another IAS-32
entity, derivative assets, cash and cash equivalents, receivables, IFRS-9
loans, Investment in subsidiary, associate and joint venture IAS-27
1AS-28
IAS-31

7 Deferred Tax Asset 1AS-12

8. Special Assets arising out of business combinations Examples are IFRS-3
Goodwill, Indemnification Assets, etc.
9. Insurance Assets IFRS-4
 Example: Reinsurance Asset
10. Exploration and Evaluation Assets IFRS-6
11. Inventories IAS-2
Inventories of raw materials, work in progress, Finished goods,
regulars spares etc.
12. Employees Benefit Plan Assets IAS-19
13. Regulated Assets Proposed
Expenses/Losses incurred during the current accounting period Standard
which can be recovered in future period through regulated rates
14. Prepaid Lease IAS-7

2. Liabilities
A liability is a present obligation of the entity arising from past events, the settlement which
is expected to result in an Outflow from the equity of resources embodying Economic
benefits .
Liabilities are classified as:-
i) Financial Liabilities
A financial liability is any liability that has :-
a) A contractual obligation
i) to deliver cash or any other financial asset to another entity
ii) to exchange financial instruments with another entity for terms which
are potentially unfavourable.
b) A contract that will or may be settled in the equity's own equity instruments
and is
i) Non derivative for which the entity is or may be obliged to receive a
variable number of the entity’s own equity instruments or
ii) Derivative which will or may be settled other than by exchange of a
fixed amount of cash or another financial assets for a fixed number of
entity’s own equity instruments.
Examples are account payable bills payable, loans, bank draft, debentures payable etc.
ii) Current liabilities
The liabilities which satisfy the following conditions are current liabilities:
a) They are expected to be settled in entity’s normal operating cycle.
b) They are primarily held for trading,
c) They are due to be settled with period of twelve months from balance sheet
date ,
d) The entity does not have any unconditional right to defer settlement of the
liability at least twelve months after the balance sheet date.
iii) Non current liabilities
The liabilities Other than current liabilities are non current liabilities.
The following are the examples of current liabilities
• Trade and other payments
• provision financial liabilities excluding amount shown under about 2
points
• liabilities and assets for current tax as defined in IAS 12 income taxes.
• Deferred tax liabilities and deferred tax asset as defined in IAS 12
• liabilities included in disposal groups classified as held for sale in
accordance with IFRS 5
3. Equity
Equity is the residual interest in the assets of the entity after deducting all its liabilities.
Equity comprises:
i) equity instruments
ii) share premium
iii) retained earnings and reserve arising out of other comprehensive items.
4. Income
Income increases the economic benefits during the accounting. In the form of inflows or
enhancements of acids or decrease of liabilities that result in increase in equity other than
those relating to contributions from equity participants. Incomes are termed as:
i) Total comprehensive income: total comprehensive income as the change in
equity during a period resulting from Transactions and other events other than
those changes resulting from transactions with owners in their capacity as
owners. Total comprehensive income comprises of all components of profit or
loss and of other comprehensive income.
ii) Other comprehensive income other comprehensive income comprises of items
of income and expenses including reclassification adjustments that are not
recognised in profit or loss as required or permitted by other IFRS. The
components of other comprehensive income include
• Revaluation surplus
• On translation Of the financial statements of foreign operations
• Fair value measurement available for sale of financial assets.
• Actually gain or loss on defined benefit pension plans.
• Effective proportion of gains and losses on hedging.
5. Expenses
Expenses are decreased in economic benefits during the accounting. In the form of outflows
or depletions of acids or incurrence of liabilities that result in decrease n equity, other than
those resulting to distributions to equity participants.
Q 5) b) Explains schemes according to investment objectives of mutual funds.
Solution:
A. Functional and classification
1.Open ended schemes
This type has no fixed maturity period. An open ended funds sales and repurchase units at
anytime at a price linked to NAV. This scheme is available for subscription on a continuous
basis. It is most liquid.
2. Close ended schemes
It makes a one time sale of a certain number of units during the initial period. It has a
stipulated maturity period. It is open for subscription during a certain period. Some close
ended funds give an option of selling back to the mutual fund through periodic repurchase
at NAV. NAV is disclosed generally on weekly basis.
B. Operational classification
3. Interval schemes
it combines the features of both open ended and close ended scheme. It may be traded on
Stock Exchange at anytime.
Balanced fund
The fund provides regular income. This scheme invests in both equity and debt.
Tax saving funds
It offers tax rebate to the investors under the provision of Income Tax Act.
Offshore funds
These funds will have non residential investors. They are regulated by the provisions of the
foreign countries where these funds are registered.
Growth funds
The objective of this fund is to provide capital appreciation over the medium and long term
period.Growth funds invest in the companies whose earnings are above average. They are
less volatile.
Portfolio funds
This fund invests in predetermined portfolio of securities. They are more volatile than the
target growth.
Fixed term plan
This is close ended in nature. The scheme ensures a fixed number of units for each series
after an initial lock in period. No exit or entry is allowed in between.
SIP
This type of plan helps the investors to ride out the market volatility. When the stock market
comes down, the pre decided period SIP amount fetches more units for the investors. This
additional units contribute to relatively better overall return to the investor. In conventional
SIP, of fixed amount is deducted from your bank account every month to be invested in the
scheme of your choice.
There is a flexi SIP plan also suit the needs of the investors.
Exchange traded funds (ETF)
It is a cross between a stock and a mutual fund. It is a portfolio or basket of securities that
replicates the composition of indices like nifty, Sensex etc. It keeps a track of market indices
and is well diversified. It is managed as a mutual fund but traded as a stock. The price of ETF
depends on the prices of stock. It is convenient to trade. It offers diversification and
flexibility at the same time.

