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EDUCATION :: AP
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 I & E A/c from
R & P a/c Problems - I
Teaching Aids : PPT ANIMATIONS
CCP302.66 1
Objectives
CCP302.66 2
Known to unknown
CCP302.66 3
Recap of Income and Expenditure account:
It is similar to Profit and Loss account. It covers all
revenue expenses (paid as well as payable) and all
revenue incomes (received as well as receivable) during a
current year
CCP302.66 4
Preparation of Income and Expenditure a/c
from Receipts and Payments a/c:
CCP302.66 5
Example (1):
subscription for the current year not yet received Rs.1,000. Find
out the Subscriptions for the current year.
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Working Notes
Subscriptions Received 25,300
Less: Sub. Received in advance 1,450
23,850
Add: Outstanding Sub. 1,000
Subscriptions for the current year 24,850
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Example2:
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Working Notes:
Salaries paid in 2007 9,600
Less Salaries of 2006 700
8,900
Add: Unpaid salaries 900
Salaries of the current year 9,800
CCP302.66 10
Example 3:
From the following Receipts and Payments a/c of the Union club for
the year ending 31st Dec, 2000 ,Prepare Income and Expenditure a/c Receipts
and Payments a/c for the year ending 31-12-2000
Rs. Rs.
To balance b/d (1-1-2000) 400 By upkeep of grounds (A) 4000
To subscriptions 7,200 By wages of Grounds
To entrance fees 460 men 4,500
Additional Information:
(A) This item includes Rs.500 applicable to previous year
CCP302.66 12
Solutions & Notes:
CCP302.66 13
Income and Expenditure Account For the year ending 31st December, 2000
CCP302.66 14
Assignment
1)The following is R/P a/c of Lucky Club for the year ended 31/12/2000
Receipts and Payments a/c for the year ended 31-12-1977
Rs. Rs.
To Balance(1-1-77) 745 By Upkeep of Grounds (b) 4,750
To Subscriptions (a) … 6,800 By Wages of Grounds
To Entrance Fees … men 4,680
To Interest … … 260 By Ground Rent
To Proceeds from 420 By printing & Stationery 105
Lecturers, Concerts 2,590 © 465
By postage
By Balance (31-12-77) 95
720
10,815 10,815
CCP302.66 15
Problem Contd.
Additional Information
• This item includes Rs.100 applicable to the previous
year
(b) This item includes Rs.250 applicable to the previous year.
(C) This item includes Rs.100 applicable to the next year.
Entrance Fees are to be capitalised. The outstanding items
as on 31-12-1977 are:
Printing & Stationery Rs.80. The Social Literary Association
owed Rs.105 for the use of Club’s Hall.
CCP302.66 17
Problem Contd
Additional Information
It was decided to treat one-half of Entrance Fee and Donations as
income. Outstanding Salary and Rent were Rs.200 and Rs.100
respectively. Subscriptions outstanding for the year 1979 amounted
to Rs.300.
Hints: 1. Sale of old furniture is not a revenue income and
should not be taken in Income & Expenditure a/c.
2. The items Investment, Furniture and Advance for
purchase of Building are Capital items and should not be taken in
I/E A/c
Ans. Excess of Income Rs.5,650/-
CCP302.66 18
3. The following is the Receipts and Payments Account of the India Club for
the year ending 31-12-1979:
Receipts and Payments Account for the year ended 31-12-79
Rs. Rs.
To Balance 1-1-1979 500 By up-keep of Grounds 4,800
To Subscriptions 6,800 (a)
To Entrance Fees 260 By Wages of 4,600
Groundsmen
To Interest for 400
Investments By Ground Rent
100
To Proceeds from By Printing (b)
2,500 500
Lectures By Postage
160
By Balance c/d
300
10,460 10,460
CCP302.66 19
Problem Contd.
Additional Information
(c) This item includes Rs.300 applicable to previous year.
(d) This item includes Rs.100 applicable to the previous year.
Entrance fees to be capitalised. The outstanding items as on 31-12-
1979 are: Printing Rs.200 and Wages of Groundsmen Rs.100.
CCP302.66 20
4) From the following Receipts and Payments account of Alagappa Social Club
& further information supplied, prepare an Income and Expenditure account for
the year ended Dec.31, 1973.
Receipts and Payments Account
1973 Rs. Rs.
Jan.1 To Opening Balance By Buildings 15,000
Cash at Bank 1,000 By Rent 700
Cash in hand 100 1,100 By Furniture 1,500
Dec.31 To Donations 20,000 By Salaries 600
To Life Members fees 4,000 By Cricket 200
To Subscriptions 1,800 By Tennis 500
To Interest on Investments 50 By Gardening 100
To Cricket 150 By Printing 50
To Tennis 400 By Telephone 175
To Playing Cards 300 By Advertisement 100
To Sundries 100 By Playing Cards 200
To Sale of Old newspapers 125 By Investments 8,000
By Balance
900
28,025 28,025
CCP302.66 21
Problem Contd.
Outstanding amounts were:
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5) From the following prepare an Income and Expenditure
Account for the year ended 31st March, 1972.
CCP302.66 24
Summary contd.
Income and expenditure of the current year is taken into
consideration
Income and expenditure relating to the preceding or
succeeding periods are excluded
All adjustments relating to prepaid or outstanding expenses
and incomes, provision for depreciation or doubtful debts
will be made
The closing balance is either surplus (i.e. excess income or
expenditure) or deficit (i.e. excess of expenditure over
income)
CCP302.66 25
Quiz
(a) True
(b) False
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Quiz
(1) All incomes will appear on the credit side and all
expenditure on the debit side of Income and
Expenditure account.
(a) True
(b) False
CCP302.66 27
Assignment
CCP302.66 28