FOREIGN CURRENCY

CONVERSION [AS PER AS 11]

FOREIGN BRANCHES

THEORY AND ILLUsTRATIONS

OUTLINE
No. Topic Page
1. Conversion of Foreign Branch Trial Balance
2. Illustrations on Foreign Branches
2.1 Integral V/s Non-Integral
2.2 Foreign Branch of Indian H.O.
2.3 Indian Branch of Foreign H.O.
3. Foreign Operations: Provisions of AS 11 [Revised 2003] 16
3.1 Scope
3.2 Definitions [Para 2]
3.3 Classification of Foreign Operations
3.4 Financial Statements of Integral Foreign Operations
3.5 Financial Statements of Non-Integral Foreign Operations
3.6 Disposal of a Non-Integral Foreign Operation
3.7 Change in the Classification of a Foreign Operation
3.8 Disclosure
3.9 Transitional Provisions
4. Integral V/S Non-Integral Foreign Operations 20

1. CONVERSION OF FOREIGN BRANCH TRIAL BALANCE

We will be studying a substantial part of Accounting Standard 11 in B.A.F. Semester VI, Financial
Accounting- VI, Chapter [Link] willnow be studying the remaining provisions ofAS 1I regarding
Foreign Branches/Subsidiaries, in this chapter.

Foreign Branches
Foreign branches generally maintain independent and complete record of business transacted by
them in currency ofthe country in which they operate. Thus problems ofconversion oftrial balance
offoreign branches relate mainly to translation offoreign currency into Indian rupees. For the purpose
of accounting, AS 11 classifies the foreign branches into two types: (a) Integral Foreign Operation
i.e. a 'dependent' branch; or (b) Non- Integral Foreign Operation i.e. an
'independent' branch (see
Para 3).
 (M. Com. Part-l1: SEM.J
Advanced Financial Accounting
2
Branch[Integral Foreign Operation(IFO)]
(2) Dependent foreign branch/operation, the activities of which are an integral partronoftho
nndent Branch is a extension ofthe
The business IFO1s
on
of
ifit
carricd
as
were an
currency, i.e of'the
ofthe reporting enterprise.
Generally, IFO carrics
on
business in a single foreign
enterprise's operations. ot gOods imported from the H.O. and remits the
located. Thus, it makes sale
cOuntry where it is
to the HO
in the s a m e currency
procccds
Foreign Operation (NFO)]
(3) Independent Branch [Non-integral that is not an Integral Foreign Operation Tho
Branch' is a foreign branch/operation
Independent
on in a substantially independent
way by accumulating cash and other
NFO is carried
business ofa income and arranging borrowing
in its local currency
expenses, generating
monetary items, incurring transactions in the reporting
enter into transactions
in foreign currencies, including
An NFO may also in a foreign currency out ofthe resources available
may be production
currency. An example of NFO
H.O.
in such country independent ofthe
Techniques for Conversion of Foreign
Currency Items
(4)
Operation IFO]1
. Dependent Branch |Integral Foreign
currency translation
Following are the steps for foreign
Translation of Transactions during year
All transactions of IFO be translated at the rate
:
(1) transaction entered
prevailing the date oftransaction.
on This will date-wise details
require of the
by that branch together with the rates. Weekly or monthly average rate is permitted if there are no
signiticant variations in the rate.
(2) Translation atthe balance sheet date:
items are money held and assets and
Monetary itemsare converted at closing rate. Monetary
(i) liabilities to be received or paid in fixed or determinable amounts of money. Cash, receivables
and payables are examples of monetary items.
than items. Fixed
assets,
Non-monetary items are assets and liabilities other
(ii) investments monetary
in equity shares, inventories are examples of non-monetary assets. The cost and

depreciation of the tangible fixed assets is translated using the exchange rate at the date of
purchase of the asset if asset is carried at cost. If tangible fixed asset is carried at fair value,
translation should be done using the rate existed on the date ofthe valuation.

(iii) The cost of inventories is translated at the exchange rates that existed when the cost of
inventory was incurred and realizable value is translated applying exchange rate when realizable
value is determined which is generally the closing rate.
(iv)Exchange difference (which is a balancing figure in the converted trial balance) arising on
the translation of the financial statement of integral foreign operation should be charged to
profit and loss account.
2. Independent Branch [Non-Integral Foreign Operation]
Trial Balance of Independent Branch (non-integral foreign operation) is converted using the
following principles:
(i) Balance sheet items i.e. Assets and Liabilities both monetary and non-monetary are converted at
the closing exchange rate.
i) Items of income and expenses are converted at the actual exchange rates on the date of
transactions. However, accounting standard allows average rate subject to materiality
(i) Resulting exchange rate difference should be accumulated in a "foreign curreney translation
reserve" until the disposal of "net investment in non-integral
foreign operation".
 Foreign Curreney Comversion [As PerAS 111- Foreign Branches

2. ILLUSTRATIONS ON FOREIGN BRANCHES

|2.1 INTEGRAL VIS NON-INTEGRAL

llustration 1:(Converting Trial Balance for Ascertaining FE Gain/Loss : Integral Operations)
ILtd. has a branch in Sydney, Australia. At the end of 31st March, 2013 the following ledger balances
have been extracted from the books of the Sydney office

Sydney (Australia Dollars thousand)

Particulars
Dr. A$ Cr. A$ Particulars Dr. A $ Cr. A $
Plant & Machinery (Cost) 200 Goods Sent to Branch 5
Plant & Machinery 130 Wages and Salaries 45
Debtors/Creditors 60 30 Rent 12
Stock (1-4-2012) 20 Office Expenses 18
Cash/Bank Balances 10 Commission Receipts 100
Purchases/Sales 20 123 Branch/H.O. Current A/c 7
390 390
The following information is also available
Goods sent by H.O. 7 100 thousand. Branch A/c in H.O. 7 120 thousand.
Stock at 31-3-2013, Sydney Branch Australian $ 3,125. You are required to convert the Branch Trial
Balance into rupeeS
(Use the following rate of exchange Opening Rate A $ = 7 20; Closing Rate A$ = { 24; Average
Rate A $ ={ 22; For Fixed Assets A $ F
18)=

Ascertain the exchange loss or gain,

according to AS 11 (Revised 2003) assuming that the branch
operations are integral to the main operations (i.e. it is a "dependent" branch).
Solution
(Oct. 09, adapted)
As per AS-11 (Revised 2003), the Sydney Branch Trial Balance is to be converted as under.
Sydney Branch Trial Balance as on 31-3-2013
000)
Particulars Dr. A $ Cr. A $ Conversion Dr. Cr.
Rate Per$
Plant and Machinery (Cost) 200 18 ,600
Plant and Machinery Dep./Res. 130 18 2,340
Debtors/Creditors 60 30 T 24 1,440 720
Opening Stock 20 R20 400
Cash and Bank Balances 10 T24 240
Purchases/Sales 20 123 22 440
Goods Received from H.O. 2,706
100
Wages and SalariesS 45 7 22 990
Rent 12 22 264
Office Expenses 18 22 396
Commission Receipts 100 22
H.O. Current Account 2,200
120
Exchange Loss (Bal. Fig.) 7,870| 8,086
(Dr. to P& LA/c) 216

8,086| 8,086
As per AS-11 (Revised 2003), the exchange loss in of
be written off in
case an integrated foreign operation should
profit and loss for the year.
llustration 2: (Non-integral)
Assume, in Illustration 1 above, that the Sydney branch is an "independent" branch i.e. its operations
are non-integral in nature.
Solution:
Branch Trial Balance is to be
non-integral, the Sydney verted as
conund..
are
In case the operations
under
Sydney Branch Trlal Balance as on 31-3-2013

Particulars Conversion Dr Cr
Rate Per $ ('000) ('O00)
24 4,800
Plant and Machinery (Cost)
Plant and Machinery Dep./Res. 24 3,120
7 24 1,440 720
Debtors/ Creditors
20 400
Opening Stock
Cash and Bank Balances 24 240
22 440 2,706
Purchases/Sales 100
Goods Received From H.O.
Wages and Salaries 22 990
22 264
Rent
22 396
Office Expenses
Commission Receipts 22 2,200
H. O. Current Account 22 120
9,070 8,866
Exchange Profit (Bal. Fig.) 204
(Credited to Foreign Currency Translation Reserve) 9,070| 9,070
Notes
Thus, when a branch operation is non-integral, () all balance sheet items (e.g. even the Fixed
Assets in above case) are converted at the closing rate; and (i) the exchange difference is transferred
to a Reserve.

