DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : J. SATYANARAYANA RAO
Destination : SENIOR LECTURER
Branch : Commercial and Computer Practice
Institute : Govt. Polytechnic for Women,
Guntur
Subject : Accountancy II
Subject Code : CCP 302
Topic : Non – Trading Concerns
Duration : 50 Min
Sub Topic : Preparation of Current year’s
Balance Sheet
Teaching Aids : PPT - Animation
CCP302.75 1
Objectives :

On completion of this topic, you would be able to:

 Solve the problems of Non – Trading

concerns and
 Prepare Balance Sheet

CCP302.75 2
Recap :
Meaning of Balance Sheet:
 a sheet of balances of a ledger account which
are open ever after the preparation of income
and expenditure account
 In the case of Non trading concerns the excess
of total assets over outside liabilities is known as
capital fund,
 made up of surplus of income over expenditure
and certain items, which are capitalized

CCP302.75 3
 excess of income over expenditure is added to
the opening capital in Balance Sheet
 and the excess of expenditure over the income is
deducted from the opening capital fund
 It is only a financial statement and not an
account. It has no debit side or credit side,
 the heading of the two sides are assets and
liabilities.
 The right hand side of a balances sheet is
called asset side
 The left hand side is called liabilities side
 The assets and liabilities can be shown either in
the order of liquidity or in the order of
permanency
CCP302.75 4
Receipts and Payments Account for the Year ended 31st Dec 2002

1-1-1995 To Balance b/d Rs. 31-12-1995 By Salaries 41,600

20,500
31-12-1995 By Stationary 8,000
To Subscriptions
1996 1,600 By Rates 12,000
1995 42,200
1994 800 44,600
Sport Meet Profit 31,000 By Telephone 2,000
To Dividends on 20,000 By Investment
Investments
By (on Rs.25,000 4%
25,000
Stock at par) 18,500
Sundry Exp. 9,000
1,16,100 For 1998 Balance50 c/d 1,16,100
1-1-1996 To Balance b/d 9,000 For 1999 400 450

CCP302.75 5
Additional information
 There are 450 members each paying an annual
subscription of Rs.100 Rs.900 being in arrears for 1994
at the beginning of 1995
 Stock of Stationery on 31st December,1994 was
Rs.4,000; at 31st December 1995 Rs.1,800
 At 31st December,1995, the rates were prepaid to the
following 31st march, the yearly charges being Rs.12,000.
A quarters charge for telephone is outstanding, the
amount accrued being Rs.700. Expenses accruing at 31st
December, 1994 Rs.1,400

CCP302.75 6
 Additional information contd.

 On 31st December, 1999 the Building stood in the

books at Rs.2,00,000 and it is required to write off
depreciation @ 5% p.a. Investments at 31st
December,1994 were Rs. 4,00,000
 You are required to prepare an Income And
Expenditure Account for the year ended 31st Dec.
2000 and a Balance Sheet as on at that date

CCP302.75 7
Solution
Receipts and Payments Account for the year ended 31stDec. 2002)
Particulars Amount Particulars Amount
Rs.
Rs.
To Salaries 41,600 By Subscriptions 45,000
To Stationary 8,000 By Sport Marking 21,000
Add: Opening Stock 4,000 Profit 20,000
12,000
Less: Closing Stock 1,800 10,200 By Dividend on Investment
To Rates 12,000
Less: Prepaid 3,000 9,000
To Telephone 2,000
Add: Outstanding
(1995) 700 2,700
To Sundry Exp. 18,500
Expenses Outstanding
(1994) 1,400 17,100
To Depreciation on Building
10,000
To Excess of Income over
Expenditure 5,400
96,000 96,000
CCP302.75 8
 Balance Sheet as on 31-12-2002)

Liabilities Amount Assets Amount

Rs.
Rs.
Capital Fund 6,24,000 Building 2,00,000 1,90,000
Excess of Income over Less: Depreciation 10,000
Expenditure 5,400 6,29,400 Investments 4,00,000
Outstanding Telephone 700 Addition during the year
25,000 4,25,000
Subscription in Advance 1,600 Subscription Outstanding
1994 100
1995 2,800 2,900
Stationary 1,800
Prepaid Rates 3,000
Cash 9,000
6,31,700 6,31,700

CCP302.75 9
 Subscriptions Account
Dr. Cr.
Particulars Amount Particulars Amount
Rs. Rs.
1999 1998 By Cash Subscription 44,600
Jan 1 To Balance b/d 900 Dec 1 received during the year
Dec 31 To Income and Exp. 45,000 Dec 31 By Balance c/d
A/c transfer ------Subs. due
To Balance b/d 1,600 1994 100
received in advance 1995 2,800 2,900
47,500 47,500
1998 To Balance b/d 2,900 1998
Jan 1 Jan 1 By Balance c/d 1,600

CCP302.75 10
 Balance Sheet as on 31-12-1997)

Liabilities Amount Assets Amount

Rs. Rs.
Capital Fund 6,24,000 Building 2,00,000
(Balancing Fig)
Investments 4,00,000
Express 1,400 Subscription 900
Outstanding Outstanding
Stationary 4,000
Cash 20,500
6,25,400 6,25,400

CCP302.75 11
Problem

CCP302.75 12
 Receipts and Payments of Gurajada Cultural Society for the year
ended 31st December, 1999

Date Receipts Amount Date Payments Amount

Rs. Rs.

