Model: Disposal of surplus—Amount refundable to customers The following balances relate to an electric company and pertain to its accounts for the year ended 31 December 2010:

Rs.

Share Capital

60,00,000

Reserve Fund (Invested) in 5% Govt. Securities at Par)

30,00,000

Contingencies Reserve (Invested in 6% Govt. Loan)

10,00,000

Loan from Stare Electricity Board……….

15,00,000

11% Debentures

5,00,000

Development Reserve

5,00,000

Fixed Assets

1,00,00,000

Depreciation Reserve on Fixed Assets

40,00,000

Consumer’s Deposits

40,00,000

Amount Contributed by Consumers Towards Cost of Fixed Assets

1,00,000

Tariffs and Dividends Control Reserve

2,50,000

Monthly Average of Current Assets

10,00,000

Intangible Assets:

2,00,000

The Company earned a profit of Rs.5,00,000. Show how the profits of the company will be dealt with under the provision of the Electricity Act, assuming that the bank rate during the year was 8%.