2.2 FOREIGN BRANCH OF INDIAN H.O.

lustration 3:
The fim Hardik and Co. with its H.O. in Bhopal has a branch in Sydney. At the end of each year
(December 31) a Trial Balance sent by the branch in Australian dollar currency is converted into
Rupee currency at the head office.
The following Trial Balance for the year has been compiled at the branch as on 31st December,
2013.

Particulars [Link]. S Cr $
Bills Receivable 2,500
Sundry Debtors 3,800
Sundry Creditors 1 ,100
Purchases 13,500
Sales 22,800
Furniture and Fixtures 1,340
Stock (1st January, 2013) 2,000
Establishment Expenses 2,000
Salaries 1,400
Rent, Rates and Taxes 400
Sundry Expenses 1,450
Depreciation on Furniture and Fixtures 128
Remittances to H.O. 1,502
Head Office Account 6,920
Cash on hand and at Bank
800
Total
30,820 30,820
The stock in hand on December 31st 2013 was $ 2,500. The rates of exchange were
From December 31st, 2012 to June 30th, 2013 1$ =7 34.
From 1st July, 2013 to 31st December, 2013 1$ 7 36. =

In the Bhopal books the balance of the

Sydney Branch Account and of the remittances from Sydney
Branch Account appear as 1,78,847 and 37,068
respectively. The original Furniture and Fixture
 Foreign Currency Conversion [As Per AS 11/- Foreign Branches

were bought when the rate of exchange was $1 =7 30. Convert the above Trial Balance into
currency and prepare the final accounts of the branch. Rupees
(Aprl 2012, adapted)
Solution
Converted Trial Balance as on 31st December, 2013
Particulars Rate Dr.($) Cr. (5) Dr. ( Cr (
B/R 6 2,500 90,000
Sundry Debtors 36 3,800
Sundry Creditors 1,36,800|
36 1,100 39,600
Purchases 35 13,500
Sales
4,72,500
35 22,800 -7,98,0oo
Furniture and Fittings 30 1,340 40,200
Stock (1-1-2013) 34 2,000 68,000
Establishment Exp. 35 2,000| 70,000
Salaries 35 1,400 49,000
Rent, Rates and Taxes 35 400 14,000
Sundry Expenses 35 1,450 50,750
Depreciation on furniture and fixtures 30 128 3,840
Remittance to HO Given 1,502 37,068
Head Office A/c Given 6,920 1,78,847
Cash on hand at Bank 36 800 28,800
30,820 30,820 10,60,958 10,16,447
Difference in Exchange (Bal. Fig.) 44,511
10,60,958 |10,60,958
Dr. Branch Trading A/c for the year ended 31-12-2013 Cr.
Particulars Amt. (7 Particulars
To Stock
Amt.(
68,000 By Sales 7,98,000
To Purchases 4,72,500 By Closing Stock (2,500 x 36)
To G.P. c/d
90,000
3,47,500
8,88,000 8,88,000
Dr. Profit and Loss A/c for the year ended 31-03-2013
Cr.

Particulars Amt. ( Particulars Amt. (

To Salaries 49,000 By G.P. b/d
To Establishment Expenses
3,47,500
70,000 By Exchange Difference 44,511
To Rent, Rates and Taxes 14,000
To Sundry Expenses 50,750
To Depreciation 3,840
To Net Profit c/d 2,04,421
3,92,011 3,92,011
Balance Sheet as on 31-03-2013

Liabilities Assets
Creditors 39,600| Furniture
H.O. A/c 40,200
1,78,847 B/R 90,000
Less: Remittance 37.0698 Sundry Debtors 1,36,800
1,41,779 Cash at Bank 28,800
Add Net Profit 2,04,421 3,46,200 Closing Stock 90,000
3,85,800 L 3,85,800
llustration 4
XY Enterprises has a branch in New York. As on 31st March, 2013, the Trial Balance of the Branch
was as follows
 Advanced Financial Accounting ([Link]. Part-11: SEM-I11

Dr. $ Cr.$
Particulars *
8,500
Head Office Account
61,000
Sales 44,000|
Goods from Head Ofice
8,500
Stock on 1st April 2012
9,000
Furniture 250
Cash in Box
' '*' ' ' ,250
Bank Balance
,800
Salanes
1,200
Rent
150
Insurance
Outstanding Expenses 800
Sundry Debtors
,150
70,300 70,300
The branch account in head office shows debit balance 2,14,500 and goods sent to branch credit
balance of R 13.12,500.
Depreciate Furniture 10% p.a.
Stock at Branch 31st March 2013 was $ 7,500.
Furniture was purchased in 2013 when one $ = 7 20.

Exchange rates were

On 1-4-2012 1S =28
On 31-3-2013 1S =730
Average Rate 1S 7 29
You are required to prepare Branch Trial Balance by converting in Rupees and prepare Branch
Trading and Profit and Loss A/c for the year ended 31-3-2013, and Balance Sheet as on that date.

Solution (Apr. 09, 10, Oct. 11, adapted)

Converted Trial Balance as on 31-03-2013

Particulars Dr. 5 Cr. $ Rate Dr( Cr.(

H.O. A/c 8,500| 2,14,500
Sales 61,000 29 -17,69,000
Goods From H.O. (Given) 44,000 - |13,12,500
Stock (1-4-12) 8,500 28 2,38,000|
Furniture 9,000 20 1,80,000
Cash 250 30 7,500
Bank 1,250 30 37,500
Salaries 2,800 29 81,200
Rent 1,200 29 34,800
Insurance 150 29 4,350
O/S Expense 800 30 24,000
Debtors 3,150 30 94,500
Difference in Exchange (Bal. Fig.) 17,150
70,300 70,300 20,07,500 20,07,500
New York Branch
Trading and Profit and Loss Account for the year ended 31-3-2013

Particulars Particulars
To Opening Stock 2,38,000 By Sales |17,69,000
To Goods from H.O. 13,12,500 By Closing Stock 2,25,000
To Salaries 81,200
To Rent 34,800
To Insurance ,350
To Depreciation 18,000
To Difference in Exchange 17,150
To Net Profit
2,88,000|
|19,94,000 19,94,0000
 Foreign Currency
Conversion [As Per AS 11- Foreign Branches
Balance Sheet as on 31-03-2013

Liabilities Amt.( Assets Amt.(

H.O. A/c 2,14,500 Furniture 1,80,000
Add: N/P 2.88.000 5,02,500 Less: Depreciation
O/S Expenses 24,000 p.a. 10% 18.000 1,62,000
Debtors 94,500
Closing Stock 2,25,000
Cash at Bank 37,500
Cash in Hand 7,500
5,26,500 5,26,500
lustration 5:
Black Coats Enterprises have a branch in Canada. On 31st December, 2013 the Trial Balance ofthe
Branch was as given below:
Dr. £ Cr. £
Particulars
Head Office Account 9,000
Sales * *** *** 81,000
Goods from Head Office A/c *** *** *** **' ***
45,000
Stock 1st January, 2013 ** *** 7,500
Funiture and Fixtures 10,000
Cash in hand 1,050
Cash at Bank **** 950
Owing for Expenses 1,000
Salaries 13,000
Taxes, Insurance, etc. ** *** '* **' '". 250
Rent 1,000
Sundry Debtors 12,250
Total * * *
91,000 91,000
The Branch Account in the Head Office showed a Debit Balance of 1,12,500 and Goods sent to
Branch account a Credit Balance 8,07,500.
Funiture and fixtures are acquired in 1-1-13 £1 = 15.00 provide Depreciation 10% p.a.
The exchange rates were January 1 £1 17.50
December £1 18.50
Average £1 18.00
The stock at branch on 31st December, 2013 was valued at £ 4500.
Prepare Trading Profit and Loss Alc and Balance sheet of Canada Branch Account for the year
ended 31-12-2013. (Apr. 13, Oct. 12, adapted)
Solution:
Converted Trial Balance as on 31-12-2013

