DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH

Name : N. USHA RANI

Designation : Lecturer
Branch : Commercial & Computer Practice (CCP)
Institute : GPW/Guntur
Year/Sem : III Sem
Sub-Code : CCP-302
Subject : ACCOUNTANCY-II
Topic : Non-Trading Concerns
Duration : 50 minutes
Sub Topic : Preparation of Income and Expenditure
Account from list of balances
Teaching Aids : PPT ANIMATIONS
CCP302.70 1
Objectives

On completion of the period, you will be able to

prepare the :
 Income and Expenditure A/c
 from Receipts and Payments A/c
 and List of balances

CCP302.70
CCP302.70 2 2
Recap

So far you learnt that

 Income & Expenditure A/c is important for Non-

Trading concerns:
 To know the actual financial position of a
current year
 It covers all the revenue incomes
(received and receivable) and revenue
expenses (paid and payable)

CCP302.70 3
Preparation of Income and Expenditure
Account from list of balances

CCP302.70 4
Example 1:

1. ‘Citizen Club’ had the following Receipts and

Payments Account for the year ending October
31,1984. Prepare Income and Expenditure
Account

CCP302.70 5
 Receipts Rs. Payments Rs.

To Bank Balance 24,420 By Premises

To Balance b/d 450 (purchased on
To Subscriptions 62,130 1-11-84) 30,000
To Fair Receipts 7,200 By Honorarium to Secretary 11,000
To Variety show By Rent 2,400
Receipts 12,810 By Rates & Taxes 3,780
(net) 690 By Printing and Stationary 1,410
To Interest 22,350 By Sundry Expenses 5,350
To Bar Collection By Wages 2,520
By Fair Expenses 7,170
By Bar Purchases –
Payments 17,310
By Repairs 960
By New Car (less procee
ds of old car 9,000) 37,800
By Balance /d(Cashinhand) 10,350
1,30,050 1,30,050
CCP302.70 6
 Problem …. (Contd.,)
The additional information obtained:
1-11-83 31-10-84
Rs. Rs.
Subscriptions due 3,600 2,940
Premises at cost 87,000 1,17,000
Accumulated Depreciation
On Premises 56,400 -
Car at cost 36,570 46,800
Accumulated Depreciation on
Car 30,870 -
Bar Stock 2,130 2,610
Creditors for Bar Purchase 1,770 1,290

Secretary Annual Honararium is a Rs.12,000. Depreciation

on Premises and car is to be @ 5% & 20 % on written
down value. CCP302.70 7
Solution:
Working Notes:
1) Calculation of profit on Bar Rs. Rs.
Bar purchases 17,310
Add: Creditors on 31-10-84 1,290
18,600
Less: Opening crs. 1,770
Purchases 16,830
Add: Opening Bar Stock 2,130
18,960
Less: Closing Stock 2,610
Cost of Collections 16,350
Bar Collections 22,350
Therefore, Profit on Bar (Rs.22,350 – Rs.16,350) = Rs.6,000
CCP302.70 8
 Working Notes:

2) Profit on Sale of Car: Rs.

Car (costs) 36,570

Less: Accumulated depreciation on car 30,870
5,700

Sale Value = 9,000

Profit = (Rs.9,000 – Rs.5,700) Rs.3,300

CCP302.70 9
CCP302.70 9
 Solution: Citizen Club

Income and Expenditure Account for the year ending 31st Oct, 1984
Expenditure Rs. Income Rs.
To Honorarium to Secy. 11,000 By Subscription 62,130
Add: O.S (12,000 – 11,000) Add : O.S at the end of 1984
1,000 12,000 2,940
To Rent 2,400 65,070
To Rates & Taxes 3,780 Less: O.S at the beginning of
To Printing & Stationery 1,410 1983 3,600
To Sundry Expenses 5,350 By fair Receipts 61,470
To Wages 2,520 By variety show 7,200
To Fair Expenses 7,170 By Interest 12,810
To Repairs 960 By Profit on Bar(1) 690
To Depreciation By Profit on Sale of 6,000
Premises 3,030 Car (2)
Car 9,360 12,390 3,300
To Excess of Income over 43,490
Expenditure
91,470
91,470

CCP302.70 10
 ASSINGMENT

1) The following is Receipts and Payments Account

drawn from the Cash Book of the Bharat Cricket
Club for the year ended Dec 31,1984.

CCP302.70 11
 Receipts Rs. Payments Rs.
1984 Jan 1 1984 Dec 31
Cash in hand 1,000 Remuneration to Cricket Coach 4,500
Balance at Bank as per Bank Ground man’s pay 3,000
Pass Books: Purchase of Equipment and
Savings A/c 20,300 Moving Machines 15,000
Bar Room Expenses
Current A/c 6,000 2,500
Ground Rent
Dec 31 2,500
Club Night Expenses
Bank Interest 300 4,000
Printing and Stationery
Entrance Fees 2,000 2,800
Repairs of Equips. & Machinery
Donation and Subscription 26,000 Honaraira to Sec. For the year 1983 5,000
Bar Room Receipts 3,000 Balance at Bank as per Bank 4,000
Contribution to Club Nights 1,000 Pass Book:
Sale of Equipment 800 Saving A/c
Net proceed of Club Nights 7,800 Current A/c 20,900
Cash in Hand 1,500
2,500
68,200 68,200

CCP302.70 12
Additional information:

