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 & Expenditure
A/c from list of balances
Teaching Aids : PPT ANIMATIONS
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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

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Recap:
So far you learnt that

 Income & Expenditure A/c is important for

Non-Trading Concerns to know the actual
financial position of current year.
 It covers all the revenue incomes (received
and receivable) and revenue expenses( paid
and payable)

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Preparation of Income & Expenditure A/c
from list of balance.

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Example(1) :

A war charity received for the year ended 31st Dec

1965, Rs1,36,960 in donations and interest on
investments Rs.2,000. The expenses of
Administration amounted to Rs.39,460 of which
Rs.15,980 represented the cost of making appeals
for funds

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Problem contd.

The expenditure on relief amounted to Rs 53,120

and on loans to ex-servicemen to Rs 7,200. The
latter were not regarded as recoverable but it was
decided to carry forward40% of loans in the hope
that they might eventually be recovered.

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Problem Contd.

At the commencement of the year, the charity held

Rs 8,000 in 2 ½% War Loan which cost Rs.79,870
and the balance at bank on the same date amounted
to Rs 4,100.
You are required to prepare Income & Expenditure
A/c.

CCP302.69 7
Solution:
Income & Expenditure A/c of War Charity for the year
ending Dec 31,1965.

Expenditure Rs Income Rs

Administrative expenses Charity 1,36,960

(Rs39,460 - 15,980) 23,480
Cost on Appeals 15,980 Interest on 2,000
Relief expenses 53,120 Investments
Loans-written off
(60 / 100 x 7200) 4,320
Excess of income
over expenditure 42,060

Rs 1,38,960 Rs. 1,38,960

CCP302.69 8
Assignment

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(1) Prepare Income & Expenditure of Alpha Social Club
from its Receipts and Payments for the year 1970
Receipts Rs Payments Rs

Opening balance 75 Rent & Expenses Salary 204

Arrears of subscription 11 Cost of show 25
Subscription 164 Cost of Club day 15
(Current year) 21 Owing for Charity 10
Show tickets sold 14 Show Ticket 5
Club day collections 235 Owing for Donation 7
Refreshments sold for building
17 170
Receipts from games Refreshment bought
19 15
Donations for building Stock for refreshment 8
Subscription owing 35
Cost of furniture 62
Closing balance
556 556
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Excess income =55
(1) Prepare income and Expenditure A/c from the
following Trail balance of Vizag club for the year
31-12-1968

Depreciation on Furniture 10% ; Billiards, Tables &

Accessories by 20%; China glass etc by 33 1/3%.
Of the subscriptions Rs 400 is paid in advance
and Rs 250 is in arrears. Rs 300 is owing for
salaries to staff.

CCP302.69 11
Debit Balances Rs Credit Balances Rs

Furniture 2,500 Members subscriptions 10,560

Billiards tables
& Accessories 1,250 Sundry Receipts 1,743
China glass,
Cutlery etc. 333 Sale of tickets 3,234
Repairs 74 Sundry creditors 2,600
Salaries & Wages 2,262 Entrance fees 448
Rent & Telephone 3,194 Income & Expenditure A/c
Fan & light 1,618 Balance 4,000
Cost of
Entertainment 2,190
Sundry expenses 1,600
Cost of Annual
Dinner 760
Sundry Debtors 1,170
Cash at bank 4,800 Ans:-Excess of Income Rs.2,566
Cash at hand 174
CCP302.69 12
• How would you show the following items relating
to subscriptions in the Income and Expenditure
A/c for the year ending 31st Dec,1976.

Subscriptions received during 1976 Rs 7,170

Subscriptions outstanding at the end of 1975 Rs 600
Subscriptions received in advance on 31st Dec, 1975 Rs 450
Subscriptions received in advance on 31st Dec, 1976 Rs 270
Subscriptions outstanding on 31st Dec,1976 Rs 750
(including Rs 250 for 1975)

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 QUIZ

(1) Opening Cash balance & closing Cash

Balance appears in Income & Expenditure A/c.
(a) True
(b) False

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(1) Salaries paid Rs 25,000 for 1984. Unpaid
salaries on 31-12-1983 are Rs.1000 and on 31-12-
1984 are RS.1,500. How much amount will be
posted to Income & Expenditure A/c under
salaries head
(a) Rs.24,500
(b) Rs.25,000
(c) Rs. 26,000
(d) RS. 26,500

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Frequently asked questions

1) Solve the problems from your prescribed text book.

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