Particulars Rate Dr. e

Cr. f Dr. Cr.
H.O. Account Given 9,000 1,12,500
Sales 18.00 81,000 |14,58,000
Goods From H.O. Given 45,000 8,07,500
Stock (Opng.) 17.50 7,500 1,31,250
Furniture 15.00 10,000 1,50,000
Cash 18.50 1,050 19,425
Bank 18.5 950 17,575
O/S Expense 18.50 1,000 18,500
Salaries 18.00 13,000 ,34,000
Taxes and Insurance 18.00 250 ,500
Rent 18.00 1,000 18,000
Debtors 18.50 12,250 2,26,625

Difference in Exchange |16,08,875|15,89,000

19,875
Total 91,000 91,000 16,08,875 16,08,875
 Advanced Financial Aecounting ([Link]. Part-ll: SEM-IIn
8
Account for the year ending 31-12-2013
Trading and Profit and Loss

Particulars
Particulars 1,31,250 Sales 14,58,0000
Opening Stock 8,07,500 Closing Stock 83,250
Goods from H.O.
Gross Profit c/d 6,02,500
15,41,250 15,41,250
2,34,000 Gross Profit b/d 6,02,500
Salaries 4,500 Difference in Exchange 19,875
Taxes and Insurance
Rent
18,000
15,000
Depreciation
3,50,875
Net Profit Tfd. to H.O.
6,22,375Total 6,22,375
Total
31-12-2013
Balance Sheet as on

Assets
Liabilitiess 1,50,000
Furniture
H.O. A/c 1,12,500 (15.000) 1,35,000
Less Depreciation
Add Net Profit 3,50.875| 4,63,375| 2,26,625
18,500 Debtors
O/S Expenses Closing Stock 83,250
17,575
Bank
Cash 19,425

4,81,875
4,81,875
llustration 6 New York. The Branch submits the
Mumbai and Branch at
Excellent Softech has head office at
31st March, 2013.
following Trial Balance as on
Dr. US $ Cr. US $
Particulars 15,300
Head Office A/c 27,140
Goods Received from Head Office 4,45,200 6,80,750
Purchase and Sale 42,180
***

Stock as on 1st April, 2012

72,500
Plant and Machinery 1,15,200
Computer Systems 27,300|
Furniture and Fixtures
4,215
Bank Balance
1,760
Cash Balance
72,190
Salaries
42,114
Office Rent
11,111
General Expenses 1,10,540 2,97,720
Debtors and Creditors
Printing and Stationery
12,114
Postage and Courier Expenses 1,236
2,350|
Legal Expenses 2,777
Commission
3,115
Marketing Expenses
Finance QCharges 728|
9,93,770 9,93,770
Total
The Branch Account in Head Office showed a Debit Balance of 6,73,200 and Goods sent to
Branch Account showed credit balance of 11,39,880.
when one US $ was equal to
Plant Machinery
and was acquired by the Branch on 1st April, 2012,
41. Computer system was required. on 30th June, 2012, when 100 was equal to US $ 2.50.
The Branch acquired Furniture and Fixtures on 1st October, 2012 when one Us dollar was quoted
at 46.
 Foreign Currency Conversion [As Per AS 111- Foreign Branches
follows
Head Office provides depreciation as

On Plant and Machinery 15% p.a.

On Computer Systems 25% p.a.
On Furniture and Fixtures 10% p.a.
New York Branch reported closing stock of US $ 48,500 on 31-03-2013.
The exchange rates were as under
01-04-2012 US $ 1 = 7 41
01-04-2013 US $ 1 = 7 48

Average US $ 1 = 4 5
(a) You are required to convert the given branch Trial balance into Rupees.
(b) You are required to prepare New York Branch Profit and Loss Account for the year ended
31-3-2013 and also Balance sheet as on that date. (Mar. 07, adapted)
Solution
Excellent Softech
Trial Balance as at 31-3-2013

Particulars Rate Debit Credit

Head Office Given 6,73,200
Goods Recd. from H.o Given 11,39,880
Purchases and Sales 45 2,00,34,000| 3,06,33,750
Opening Stock (1-4-12) 41 17,29,380|
Plant and Machinery (1-4-12) 41 29,72,500
Computer Systems (30-06-12) 40 46,08,000
Funiture and Fixtures (1-10-12) 46 12,55,800
Cash Balance 48 84,480
Bank Balance 48 2,02,320
Salaries 45 32,48,550
Office Rent 18,95,130
General Expenses 45 499,995
Debtors and Creditors 48 53,05,920 1,42,90,560
Printing and Stationery 45 5,45,130
Postage and Courier Expenses 45 55,620|
Legal Expenses 45 1,05,750
Commission 45 1,24,965
Marketing Expenses 45 1,40,175
Finance Charges 45 32,760
Difference in Foreign Exchange 16,17,155
4,55,97,510 4,55,97,510

Dr. Branch Trading and Profit and Loss Account for the year ended 31-3-13 Cr.

Particulars Particulars
To Opening Stock 17,29,380 By Sales 3,06,33,750
Stock 23,28,000
To Purchases 2,00,34,000 By Closing
To Goods from H.O. 11,39,880
To Gross Profit c/d 1,00,58,490

3,29,61,750 3.29,61,750
By Gross Profit b/d 1,00,58,490
To Salaries 2,.48,550
To Office Rent 18,95,130
To General Expenses 4,99,995
To Printing and Stationery 5,45,130
To Postage and Courier Exp 55,620
To Legal Expenses 1,05,750
To Depreciation on:
Plant and Machinery 4,45,875
Computer Systems 8,64,000
Fumiture and Fixtures 62,790
 Advanced Financial Accounting (M. Com. Part-11 : SEM-I1)

To Commission 1,24,965|
To Marketing Expenses 1,40,175
To Finance Charges 32,760
To Ditference in Foreign Exchange| 16,17,1555
To Net Profit 4,20,595|
1,00,58,490 1,00,58,490
31-3-13
Balance Sheet of New York as at

Liabilitiess Assets
Head Office A/c: Plant and Machinery
Balance: 6,73,200 Balance : 29,72,500
Add: Profit 4,20.595 10,93,795| Less: Depreciation (4.45.895)25,26,625
Creditors |1,42,90,560 Computer Systems 46,08,000
Less Depreciation (8.64.000)37,44,000
Furniture 12,55,800|
Less Depreciationn (62,790) 11,93,010
Current Assets
Stock in Trade 23,28,000
Debtors 53,05,920
Bank Balance 2,02,320
Cash Balance 84,480
|1,53,84,355 1,53,84,355
Working Notes
Closing Stock (31-3-13) 7 23,28,000
Assets
Depreciation on Fixed 12 Months 4,45,875
Plant and Machinery 29,72,500 15%
46,08,000 25% 9 Months 8,64,000
Computer Systems
Furniture and Fixtures 12,55,800 10% 6 Months 62,790

llustration 7
Black and White Limited have a branch in London and Head Office in Mumbai. The Trial Balance
prepared as on 31st March 2015 was as below

Particulars Dr.()Cr.( |
Head Office Account **'*** *** ** .1,800
Sales 16,200
Goods from Head Ofice * * * * * 9,000
Stock (1st April, 2014) 1,500
Furniture and Fixtures 2,000
Cash on Hand *"**' **" *'*" ***
210
Cash at Bank 190|
Outstanding Expenses 200
Salaries *** *** '* '** **
2,600
Taxes Insurance *** **' *** *** *** 50
Rent .
200
Sundry Debtors ***

2,450
18,200 18,200
The Branch Account in the books of Head Office showed a debit balance of 90,000 and goods
sent to branch showed a credit balance of 6,46,000. The closing stock at branch was valued at
£ 9,000.
The exchange rates on different dates were below
On 1st April, 2014 £ 1 =T 70, on 31st March, 2015 £ 1 = 7 74 and Average rate £ 1 = R 72.
For Furniture it was £ 1 7 60.
You are required to prepare () Trial Balance of Branch in Indian Rupees (i) Trading and Profit and
Loss Account for the year ending 31st March, 2015 (ii) Balance Sheets as on that date.
 7JI
Foreign Branches 11
Conversion .As Per AS 111-
Foreign Currency
(Oot. 2010, adapted)
Solution Whlte Ltd.
In the Books of Black and
Branch as on 31-3-2015
Converted Trial Balance of London
Rate Dr. Cr. F
Particulars Dr.f Cr. £
1,800 Given 90,000
Head Office A/c 11,66,400
16,200 72
Sales
Goods from Head Office 9,000 Given 6,46,000
Opening Stock ,500 70 1,05,000
2,000 60 1,20,000|
Furniture 15,540
210 74
Cash Balance
190 74 14,060
Bank Balance 14,800
200 74
Outstanding Expenses 72 1,87,200
Salaries 2,600
50 72 3,600
Taxes Insurance
Rent 200 72 14,400
Debtors 2,450 74 1,81,300|
Exchange Difference
15,900
12,87,100 12,87,100
18,200 18,200
Trading and Profit and Loss Account for the year ended 31-3-2015

