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DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH

Name : J.SATYANARAYANA RAO


Designation : Senior Lecturer
Branch : Commercial & computer Practice
Institution : Govt.Polytechnic for women,Guntur.
Year/Semester : III Semester
Subject : ACCOUNTANCY II
Subject Code : CCP-302
Topic : NON-TRADING CONCERNS
Duration : 100 Minutes
Sub Topic : Preparation of Balance sheet-previous year
for Capital Fund.
Teaching Aids : PPT, Animation
CCP302.71 TO 72 1
Objectives

On completion of this period, you will be able to


 Prepare the balance sheet for non trading
concerns
 Prepare the previous year balance sheet from
the points given in the problem to ascertain
capital fund

CCP302.71 TO 72 2
Recap

1. What is balance sheet in sole trade concern ?


2. How is it prepared ?
3. What is capital in sole trading concern ?
4. Who brought the capital?

CCP302.71 TO 72 3
Balance sheet of non-trading concerns

 The balance sheet is prepared by non trading


concerns in usual manner like trading concerns
 The income and expenditure account is
accompanied by the balance sheet
 The balance sheet covers all those items such as
property, assets, liabilities and capital fund

CCP302.71 TO 72 4
Balance sheet of non-trading concerns
contd.

 All capital receipts and capital payments will be


shown in the balance sheet
 In the balance sheet the assets are shown on
right hand side (assets side)
 Liabilities and capital fund are shown on the left
hand side (liabilities side)

CCP302.71 TO 72 5
In the year of commencement of a Non-
Trading concern:

 There will not be capital fund


 Donation of this specified capital receipt should be
taken as capital income and must be shown on
liabilities side

CCP302.71 TO 72 6
Illustration

(1) Star sports club started organization on 1-1-70.


Their Receipts and Payments account for the
period ending 31st December 1970 is given below

CCP302.71 TO 72 7
Receipts and payments A/c
Receipts Rs Payments Rs
To Donations 50000 By building 40000
To life member fee 1500 By tournament exp 900
To entrance fee 2500 By furniture 2100
To tournament fund To 10000 By salaries 1800
subscriptions 3200 By exp. Or cricket 1140
(including Rs 100 for By insurance 360
1971)
200 By gardening 170
To interest
900 By printing 80
To other match
receipts By postage 200
To sundry receipts 100 By sundries 150
By investments 18000
By cash balance 3500
68400 68400
CCP302.71 TO 72 8
Adjustments
 Subscription for 1970 amounting to Rs 300 were
outstanding
 Unpaid salaries for 1970 were Rs. 170/-
 Rs.200/- is the amount of interest accrued on
investment
 You are required to prepare the income and
expenditure account and balance sheet

CCP302.71 TO 72 9
Solution Income and expenditure A/c
for the year ending 31st Dec. 1970

Rs Rs
To salaries 1800 By subscriptions 3200
Add outstanding 170 1970 Less received in
To insurance 360 advance 100
Less prepaid 180 180 3100
To postage 200 Add outstanding 300 3400
To printing 80 By other match receipts 900
To sundries 150 By interest 200
To gardening 170 By sundry receipts 100
To cricket expenses 1140 By interest on 200
investments
To excess of income
over expenditure 3140 By entrance fees 2500
7300 7300

CCP302.71 TO 72 10
Balance sheet of star sports club as on 31-12-1970
Liabilities Rs Payments Rs

Donations 50000 Cash 40000


life member fee 1500 Investments 900
Tournament fund 2500 Buildings 2100
Less :Expenses 10000 Furniture 1800
Out standing Salaries 3200 Subscription out 1140
Subscription received in standing 360
advance 200 Prepaid insurance 170
Excess of income over 900 Interests on 80
expenditure investments accrued 200
100 150
18000
3500

68400 68400

CCP302.71 TO 72 11
Capital fund

 In fact there is no capital for non trading concerns


since it is non profit organization
 Special funds collected from the public and charity
for running the organization is called capital fund

