Statement of financial position/Balance sheet structure Level of difficulty: Moderate Chugoku Electric Power Company, Inc., was established in 1951 as one of ten electric power companies in Japan. It maintains its head office in the city of Hiroshima and supplies electricity to the Chugoku region through an integrated structure that encompasses all stages of power supply, from generation to transmission and distribution. The consolidated balance sheet for the period 2009 2011 follows (Source: Annual reports 2010 and 2011). The consolidated financial statements of Chugoku Electric Power have been prepared in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange Law and its related accounting regulations, and the Electricity Utilities Industry Law and in conformity with Japanese GAAP, which are different in certain respects as to application and disclosure requirements from IFRS.

Required

1 What is the format of the balance sheet?

2 Prepare a simplified balance sheet with three subheadings in the assets and three sub-headings in the equity and liabilities.

3 Prepare the statement of financial structure (i.e., compute the working capital, working capital need and net cash).

4 Comment your findings.