Particulars Particulars
To Opening Stock 1,05,000 By Sales 11,66,400
Stock 66,600
To Goods from H.O. 6,46,000 By Closing
To Gross Profit 4,82,000
12,33,000| 12,33,000
To Salaries 1,87,200By Gross Profit 4,82,000
15,900
To Taxes 3,600 By Exchange Difference
To Rent 14,400
To Depreciation 12,000
To Net Proit 2,80,700
4,97,900 |4,97,900
Balance Sheet as on 31-3-2015

Liabilities Assets
Outstanding Expenses 14,800 Furniture 1,20,000
Head Office A/c 90,000 Less: Depreciation 12.000 1,08,000
Net Profit 2.80.700 3,70,700 Stock 66,600
Debtor 1,81,300
Cash 14,060
Bank 15,540

3,85,500 3,85,500
lustration 8
Hindustani (India) Limited has a Branch in New Jersey, America. Its Trial Balance as on 31st March,
2015 is as below :

Particulars Dr. US $ Ci. US $

Machinery 2,40,000
Furniture 16,000
Stock (Opening) 1,12,000
Purchases ** ** **
4,80,000
Sales ***

** * ** 8,32,000
Goods Received from India 1,60,000
Wages ,000
Carriage Inwards 2,000
Salaries *** **'
** * ** 12,000
 Advanced Financial Accounting ([Link]. Part-ll: SEM-JM
12 |-II)
Rent and Taxes
***
4,000|
2,000
Insurance "** *
2,000
General Expenses
Head Office Account 2,28,000
Sundry Debtors
48,000|
Sundry Creditors
** ***

40,000
10,000|
Bank Balance 2,000
Cash Balance 1,500
Printing and Stationery 4,500
Telephone Expenses
* *
11,00,000 11,00,000
avalable is as below:
Theadditional information 2,000.
(a) Wages outstanding are $ Furniture.
10% on Machinery and
(b) Provide depreciation
78,40,000.
(c) The goods sent to branch were balance of R 86 lakh.
(d) Branch account in the books of Head office shows debit
(e) Closing stock in the branch was $ 1,04,000.
() The rates of exchange were
On 1st April, 2014 $ 1 = F 39
On 31st March, 2015 $ 1 =741
Average rate was $ 1=7 40
The Fixed assets were purchased when the rate was $ 1 = 38.
(g) There were no items in transit at the end of the year.
You are required to prepare the Trial Balance as on 31st March, 2015 in Indian Rupees. Prepare
Trading and Profit and Loss Account for the year ending 31st March, 2015 and the Balance Sheet
as on the same date, taking into account requirements of AS 11 (April 2011, adapted)
Solution :
In the Books of Hindustani (India) Ltd.
Converted Trial Balance of New Jersey Branch as on 31-3-2015

Particulars Dr. US $ Cr. USsRato Dr. Cr.

Machinery 2,40,0000 38 91,20,000
Furniture 16,000 38 6,08,000
Stock 1,12,000O 39 43,68,000
Purchases 4,80,000 40 1,92,00,000
Sales 8,32,000 40 3,32,80,000
Goods Received from India 1,60,000 Given 78,40,000
Wages 4,000 40 1,60,0000
Carriage Inwards 2,000 40 80,000
Salaries 12,000 40 4,80,000
Rent and Taxes 4,,000| 40
Insurance
1,60,000
,000 40 80,000
General Expenses 2,000 40
Head Office Account 80,000
2,28,000 Given 86,00,000
Sundry Debtors 48,000 41
Sundry Creditors 19,68,000
40,000 41 16,40,000
Bank Balance 10,000 41 4,10,000
Cash Balance 2,000 41 82,000
Printing and Stationery 1,500 40 60,000
Telephone Expenses 4,500 40
Difference in Exchange 1,80,000|
13,56,000
11,00,000 |11,00,000 4,48,76,000 4,48,76,000
Foreign Currency Conversion [As Per AS 111- Foreign Branches
13
Trading Account for the year ended 31-3-2015
Particulars
Particulars
To Opening Stock 43,68,000 By Sales
To Purchase 3,32,80,00o
To Carriage Inwards
1,92,00,000 By Closing Stock 42,64,000
80,000 ($ 1,04,000 x 7 11)
To Goods Received from India 78,40,000
To Wages 1,60,000
Add : Outstanding 82,000
To Gross Profit 2,42,000
58,14,0000
3,75,44,000 3,75,44,000
Note: Outstanding Wages $ 2,000 x 41 =
82,000.
Profit and Loss Account for the
year ended 31-3-2015
Particulars Particulars
To Salaries
4,80,000 By Gross Profit b/f 58,14,000
To Rent and Taxes
To Insurance
1,60,000 By Differences in Exchange 3,56,000
80,000
To General Expenses
80,000
To Printing and Stationery
60,000
To Telephone Expenses
1,80,000
To Depreciation
Machinery 9,12,000
Furniture
To Net Profit
60,800 9,72,800
51,57,200
71,70,000 71,70,000
Balance Sheet as on 31-3-2015
LiabilitiesS
Assets
Head Office 86,00,000|
Add Net Profit
Machinery 91,20,000
51.57.200 1,37,57,200 Less: Depreciation 9.12.000 82.08.000
Sundry Creditors 16,40,000 Furniture
Outstanding Wages 6,08,000|
82,000| Less Depreciation 60,800 5,47,200
Closing Stock 42,64,000
Sundry Debtors 19,68,000
Bank 4,10,000
Cash 82,000
1.54,79.200 1,54,79,200
2.3 INDIAN BRANCH OF FOREIGN H.O.
Tutorial Note In the following lustrations, it is assumed that the foreign firm will
prepare
consolidated accounts on the basis of the Indian Accounting Standard (AS 11). In practice, the
foreign firm would use the IFRS (International Financial Reporting Standards) or the Applicable
Local Standards.]
Ilustration 9 (Indian Branch of H.O. in U.K.)
The following balances appeared in the books of Pune Branch of firm in
a foreign on 31-12-2013.
Particulars Dr. Cr.
Stock on 1-1-2013 *** **** *** ***
37,800
Purchases *** *** ** * ..
2.25,000
Sales
Debtors
*** *** ** * **

3,37,500
* *** **"
1,17,000
Creditors ** * 78,000
Bills Receivable ****
31,200
Bills Payable ****** * * * * * *

27,300
Wages and Salaries *** *** *** *****

14,400
Rent, Rates and Taxes ** *** **
10,800
Miscellaneous Expenses 4,500
 Advanced FinancialAccounting ([Link]. Part-11: SEM-IID
14
* **
14,730|
Furniture 90,870
Cash at Bank 1,03,500
Head Office Account
5,46,300 5,46,300
of Head Office showed
Branch Account in the books
a

on 31-12-2013 was
65,000. Pune
Stock
31-12-2013.
balance of £ 1,080 on
debit remittance of £ 125 recelved from Head Office.
Fumiture and Fittings were purchased from a

The rates of exchange were67.50 per £

31-12-2012
31-12-2013
68.50 per £
be taken at 68 per £.
The average rate of 2013 may
Sheet of Pune Branch in the books of
and Loss Account and Balance
Prepare Trading and Profit (Oct. 13, adapted)
Head Office.
Solution
Converted Trial Balance (31-12-13)

Rate Dr. Cr Dr. (£) Cr. (E)

