1 Ledger balance, Aug. 31, 1923, was $1,831,757.25. Difference of $570,246.66 represents estimated amount to complete construction. Ledger balance, Aug. 31, 1923, was $1,317,694.07. Difference of $159,485.69 represents estimated amount to complete construction. Miscellaneous real estate. Miscellaneous equipment (combined).. Total, general and miscellaneous.. Total, utilty property. Stock of material and supplies. [78] Retirement reserve.-An account entitled "Provision for depreciation' was first established in the year 1908, shortly after the company began commercial operation, and the balance of this account had increased to $5,491,661.33 at November 30, 1927. A summary of this account is shown herewith: Total credit during the period under review: Generating plants__ General structures and equipment.. Other Total.... Other credits (adjustments, etc.). Total credits__ Total debits during the period under review: $3, 302, 183. 15 4, 278, 811. 73 2, 292, 168. 58 209, 511. 43 $10, 125, 304. 53 105. 93 10, 125, 410. 46 4, 517, 713. 93 14, 193. 25 10, 454. 34 39, 899. 03 General structures and equipment_- 51, 488. 58 Provision, or accrual, for depreciation was first recorded in the year 1908 and the amount of $21,314.82 was calculated on the basis of $0.00 1526 per kilowatt hour produced. A similar amount was provided by a charge to income in the year 1909 and no further accruals, or charges, were recorded until 1915. In that year a definite system of accruals was established and the results obtained by this method to November 30, 1927, are summarized herewith: Generating plants: Accrual, Jan. 1, 1915. to Nov. 30, 1927 Steam-electric (5 percent to 1924, including 7 percent after).... $2, 751, 891. 03 Total distributing system--- General structures and equipment (2, 5, 10, 20 percent)... 250, 983. 76 299, 308. 36 550, 292. 12 3, 302, 183. 15 4, 035, 582. 69 72, 129. 44 171, 099. 60 4, 278, 811. 73 232, 677. 87 40, 501. 56 2, 018, 989. 15 2, 292, 168. 58 209, 511. 43 10, 082, 674. 89 The records of the company were unusually complete in this respect, as the accrual for each plant, line, substation, etc., was recorded separately and cumulatively. The provision for depreciation was calculated monthly on the basis of recorded book values, less nondepreciable items, at the rates outlined above. The major items among those classed by the company as nondepreciable, were as follows: Land and water rights; reservoirs; clearing, road changes, etc.; interest during contruction; appreciation due to revaluation, as of August 31, 1923. It has previously been shown that Southern Power Co. canceled all provision for depreciation to August 31, 1923, by crediting fixed capital accounts and charging retirement reserve with an amount of $4,517,7 13.93. The fixed capital accounts were then charged with an amount of $10,719,272.75 and surplus was credited. These transactions were recorded as the result of two appraisals, as previously discussed, and have the effect of writing up the net ledger depreciated value of the fixed capital by the amount of $10,719,272.75. Since this amount is excluded in the base in accruing for depreciation, it is apparent that the appreciation will remain in the net fixed capital accounts; that is, recorded ledger value, less retirement reserve, until the property is retired. Upon retirement of property to which appreciation is applicable the appreciation is charged to surplus. [80] The balance of the retirement reserve of Southern Power Co. at December 1, 1927, or $5,491,661.33, was recorded on the books of Duke Power Co. at date of merger. INVESTMENTS IN SECURITIES Introduction.-The investment account of Southern Power Co. entitled "stocks and bonds of other companies" increased from $1,500,000 at December 31, 1905, to a high point of $5,751,555.18 at December 31, 1910, and at November 30, 1927, amounted to $5,244,146. A schedule showing the annual balances of the investments in securities of individual companies appears on the two following pages. This statement is subdivided into two sections, the first of which shows the investments in securities of affiliated companies, and the second covers other security investments. Memoranda showing the profit and/or loss to the company resulting from these security transactions are also shown on this statement. |