CCP302.71 TO 72 12
Calculation of capital fund

 If capital at the beginning is not given it should be


found by deducting liabilities from assets
 Assets given at the beginning of this year are to be
treated as assets of last year and posted on assets
side
 Revenue incomes such as interest receivable,
subscriptions receivable for the last year (received
during this year) are the assets of the last year. Post
them on assets side

CCP302.71 TO 72 13
 Liabilities given at the beginning of this year, are
treated as liabilities of the last year. post them on
liabilities side
 Out standing salaries, out standing rents etc. of the
previous year (paid in current year) are liabilities of
previous year. Post them on liabilities side
 Identify all such items and find the balance
 The balance is capital fund

CCP302.71 TO 72 14
(2) From the following receipts and payments
account of Jupiter club prepare Income and
Expenditure account for the year ended 31st Dec
1999 and Balance Sheet as on that date

CCP302.71 TO 72 15
Receipts & payments a/c of Jupiter Club
for the year ending 31st Dec. 1999
Receipts Rs Payments Rs

To balance (as on 1-1-99)cash By crockery purchased 530


current account 704 By maintenance 1364
Fixed deposited @ 6% 5476 By match expenses 2648
Dec 31st 6000 By conveyance 164
To subscription (including By up keep lawns 848
Rs.1200/- for1998) 8000 By purchase of cricket goods
To entrance fee By investments 1944
To donation 550 By salaries 1140
To interest on fixed deposited 1002 By postage stamps 2200
To tournament fund 180 By sundries 210
To sale of crockery (book value 4000 By tournament exp 400
Rs.240/-)
400 By balance Cash 3760
Current a/c 440
Fixed deposit 4664
6000
26312 26312
CCP302.71 TO 72 16
Additional information
 Monthly salary is Rs.200/-
 Value of in used postal stamps
 Dec 31st 1998 ____150
 Dec 31st 1999____ 180
 Stock of cricket equipment
 Dec 31st 1999__642
 Dec 31st 1999__560
 Arrears of subscription
 1998 Rs.1320
 199 Rs.1600
CCP302.71 TO 72 17
Income & expenditure account of Jupiter
For the year ending 31st Dec. 1999
Expenditure Rs Income Rs

To maintenance 1364 By subscription 8000


To match expenses 2645 Less last year 1200
To conveyance’ 164 6800
To up keep lawn 848 add out standing 1600 8400
To salaries 2200 2400 By entrance fee 550
Add out standing 200 By interest on fixed deposits
To postage stamps 210 180
Add opening balance 150 Add out standing 180 360
360 ]by profit on sale of
Less closing balance 180 crockery
180 160
To sundries
400
To cricket equipment 1944
Add opening balance 642
2586
Less closing balance 560
Ro excess of income 2026
over expenditure 442

10472 10472

CCP302.71 TO 72 18
Balance sheet of Jupiter Club as on 31st Dec 1998

Liabilities Rs Assets Rs
Capital fund 14532 Cash 704
(Balancing figure) Bank’ 5476
Fixed deposited 6000
Subscription 1320
Postage stamps 150
Cricket equipment 642
Crockery 240

14532 14532

CCP302.71 TO 72 19
Balance sheet as on 31st Dec 1999
Liabilities Rs Assets Rs
Salary out standing 200 Cash 440
Tournament fund 4000 Bank 4664
Less expenses 3760 240 Fixed deposits 6000
Capital fund 14532 Investments 1140
Add excess of Postage stamps 180
income over cricket equipment 560
Expenditure 442 14974 Crockery 530
Subscriptions
1998—120 1720
1999---1600 180
deposit
15414 15414
CCP302.71 TO 72 20
Summary
 When the capital fund is not given in the problem it
should be asserting
 To find out the capital fund the formula is
 Assets – liabilities
 The balance is capital fund
 Balance sheet is prepared by non trading concerns also
 I come and expenditure account is accompanied by the
balance sheet
 It is similar to balance sheet prepared in sole trading
concerns
CCP302.71 TO 72 21
Assignment

 Solve the problems from the old question papers


and from the prescribed text book

CCP302.71 TO 72 22

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