Particulars 560|
Stock on 1-1-2013 67.50 37,800
3,309
Purchases 68.00| 2,25,000
68.00 3,37,500 4,,963
Sales 1,708
Debtors 68.50 1,17,000
68.50 78,000 1,139
Creditors 456
Bills Receivables 68.50| 31,200
68.50 27,300 398
Bills Payable 212
Wages/Salaries 68.00 14,400
Rent, Rates and Taxes 68.00 10,800 158|
68.00 4,500 66
Misc. Expenses
14,730 125
Furniture
Cash at Bank 68.50 90,870 1,326
1,03,50O 1 ,080
H.O. A/c
Difference in Foreign Exchange A/c 340

| 5,46,300 5,46,300o 7,920 7,920

Trading & P &LA/c for the year ended 31-12-2013

Particulars Particulars
To Opening Stock 560 By Sales 4,963
To Purchases 3,309 By Closing Stock (65,000 68.5) 949
To Wages and Salaries 212
To Gross Profit c/d 1,831
5,642 5,642
To Rent, Rates and Taxes 158 By Gross Profit b/d 1,831
To Misc. Expenses 66 By F. E. Diff. 340
To Net Profit o/d 1,337

2,171 2,171
Balance Sheet of Pune Branch as on 31-12-2013

Liabilitiess f Assets
Creditors 1,139| Furniture 125
Bills Payable 398 Closing Stock 949
H. O. A/c 1,080| Debtors 1,708
Add: Net Profit 1.947 3,027| Bills Receivable 456
Cash at Bank 1,326

4,564 4,564
Foreign Currency Coversion |As Per AS 11/- Foreign Branches 5
lustration 10:
Arihant & Company has head office at Washington D.C. (U.S.A.) and Branch at Pune (India). Pune
anch furnishes you with its trial balance on 31st March, 2015 and the additional information given
thereafter.

Particulars Dr. Cr.

Stock on 1-4-2014 6,00,000
Purchases |16,00,000
Sales 24,00,000
Sundry Creditors 6,00,000
Sundry Debtors ** **' ** ** **
8,00,000
Bills of Exchange 2,40,000 4,80,000
Wages and Salaries 11,20,000
Rent, Rates and Taxes * **" ** * ***
7,20,000
Sundry Charges **** *** * " ** 3,20,000
Computers 4,80,000
Bank Balance 8,40,000
Washington D.C. Office A/c 32,40,000
67,20,000|67,20,000
Additional Information
1. Computers were acquired from a remittance of US $ 12,000 received from Washington D.C.
head office and paid to the suppliers. Depreciate at 60% for the year.
2. Unsold stock of Pune branch was worth 8,40,000 on 31st March, 2015.
3. The rates of exchange may be taken as follows
() On 1-4-2014 40 per US $
(ii) On 31-3-2015@ 42 per US $
i ) Average exchange rate for the year @41 per US $.
(iv) Conversion in $ shall be made upto two decimal accuracy.
You are asked to prepare in US dollars the revenue statement for the year ended 31st March, 2015
and the Balance Sheet as on that date of Pune branch as would appear in the books of Washington
D.C. head office Arihant & Company. You are informed that Pune branch account showed a debit
balance of US $ 79,218.36 on 31-3-2015 in Washington D.C. books and there were no items pending
reconciliation. The foreign operations is in the nature of an integral operation.
Solution: (April, 2014, adapted)
In the Books of Arihant & Company
Converted Trial Balance of Pune Branch as on 31-3-2015

Particulars Dr.000's|Cr. 000's Rate Dr. US $ Cr. US $

Stock as on 1-4-2014 600 40 15,000.00|
Purchases and Sales 1,600 2,400 41 39,024.40 58,536.58
Debtors and Creditors 800 600 42 19,047.62 14,285.72
Bills of Exchange 240 480 42 5,714.28 11,428.58
Wages and Salaries 1,120| 41 27,317.08
Rent, Rates and Taxes 720 41 17,560.98
Sundry Charges 320 41 7,804.88
Computers 480 Original 24,000.00
Bank Balance 840 42 20,000.00o
Washington D.C. Office Alc 3,240 Actual 79,218.36
6,720 6,720| 1,63,469.24| 1,63,469.24
Trading and Profit and Loss Account for the year ended 31-3-2015

Particulars Particulars $
To Opening Stock |15,000.00| By Sales
To Purchases
58,536.58
39,024.40| By Closing Stock
To Wages and Salaries 27,317.08 By Gross Loss c/d
20,000.00
2,804.90
81,341.48 81,341.48
 Advanced Financial Accounting ([Link]. Part-ll: SEM-11)
16
By Net Loss c/d to Balance Sheet |35,370.76
To Gross Loss b/d | 2,804.90|
17,560.98
To Rent, Rates and Taxes
7,804.88
To Sundry Charges
To Depreciation on Computers
(12.000 x 60%) 7,200.0
35370.76 35.370.76
Balance Sheet as on 31-3-2015

Liabilties Assete
79,218.36| Computers 12,000.0o
Washington D.C. (U.S.A.) (7.200.00) 4,800.00
35,370.76)| Less Depreciation
Less Net Loss for the year |43,847.60| Closing Stock 20,000.00
Net Balance in H.O. A/c
14,285.72 Sundry Debtors |19,047.62
Sundry Creditors 11,428.58 Bank Balance 20,000.00
Bills Payable Bills Receivable 5,714.28
69,561.90
69,561.90

FOREIGN OPERATIONS: PROVISIONS OF

AS 11
3.

[REVISED 2003]
3.1 SCOPE
This Statement should be applied in translating the financial statements of foreign operations
[Para 1].

3.2 DEFINITIONS [PARA2]

or branch of the reporting enterprise,
(a) Foreign operation is a subsidiary, associate, joint venture
the activities of which are based or conducted in a country other than the country ofthe reporting
enterprise.
(b) Integral foreign operation is a foreign operation, the activities of which are an integral part of
those of the reporting enterprise.
the reporting enterprise's share in the net
(c) Net investment in a non-integralforeign operation is
assets of that operation.
that is not an integral foreign operation.
(d) Non-integral foreign operation is a foreign operation
3.3 CLASSIFICATION OF FOREIGN OPERATIONS
used to translate the financial statements of
(1) Integral and Non-Integral [Para 17]: The method
a foreign operation depends on the way in which it is financed and operates in relation to the
reporting enterprise. For this purpose, foreign operations are classified as either "integral foreign
operations" or "non-integral foreign operations".
the operations of
(2) Integral Foreign Operation [Para 18]: A foreign operation that is integral to
the reporting enterprise carries on its business as ifit were an extension ofthe reporting enterprise's
from the
operations. For example, such a foreign operation might only sell goods imported
reporting enterprise and remit the proceeds to the reporting enterprise. In such cases, change in
a

the exchange rate between the reporting currency and the currency in the country of foreign
operation has an almost immediate efiect on the reporting enterprise's cash flow from operations.
Therefore, the change in the exchange rate affects the individual monetary items held by the
foreign operation rather than the reporting enterprise's net investment in that operation.
(3) Non-Integral Foreign Operation [Para 191: In contrast, a non-integral foreign operation
accumulates cash and other monetary items, incurs expenses, generates income and perhaps
arranges borrowings, all substantially in its local currency. It may also enter into transactions in
foreign currencies, including transactions in the reporting currency. When there is a change in
 Foreign Currency Comversion [As Per AS 111- Foreign Branches
17
the exchange rate between the reporting currency and the local currency, there is little or no
direct effect on the present and future cash flows from operations of either the non-integral
foreign operation or the reporting enterprise. The change in the exchange rate affects the reporting
enterprise's net investment in the non-integral foreign operation rather than the individual monetary
and nonmonetary items held by the non-integral foreign operation.
(4) Indications of Non-Integral Operations |Para 20]:The following are indications that a foreign
operation is a non-integral foreign operation rather than an integral foreign operation:
a. while the reporting enterprise may control the foreign operation, the activities
of the foreign
operation are carried out with a significant degree of autonomy from those of the reporting
enterprise
b.
transactions with the reporting enterprise
activities,
are not a high proportion ofthe foreign operation's
c. the activities of the foreign operation are financed mainly from its own operations or local
borrowings rather than from the reporting enterprise;
d. costs of labour, material and other components of the foreign operation's products or services
are primarily paid or settled in the local currency rather than in the reporting currency;
e. the foreign operation's sales are mainly in currencies other than the reporting currency
f. cash flows of the reporting enterprise are insulated from the
day-to-day activities of the foreign
operation rather than being directly affected by the activities of the foreign operation; .
g. sales prices for the foreign operation's products are not primarily responsive on a short-term
basis to changes in exchange rates but are determined more by local competition or local
government regulation; and
h. there is an active local sales market for the foreign operation's products, although there also
might be significant amounts of exports.
The appropriate classification for each operation can, in principle, be established from factual
information related to the indicators listed above. In some cases, the classification of a foreign
operation as either a nonintegral foreign operation or an integral foreign operation of the reporting
enterprise may not be clear, and judgement is necessary to determine the appropriate classification.