Jan 1 To Cash in hand 1,500 Jan 1 By Bank Overdraft 3,100

Dec 31 To Subscription By Investments in 3,000
Securities
1998 200 By Furniture 1,450
1999 16,200 By Salary 6,200
2000 250 16,650 By Printing & Stationery 890

To Entertainment 2,000 By Entertainment Exp. 1,710

Proceeds
Entrance Fee 670 By Sundry Exp. 1,420

Interest on 480
Securities
To Sale of Old 120 By Balance on 31-12-99
Chairs (Book Value Cash 550
Nil) Bank 3,100
21,420 21,420

CCP302.75 13
You are required to prepare income and
Expenditure account of the society for the year
ended 31st December 1999 and balance sheet as
on that date after considering the following.
• The society has 1800, members each paying
annual fees of Rs.10. Subscriptions
amounting to Rs.90 were still in arrears for
the year 1998.
• Stock of stationery on 31st December 1998
was Rs.125 and on 31-12-1999 was Rs.87.

CCP302.75 14
3. Entrance fees are to be capitalized.
• Salary of Rs.550 for December, 1999 is
Outstanding; Expenses accrued on 31st
December, 1998 were Rs.132. The society
has paid Rs.500 n 1998 for telephone
charges out of which Rs.125 related to the
year 1999.
5. On 31st December,1998 premises stood in the
books at Rs.24,500 and investment at
Rs.6,500
6. Depreciate fixed assets by 5%

CCP302.75 15
Solution

CCP302.75 16
 Income and Expenditure A/c
(for the year ended 31st December,1999)
Expenditure Amount Income Amount
Rs. Rs.

To Salaries 6,200 By Subscriptions 16,200

Add: O/S 550 6,750 Add: O/S 31st Dec.99 1,800 18,000
To Printing & Stationery 45,000 By Entertainment
on 1-1-99 125 Proceedings 2,000
Add: Admission 890
-----------
1,015
Less: Stock on 31-12-99 87 928 By Interest on Securities 480
To Entertainment Expenses 1,710 By Profit on Sale of furniture 120
To Sundry Expenses 1,420
Less: Payment for 1998 132 1,288
To Telephone Charges 125
To Depreciation on:
Premises 1,225
Furniture 73 1,298
To Excess of Income over 8,501
Expenditure
20,600 20,600

CCP302.75 17
 Balance Sheet of Gurajada Cultural Society
as on 31st December
Liabilities Amount Assets Amount
Rs. Rs.
Subscriptions Received 250 Cash in Hand 550
in advance
O/S Salaries 550 Cash at Bank 3,100
Capital Fund 29,808 Stock of Stationery 87
Add: Entrance Fees 670 Furniture 1,450
Add: Excess of Income 8,501 38,979 Less: Depreciation 73 1,337

Investments 6,500

Subscriptions O/S
For 1998 90
For 1999 1,800 1,890
Premises 24,500
Less: Depreciation 1,225 23,275

39,779 39,779

CCP302.75 18
Assignment

CCP302.75 19
 Assignment
From the following Trial Balance of City club of Vijayanagaram, prepare
Income & Expenditure A/C & Balance sheet
Dr. Cr.
Rs. Rs.
Annual Subscriptions 15,000
Entrance Fees 5,000
Sale of Tickets of Entertainment 3,000
Interest on Investments 400
Printing & Stationery 7,200
Repairs 2,300
Cost of Entertainments 1,400
Sale of Tickets for annual Dinner 1,750
News Papers 1,500
Hire of Hall 3,500 Contd…

CCP302.75 20
Assignment Contd…
Profit on sale of Liquor 2,350
Interest on Bank Deposit 500
Receipts from Billiards 4,500
Sundry Creditors 2,800
Rent and Rates 2,250
Salaries 4,750
Cost of Annual Dinner 1,300
Audit Fees 400
Cash in Hand 600

CCP302.75 21
Assignment Contd…
Cash at Bank 4,500
Fixed Deposit 10,000
Investments 9,000
Library Books 6,200
Furniture 9,500
Stock of Liquor 30.6.01 4,200
65,100 65,100
Of the subscriptions Rs. 400 is paid in advance
and there is also Rs.350 in arrears. Depreciate
Library books, furniture at 10%, stock of
stationery 30.6.01 Rs.1800; Salaries to staff
has accrued due Rs.450

(Excess of Income over Expenditure Rs.9,630,

Balance Sheet total Rs. 44,580)
CCP302.75 22
Quiz :
1. Subscriptions in arrears (given in adjustments)
are shown on the
a) Credit side of Income and Expenditure A/c
and Assets side of Balance sheet
b) Debit side of Income & Expenditure A/c and
liabilities side of Balance sheet
c) Only on the Assets side of the Balance
Sheet
d) Only on the Liabilities side of the Balance
Sheet

CCP302.75 23
2. Donations received for a specific purpose
a) Should be credited to a separate A/c and
shown on the liabilities side of the Balance
sheet
b) Should be credited to Income & Expenditure
A/c
c) Should no be recorded at all
d) None of the above

CCP302.75 24
3. Entrance fee income should be
a) Capitalised
b) Treated as Revenue
c) Treated as Revenue unless the amount is
pretty large
d) Treated as Liability

CCP302.75 25
4. If there is prize fund, then prizes awarded,
expenses & Income are transferred to
 Income & Expenditure A/c
 Assets side of the Balance Sheet
 The Liabilities side of Balance Sheet
 Both Income & Expenditure A/c and to
Balance Sheet

CCP302.75 26
For practice Refer

Advanced Accounting
- by R.L. Gupta
- M. Radhaswamy
Accountancy
- by Dr. Sm. Shukla
Financial Accountin
- by P.C.Tulsian
Accountancy
- by S.P. Jain & Narang

CCP302.75 27