On 1st Jan On 31st Dec

1984 1984
Rs. Rs.
1) Subscription due from members 1,500 1,000
2) Sums due from printing and stationery 1,000 800
3) Unpresented cheques on Current Account,
being payments of repairs 3,000 2,500
5) Interest on Saving Bank Account not
entered in Pass Book - 200
7) Estimated value of Machinery & Equipments 8,000 17,500

CCP302.70
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6. For the year ended Dec 31st, 1984, the honorarium
to the secretary are tobe increased by a total of
Rs. 2,000 and the ground man to receive a bonus
of Rs.2,000.
7. Capitalize entrance fees
You are required to prepare:
An Income and Expenditure Account for the year
ended December 31st,1984;
Ans. Excess of Income Rs.1,500

CCP302.70 14
(2) Following is the Receipts and Payments
Account of the Delhi Club for the year
ended 31st December,1984.

CCP302.70 15
Receipts Rs Payments Rs

To balance b/d By Secretary’s

Cash 2,000 Remuneration 6,000

Bank 10,000 12,000 By Salary of
Staff 5,000
To Subscriptions: By Canteen
Expense 12,000
For 1984 5,000 By Construction

For 1983 200 of Building 15,000

For 1985 100 5,300 By Balance C/d
To Interest from 5% Cash 800
Govt. security (purchased Bank 2,000 2,800
In the past at discount
of 1%) 2,000
To sale of Old Furniture 1,000
To sale of Newspapers 500
To Canteen Collection 10,000
To Donation received for
Building Fund 10,000
CCP302.70 16
40,800
40,800
 With the additional information given below, prepare the
Income and Expenditure Account for the year ended 31st
December,1984

As on 31st As on 31st
Dec., 1983 Dec.,1984
Rs Rs
(d) Subscription receivable 1,000 ?
(e) Subscription receivable in advance 200 100
(f) Salary to staff outstanding 2,000 1,000
(g) Canteen Expenses prepaid 1,000 500
(h) Furniture etc., 10,000 ?
(i) Construction Expenses
outstanding 2,000
(e) Subscription due for the year 1984 was 5,500
(l) The book value of furniture sold was 3,000
(m) Charge Depreciation on furniture at 10%
on the closing net balance.
Ans. Excess of Expenditure Rs.7,200/-
CCP302.70 17
3)The following were the assets of National Club on 1-

1-1969
Rs. Rs.
Library 5,000 Furniture 1,000
Sports Material 2,000 Income due to the Club
Fixed Deposit with SBI for use of Lecture Hall 400
10,000 Cash in Hand 200
Subscription due 400

The following was an extract of the Cash Book for the year
ending 31-12-1969.

CONTD.
CCP302.70 18
 Receipts Rs. Payments Rs.
To Balance 200 By Library Books 1,500
To Cash at Bank By Printing and Stationery 300
(Fixed Deposits) 10,000 By Magazine Expenses 700
To Subscriptions 8,800 By Rent 1,030
To Donations 2,000 By Purchase of Investment 3,000
To Sale of Magazines 500 By Staff Salaries 1,200
To Advertisements in By Honorarium to Secretary 500
Club Magazines 750 By Advertisements 100
To Rent of Lecture Hall 1,500 By Charity 50
To Interest on Fixed By Musical Evenings 100
Deposits 400 By Annual Social 500
To Entertainment 2,000 By Cash on Hand 7,200
To Sale of old furniture 300 By Fixed Deposits 10,000
26,450 26,450
CCP302.70 19
CONTD.
Additional Information
Subscriptions owing for the current year amounted to
Rs.500.Interest accruing on investments came to Rs.
150, Rs. 60 had to be paid towards salaries. Rent
incurred for the current year was actually Rs. 1,100.
You are required to prepare the Income and
Expenditure Account for the year ending 31-12-1969.

Ans. Excess of Income Rs.9,190/-

CCP302.70 20
• Given below is the receipts and payments account
of the Indian Sports Club for the first year ended
31st Dec. 1971. Prepare there from and additional
details given an Income and Expenditure Account

CONTD.
CCP302.70 21
Subscriptions due Rs.1,120 to be taken at 75%.
salaries unpaid Rs.125. Insurance paid is for the
one year commencing from 1-7-1971. Write off
Rs. 1000 as depreciation on building and Rs. 50
on furniture. One half of the entrance fees are to
be capitalized.

CCP302.70 22
 Receipts Rs. Payments Rs.
To subscription including By Buildings 62,000
Rs. 500 for 1972 8,600 By Salary 1,025
To Lockers Rent 320 By Tennis 1,315
To Interest 140 By Insurance 120
To Sale of Cricket Material 130 By Furniture 1,520
To Sundry Receipt 20 By Printing 715
To Tennis Fees 1,350 By Expenses of Matches 8,770
To Billiards Fees 310 By Garden Expenditure 900
To Receipts from Matches 9.900 By Billiard Table (New) 2,000
To Entrance Fees 4,220 By Telephone 237
To Special donation for By Sundry Expenses 303
Building fund 60,000 By Newspaper subscription
300
paid upto 31-3-72 140
By Advance to Clerk 5,225
By Purchase of 420
investments
84,990 84,990
By Balance

CCP302.70 23
QUIZ
1) Capitalized Entrance fees of a Non – Trading
companies appears in
a) Balance Sheet
b) Income and Expenditure Account
c) Receipts and Payments Account

d) None of the above

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Assignment

1. Solve the problems given in this topic

CCP302.70 25