3.4 FINANCIAL STATEMENTS OF INTEGRAL FOREIGN OPERATIONS

1. Principles of Translation [Para 21]: The financial statements of an integral foreign operation
should be translated using the principles and procedures in paragraphs 8 to 16 as if the transactions
of the foreign operation had been those of the reporting enterprise itself.
2. Item-wise Rules of Translation [Para 22]: The individual items in the financial statements of
the foreign operation are translated as if all its transactions had been entered into
by the reporting
enterprise itself The cost and depreciation oftangiblefixed assets is translated using the exchange
rate at the date ofpurchase of the asset or, if the asset is carried at fair value or other similar
valuation, using the rate that existed on the date of the valuation. The cost of inventories is
translated at the exchange rates that existed when those costs were incurred. The recoverable
amount or realisable value of an asset is translated using the exchange rate that existed when the
recoverable amount or net realisable value was determined. For example, when the net realisable
value of an item of in ventory is determined in a foreign currency, that value is translated using
the exchange rate at the date as at which the net realisable value is determined. The rate used is
therefore usuallytheclosing rate. An adjustment may be required to reduce the carrying amount
ofan asset in the financial statements ofthe reporting enterprise to its recoverable amount or net
realisable value even when no such adjustment is necessary in the financial statements of the
foreign operation. Alternatively, an adjustment in the financial statements ofthe foreign operation
may need to be reversed in the financial statements of the reporting enterprise.
3. Rate for Translation [Para 23]: For practical reasons, a rate that approximates the actual rate at
the date of the transaction is often used, for example, an average rate for a week or a month might
be used for all transactions in each foreign currency occurring during that period. However, if
exchange rates fluctuate significantly, the use of the average rate for a period is unreliable.
18 Advanced Financial Accounting (M. Com. Part-l1: SEM-II)

3.5 FINANCIAL STATEMENTS OFNON-INTEGRAL FOREIGN OPERATIONS

1. Procedures | Para 24|: In translating the financial statements ofa non-integral foreign operation
for incorporation in its financial statements, the reporting enterprise should use the following

proccdures:
a. the assets and liabilities, both monetary and non-monetary, ofthe non-integral foreign operation
should be translated at the closing rate;
b. incone and expense items of the non-integral foreign operation should be translated at
and
exchange rates at the dates of the transactions;
c. all resulting exchange differences should be accumulated in a foreign currency translation
reserve until the disposal of the net investment.
2. Rate |Para 25|: For practical reasons, a rate that approximates the actual exchange rates, for
rate for the period, is often used to translate income and expense
items ofa
example
an average
foreign operation.
3. Exchange Differences |Para 261: The translation ofthe financial statements ofa non-integral
from:
foreign operation results in the recognition of exchangedifferences arising
a. translating income and expense items at the exchange rates at the dates of transactions and
assets and liabilities at the closing rate;
b. translating the opening net investment in the non-integral foreign operation at an exchange
rate different from that at which it was previously reported; and

C. other changes to equity in the non-integral foreign operation.

These exchange differences are not recognised as income or expenses for the period because the
and future cash flows
changes in the exchange rates have little or no direct effect on the present
When a
from operations of either the non-integral foreign operation or the reporting enterprise.
nonintegral foreign operation is consolidated but is not wholly owned, accumulated exchange
differences arising from translation and attributable to minority interests are allocated to, and
balance sheet.
reported as part of, the minority interest in the consolidated
4. Goodwill/ Capital Reserve [Para 27]: Any goodwill or capital reserve arising on the acquisition
of a non-integral foreign operation is translated at the closing rate in accordance with paragraph
24.
5. Contingent Liability |Para 281: A contingent liability disclosed in the financial statements ofa
in the financial
non-integral foreign operation is translated at the closing rate for its disclosure
statements ofthe reporting enterprise.
6. Consolidation |Para 29]: The incorporation ofthe financial statements ofa non-integral foreign
operation in those of the reporting enterprise follows normal consolidation procedures, such as
the elimination ofintra-group balances and intra-group transactions ofa subsidiary (see AS 21,
Consolidated Financial Statements, and AS 27, Financial ReportingofInterests in Joint Ventures)
However, an exchange difference arising on an intra-group monetary item, whether short-term or
long-term, cannot be eliminated against a corresponding amount arising on other intra-group
balances because the monetary item represents a commitment to convert one currency into another
and exposes the reporting enterprise to a gain or loss through curreney fuctuations. Accordingly
in the consolidated financial statements ofthe reporting enterprise, such an exchange difference
continues to be recognised as income or an expense or, ifit arises from the circumstances described
in paragraph 15, it is accumulated in a foreign currency translation reserve until the disposal of
the net investment.
7. Different Reporting Dates [Para 30]: When the financial statements ofa non-integral foreign
operation are drawn up to a diferent reporting date from that of the reporting enterprise, the non-
integral foreign operation often prepares, for purposes of incorporation in the financial statements
of the reporting enterprise, statements as at the same date as the reporting enterprise. When it is
impracticable to do this, AS 21, Consolidated Financial Statements, allows the use of financial
statements drawn up to a different reporting date provided that the difference is no greater than
six and
months are made for the effects of any significant transactions or
adjustments other
eventsthatoccur between the different reporting dates. In such a case, the assets and liabilities of
the non-integral foreign operation are translated at the exchange rate at the balance sheet date or
Foreign Currency Coversion [As Per AS 11- Foreign Branches 19

the non-integral foreign operation and adjustments are made when appropriate for significant
movementsin exchange rates up tothebalance sheet date ofthe reporting enterprises in accordance
with AS [Link] is used in applying the equity methodtoassociates and in applying
proportionate consolidationto joint ventures in accordance with AS 23, Accounting for Investments
in Associates in Consolidated Financial Statements and AS 27, Financial Reporting of Interests
in Joint Ventures.
8. Net Investment in a Non-integral Foreign Operation |Para 151: Exchange differences arising
on a monetary item that, in substance, forms part of an enterprise's net investment in a non-
integral foreign operation should be accumulated in a foreign currency translation reserve in the
enterprise's inancial statements until the disposal ofthe net investment, at which time they should
be recognised as income or as expenses in accordance with paragraph 31.
9. Monetary Dues |Para 16|: An enterprise mayhave a monetary item that is receivable from,or
payable to, a non-integral foreign operation. An item for which settlement is neither planned nor
likely to occur in the foresecable future is, in substance, an extension to, or deduction from, the
enterprise 's net investment in that non-integral foreign operation. Such monetary items may include
long-term receivables or loans but do not include trade receivables or trade payables

3.6 DISPOSAL OF ANON-INTEGRAL FOREIGN

OPERATION
1.
Cumulative Exchange Differences |Para 311:On the disposal ofa non-integral foreign operation,
the umulative amount of the exchange diferences which have been deferred and which relate to
that operation should be recognised as income or as expenses in the same period in which the
gain or loss on disposal is recognised.
2. Methods of Disposal |Para 32]: An enterprise may dispose of its interest in a non-integral
foreign operation through sale, liquidation, repayment of share capital, or abandonment ofall, or
part of, that operation. The payment o a dividend forms part of a disposal only when it constitutes
a return of the investment. In the case of a partial disposal, only the proportionate share of the
related accumulated exchange diferences is included in the gain or loss. A write-down of the
carrying amount of a non-integral foreign operation does not constitute a partial disposal.
Accordingly, no part of the deferred foreign exchange gain or loss is recognised at the time of a
write-down.

3.7 CHANGEIN THECLASSIFICATION OF AFOREIGN OPERATION

1. Applicable Date| Para 331: When there is a change in the classification ofa foreign operation,
the translation procedures applicable to the revised classification should be applied from the
date of the change in the classification.
2. Accounting |Para 34|: The consistency principle requires that foreign operation once classified
as integral or non-integral is continued to be so classified. However, a change in the way in which
a foreign operation is financed and operates in relation to the reporting enterprise may lead to a
change in the classification ofthat foreign operation. When a foreign operation that is integral to
the operations of the reporting enterprise is reclassified as a non-integral foreign operation,
exchange differences arising on the translation of non-monetary assets at the date of the
reclassification are accumulated in a foreign currency translation reserve. When a non-integral
foreign operation is reclassified as an integral foreign operation, the translated amounts for non-
monetary items at the date of the change are treated as the historical cost for those items in the
period of change and subsequent periods. Exchange diferences which have been deferred are
not recognised as income or expenses until the disposal of the operation.