Q5 ) c) Short notes
1.Features of mutual funds
The following are the features of mutual funds:-
i) It is a mechanism for pooling the resources
ii) The resources are pooled by sales of units to the investors
iii) Investment in securities is spread across a wide cross section of industries.
iv) Mutual funds reduce the risk.
v) Units are issued to the investors in accordance with the amount of money
invested.
vi) Investors in mutual funds are called unit holders.
vii) Profits and losses are shared by the investors in proportion of their investments.
viii) Mutual funds come out with defence schemes with different objectives.
ix) It is required to be registered with SEBI
x) The amount raised is invested in financial assets.
xi) It ensures the investors professional management of portfolio.
xii) Investment is made in large number of securities like shares, debentures, bonds.
xiii) Mutual funds do not decide and is investors risk preference.
xiv) Each mutual fund has its own investment objectives such as appreciation,
current income, money market income.
xv) An investor has to choose the appropriate mutual fund in which to invest.

2. Fixed income bearing securities

It refers to the securities on which the rate of return is fixed or constant. Investment in
debentures government securities fall in this category. Interest on these securities is payable
at a fixed rate on certain dates.

3. Advantages of co-operative society

The following are the advantages of cooperative society
• Access to goods and services
Cooperative societies can provide access to goods and services in communities that might
not otherwise have them.
• Social benefit
Cooperative societies can provide education and instruction for their members, and can be a
model of good business.
 • Business stability
Cooperative societies are legally separate business entities, so they are not affected by the
death of any of their members.
• Democratic management
Cooperative societies are controlled democratically, with each member having equal voting
rights.
• Limited liability
Members are only liable for the amount of capital they contribute, so they cannot be held
personally liable for debts.
• Government support
Cooperative societies can receive government support in the form of low taxes, subsidies,
and low-interest loans.
• Low-cost operations
Cooperative societies can operate at a lower cost because they remove middlemen and rely
on voluntary contributions from their members.
• Quick loans
Cooperative societies can provide quick loans to their members.
• Financial assistance
Cooperative societies can provide financial assistance to farmers and others who earn less.

4. The Electricity Act,2003

The electricity act 2003 replaced the Indian electricity app common 1910.
The Electricity (supply) act, 1948 and the Electricity Regulatory Commission act, 1998.
The electricity act 2003 which governs electricity companies does not prescribe any format
for preparation and presentation of financial statements. Hence schedule 3 of the
Companies Act, 2013 should be followed.
The electricity act 2003 extends to the whole of India except the state of Jammu and
Kashmir.
The main features of electricity act 2003.
i) The activities like generation transmission and distribution have been
separately identified.
ii) The act de-licenses power generation completely except for hydro power
projects over a certain size.
iii) 10% All of the power supplied by suppliers and distributors to the consumers
have to be generated using renewable and non conventional sources of
energy.
iv) It is mandatory to set up state electricity Regulatory Commission.
v) Appellate Tribunal to you’re the appeals against the decision of CERC and
SERCs.
vi) Ombudsman scheme for consumer is grievance redressal.
 vii) Provision for private licenses in transmission and entry in distribution
through independent network.
viii) Metering of all electricity supplied made mandatory.
ix) Provision related to theft of electricity made more stringent.

5. IFRS- 1
When an organization reports under Indian accounting standards decides to go for IFRS it
has to comply with certain requirements prescribed by IFRS. These requirements are laid
down by IFRS 1.
First time adoption of IFRS. Due to popularity of IFRS globally the iasb standard has gained
considerable Significance in recent years period the IFRS 1 is becoming more important
these days as more and more countries of the world are adopting IFRS as they are national
accounting standards.
Objective
The objective of IFRS is to ensure that the first IFRS financial statement and interim financial
records Contain high quality information that
i) it is transparent for users and comparable over all. Periods presented.
ii) It through guides a suitable starting point for accounting in accordance
with IFRS.
iii) It can be generated at a cost which doesn’t exceed do benefits.
iv) It is comparable over all periods presented.
An organization chart prepare and present and opening I fill statement of financial position
on the date of transition to IFRS peer this is the starting point for accounting according to
IFRS.
Date of transition
It is the date of the beginning of the earliest period for which an organization presents full
comparative information under IFRS in its first IFRS financial statements.

Exceptions from other IFRS

IFRS one requires full retrospective application of all IF Rs on first time adoption with limited
exemption in respect of the following:
i) property plant and equipment
ii) Business combinations
iii) Employee benefits
iv) cumulative transitional differences
v) Compound financial instruments
vi) Asset and liabilities of subsidies, associates and joint ventures
vii) Designation of previously recognised financial instruments
viii) Share based payment transactions
ix) Insurance contracts
 x) Decommissioning liabilities included in the cost of plant and
equipment
xi) Leases
xii) fair value measurement of financial assets and liabilities
xiii) service concession arrangements
xiv) Borrowing costs
Mandatory exception to retrospective application:
There are 5 mandatory exception
i) Derecognition of financial assets and liabilities
ii) Hedge accounting
iii) Estimates
iv) Assets held for for sale
v) Assets held for sale
vi) Non controlling interests.