3.8 DISCLOSURE
1. What to Disclose |Para 40]: An enterprise should disclose:
a. the amount of exchange differences included in the net profit or loss for the period; and
b. net exchange differences accumulated in foreign currency translation reserve as a separate
component of shareholders' funds, and a reconciliation of the amount of such exchange
differences at the beginning and end of the period.
 Advanced FinancialAccounting (M. Com. Part-l1: SEM-II)
20
When the reporting currencyis different from
2. Reason for using Different Currency |Para 411:
is domiciled, the reason for using a different
the currency ofthe country in which the enterprise
currency should also be
curreney should be
disclosed. The reason for any change in the reporting
disclosed.
When there is a change in the classification
Disclosures on Change in Classification |Para 42|:
3. disclose:
ofa significant foreign operation, an enterprise should
a. the nature ofthechange in classification;
b. the reason for the change:
shareholders' funds; and
c. the impact ofthe change in classification on
had the change in classification
d. the impact on net profit or loss for each prior period presented
occurred at the beginning of the carliest period presented.
The cffect on foreign currency monetary items or
4. Change in Rates After B/S date |Para 43]:
on the financial statements ofa foreign operation of a
change in exchange rates occurring after
and Events Occurring
the balance shect date is disclosed in accordance with AS 4, Contingencies
After the Balance Sheet Date.

5. Risk Management Policy |Para 44]: Disclosure is also encouraged of an enterprise's foreign
currency risk management policy.

3.9 TRANSITIONAL PROVIsIONS

On the first time application of this Statement, if a foreign branch is classified as a non-integral
the accounting treatment
foreign operation in accordance with the requirements of this Statement,
classification of a
in
prescribed paragraphs 33 and 34 of the Statement in respect of change in the
foreign operation should be applied. [Para 45]

4. INTEGRAL V/S NON-INTEGRAL FOREIGN OPERATIONS

[Link] Foreign Operation (IFO) Non-Integral Foreign Operation (NFO)

1. Meaning
It is a foreign operation, whose activities It is a foreign operation that is not an
are an integral part of those of the reporting | integral Foreign Operation.
enterprise.
2. Business
The business of IFO is carried on as if it The business of NFO is carried on in a
were an extension of the reporting substantially independent manner by
enterprise's operations. accumulating cash and other monetary
items, incurring expenses, generating
income and arranging borrowings, in its
local currency.
3. Example
Sale of goods imported from the reporting Production in a foreign country out of
enterprise and remittance ofproceeds to the resources available in such nation
reporting enterprise. independent ofthe reporting enterprise.
4. Currencies Operated
Generally, IFO carries on business in a NFO business may also enter into
single foreign currency, i.e. of the country transactions in several foreign currencies,
where it is located. including transactions in the reporting
currency.
EXHIBIT 1:AS 11 (REVISED 2003) AT A GLANCE

AS-11 (REVISED 2003)

TheEffect of Changes in Foreign Exchange Rates

(1) (2) (3)

Foreign Currency Transactions
Foreign Operatlon lilke Forward Exchange
of entity Itself
Branch, Subsidiary, etc. Contract
Studied in [Link].]
[Not in Syllabus]

(A) (B)
Integral Foreign Operation Non-Integral
same as for own foreign
Foreign Operation
Currency transaction

Translate all assets and liabilities

(monetary as well as
at
non-monetary)
(A) (B) (C) (D) rate. Translate income and
closing
expenses at the rate at the date of
Record Monetary Non-Monetary transaction.
tems setled items carried Non-Monetary items carried at 2. All
Transactions: fair value: Translate at closing exchange difference be tfd. to
using spot/ orc/f: at cost: rate (date of fair value). foreign currency translation reserve,
average rate Transfer Translate at which will be tránsferred to P &L only
the rate of [Difference will be treated as
Exchange valuation difference not as when net investment in non-integral
Difference to its acquisition. operation is disposed of in part or in
P&LA/Cc (No Exch. Diff.) exchange difference.] full.
 Advanced Financial Accounting (M. Com. Part-ll: SEM-1I)
22

5. Cash Flows From Operations

in the exchange rate between the
Cash flows from operations of the reporting| Change
and immediately reporting currency and the local currency,
enterprise are directly has little or no direct effect on the present
affected by a change in the exchange
rate

and the and future Cash Flows from Operations of

between the reporting currency
either the NFO or the reporting enterprise.
currency in the country of IFO.
Rate
6. Effect of Change in Exchange
affects the Change in the exchange rate affects the
Change in the exchange rate reporting enterprise's Net Investment in
individual monetary items held by the
IFO

rather than the reporting enterprise's Net the NFO rather than the individual monetary
Investment in the IFO. and non-monetary items held by the NFO.
 Foreign Currency Conversion [As Per AS 11| Foreign Branches
-

23

EXERCISES
OUTLINE
5. Theory Questions 23
6. Objective Questions 23
6.1 Multiple Choice Questions 23
6.2 Check Your Answers
25

5. THEORY QUESTIONS

1. Write a short note on Conversion of Foreign Branch Trial Balance.

(May 99)
[Ans.: Refer Para 1]
2. In the context of the relevant
and liabilities and income and
Accounting Standard, give your comments on the following : "Assets
into Indian Rupees at the
expenditure items in respect of foreign branches are translated
prevailing rate of exchange at the end of the year. The resultant
exchange differences, in case of profit, is carried to other Liabilities
is charged to Revenue". Account, and in case of loss,
(CA Final, Nov. 2002) [Ans.: Refer Para 1]

6. OBJECTIVE QUESTIONS

6.1 MULTIPLE CHOICE QUESTIONS

1. AS 11 defines 'Foreign Operation'"
viz.
as an entity whose activities are based in a foreign country
(a) subsidiary of the reporting enterprise (6) joint venture of the reporting enterprise
(c) branch of the reporting enterprise (d) all the above
2. If a foreign operation which sells
goods imported from the reporting enterprise and remits the
proceeds to the reporting enterprise, it is
(a) An Integral Foreign Operation (b) A Non-integral Foreign Operation
(c) either (a) or (b) (d) neither (a) nor (b)
3. If the change in the exchange rate affects the individual
monetary items held the
operation rather than the reporting enterprise's net investment in that operation, by
it is foreign
(a) An Integral Foreign Operation (b) A Non-integral Foreign Operation
(c) either (a) or (b) (d) neither (a) nor (b)
4. If the
change in the exchange rate affects the reporting enterprise's net investment in that operation
rather than the individual monetary items held by the foreign operation, it is
(a) An Integral Foreign Operation (b) A Non-integral Foreign Operation
(c) either (a) or (b) (d) neither (a) nor (b)
5 . If transactions with the reporting enterprise are not a
high proportion of the foreign operation's
activities, it is
(a) An Integral Foreign Operation (b) A Non-integral Foreign Operation
(c) either (a) or (b) (d) neither (a) nor (b)
6. If the activities of the foreign operation are financed mainly from its own operations or local
borrowings rather than from the reporting enterprise, it is
(a) An Integral Foreign Operation (b) A Non-integral Foreign Operation
(c) either (a) or (b) (d) neither (a) nor (b)
7. If the foreign operation's sales are mainly in currencies other than the reporting currency, it is
(a) An Integral Foreign Operation (b) A Non-integral Foreign Operation
(c) either (a) or (b) (d) neither (a) nor (b)
24 Advanced Financial Accounting ([Link]. Part-Il: SEM-1I)
8. If the foreign operation's sales are mainly in currencies other than the reporting currency, it is
(a) An Integral Foreign Operation (bY A Non-integral Foreign Operation
(c) either (a) or (b) (d) neither (a) nor (b)
9. AS 11 classifies the foreign branches into
(a) (i) Integral Foreign Operation and (ii) Non- Integral Foreign Operation
debtors method
(b) Branches following () Debtors method and (ii) Stock and
(c) Branches receiving goods at (i) cost and (i) invoice price
(d None of the above
10. Monetary items of Integral Foreign Operation at the balance sheet are translated at

(a) exchange rate at the date of transaction

(b)closing exchange rate
(c) average exchange rate during the year
(d) exchange rate on date of valuation at fair value
11. Tangible Fixed assets of Integral Foreign Operation carried at cost are translated at

(a) exchange rate at the date of purchase of asset

(b) closing exchange rate
(c) average exchange rate during the year
(d) exchange rate on date of valuation at fair value
carried at cost are translated at
[Link] on Fixed assets of Integral Foreign Operation
(a) exchange rate at the date of purchase of asset
(b) closing exchange rate

(c) average exchange rate during the year

valuation at fair value
(d) exchange rate on date of carried at fair value are translated at
Operation
13. Tangible Fixed assets of Integral Foreign
of purchase of asset
(a) exchange rate at the date
(b) closing exchange rate
the year
(c) average exchange rate during at fair value
date of valuation
(d) exchange rate on at
Integral Foreign Operation is translated
14. Cost of inventories of
(a) closing exchange rate
rate during the year
(b) average exchange when the cost of inventory was incurred
that existed
(c) exchange rates
rate
(d) opening exchange is translated at
Value of inventories of Integral Foreign Operation
15. Realizable
rate
(a) closing exchange
rate during the year
(b) average exchange existed when the cost of inventory was incurred
rates that
(c) exchange
exchange rate
(d) opening Operation is
difference of Integral Foreign
16. Exchange
account
transferred to suspense
(a) loss account
transferred to profit and
(b) translation r e s e r v e
transferred to foreign currency operation Account"
(c) investment in Integral foreign
are translated at
to "Net sheet
Operation at the balance
transferred
(d)
17. Monetary items
of Non-integral Foreign
transaction
rate at the date of
(a) exchange
rate
(b) closing exchange
rate during the year
(c) average exchange valuation at fair value translated at
rate on date of balance sheet are
(d) exchange Operation at the
Non-monetary items of
Non-integral Foreign
18.
of transaction
exchange rate at the date
(a)
(b) closing exchange rate
the year
(c) average exchange rate during
rate on date of valuation at fair value
(d) exchange
Foreign Currency Comversion |As PerAS 11- Foreign Branches
25
[Link] difference of Non-integral Foreign Oporation is
(a) transferred to suspense account
(b) transterred to profit and loss account
(c) transterred to foreign currency translation reserve
(d) transferred to "Net investment in Integral foreign operation Account"
20. Any goodwill or capital reserve arising on the acquisition of a non-integral foreign operation is
translatedat
(a) exchange rate at the date of transaction
(b) closing exchange rate
(c) average exchange rate during the year
(d) exchange rate on date of valuation at fair value
21.A contingent liability disclosed in the financial statements of a non-integral foreign operation is
translated at
(a) exchange rate at the date of transaction
(b) closing exchange rate
(c) average exchange rate during the year
(d) exchange rate on date of valuation at fair value

6.2 CHECK YOUR ANSWERS

6.1

1. (d) 4. (6) 7. (b) 10. (b) 13. (d) 16 (b) 19. (c)
2. (a) |5. (b) 8. (b) 11. (a) 14 (c) 17. (b) 20. (b)
3. (a) 6. (b) 9. (a) 12. (a) 15. (a) 18. (b) 21. (b)
 175

ACCOUNTI NG AND
STATUTOR Y REQUIREM ENTS
OF CO-OPERATIVE SOCIETIES

THEORY AND ILLUSTRATIONS

OUTLINE -
No. Topic Page
1. Legal Provisions 176
1.1 Introduction
1.2 Definitions Under MCS Act
1.3 Management and Administration
1.4 Accounting and Finances
1.5 Statutory Formats of Final Accounts of Co-operative Society
2. Co-operative Housing Societies 185
2.1 Definition
2.2 Classification
2.3 . Main Objects
2.4 Area of Operation of the Society
2.5 Accounts
2.6 Expenditure
2.7 Income
2.8 Balance Sheet
2.9 Liabilities
2.10 Assets
2.11 Model Bye-Laws
3. Formats of Final Accounts of Co-operative Housing Society 195
4. Illustrations: Co-operative Housing Society
198
5. Consumer Co-operative Societies
236
5.1 Definition and Objectives
5.2 Categories
5.3 Special Features of Accounting
6. Illustrations : Consumer Co-operative Society
238
7. Illustrations : Credit Co-operative Societies
249
176 Advanced Fi11a11cia/ Acco1111ti11g ([Link]. Part-II: SEM-1//)

1. LEGAL PROVISIONS ]
1.1 INTRODUCTION
Co-operative Societies as form oforganisation doing the business is assuming a growing importance,
next to corporate sector on the Indian economic scene. Co-operative Society is a collective effort of
large number of people, operating in various fi elds ofactivities such as Co-operative Sugar Factories,
Spinning and Weaving Mills, Co-operative Credit Societies, Urban Cooperative Banks, Consumers
Co-operative Societies, Industrial Cooperative Societies, Housing Societies and so on. Maharashtra
is considered as a most progressive state in the development of Co-operative Societies. The Accounting
Procedures and Final Accounts Formats differ from State to State as each State in India has its own
Co-operative Act. Let us study the main provisions of the Maharashtra Cooperative Societies
(MCS) Act, 1960 and the Maharashtra State Co-operative Societies Rules, 1961.

1.2 DEFINITIONS UNDER MCS ACT

(1) Co-operative Society: Under Section 2(27) of the Act, ' Society' means a Cooperative Society
registered or deemed to be registered under this Act which is an autonomous association of
persons, united voluntarily to meet their common needs and aspirations through a jointly owned
and democractically controlled enterprise and adhering to the co-operative principles and values
(as amended vide Amendment Act, 2013). Co-operative Society is corporate body distinct from
its members. Section 167 of Co-operative Societies Act state that provisions of Companies Act
are not applicable to Co-operatives.
(2) Working Capital: Under Section 2(31) of the Act, 'Working Capital ' means funds at the disposal
of society inclusive ofpaid up share capital, funds built up out of profits and money raised by
borrowing and other means. The definition of the term is different as generally working capital
means Net Current Assets represented by current assets less Current liabilities. The audit fees of
certain types of societies such as Urban Co-operative Banks, Salary Earners Credit Societies are
related to the amount of the working capital.
(3) Auditor: Rule No. 69 of Co-operative Societies Rules states that the audit of Co-operative Societies
shall be conducted either by departmental auditor or certified auditors. The term certified auditors
includes the following :
(a) Chartered Accountant
(b) A person who holds a Government diploma in Co-operative accounts and audit
(c) A person who has served as an auditor in the Co-operative department of the State Government
(Retired Officers of the Cooperative department) .
(4) Bye-Laws: Under Section 2(5) as amended by the Amendment Act, 2013 'Bye-laws means
bye-laws consistent with this Act and registered under this Act and/or th e time being in force,
and includes registered am endments of such bye-laws .' Bye-laws of a Co-operative Society may
be compared with the articles of a company. The provisions in the bye-laws cannot be contrary to
the provisions of the Co-operative Societies Act. The bye-laws generally include the following
clauses for internal management of Co-operative Society-
(1) Name and address of society
(2) Area of operation
(3) The manner in which, and the limits upto which the funds of the society should be raised.
(4) Objects of society
(5) Maximum amount of share capital that may held by a member
(6) Terms and qualifications for admission of membership
(7) Rights, duties and liabilities of members
(8) Maximum loan admissible to a member
(9) Disposal of net profit
 nting and Statutory Requirements of Co-operative Societies
,4ccOu 177
Rule no. ~ of Maharashtra State C?•operative Societies Rules, 1961 give the various details of
the items m the bye-laws of the ~oc1ety. An~ amendments, ~hanges or deletion in bye-laws shall
have t_o b~ approved by a_ resol~tton at special general meet mg and also a written approval from
the Oistnct Deputy Registrar 1s necessary. The first bye-laws of the society are required to be
approved by the Registrar, as per Rule No. 9.
(S) co-operative Year: Tl~e Act [S. l 0(a)(iii)] has fixed 31st day of March as the day of balancing
the accoun!s of the society. However, any other day can be fixed by the society for this purp~se
with the pnor a~proval of the registrar. It means that the co-operative year need not necessartly
be from 1st Apnl to 31st March. Normally, now-a-days societies follow 31 March as the year-
ending to conform with the lncome-taix Act. ·
(6) l\1em~er: [Link] Section 2(19) as amended vide Amendment Act, 2013, a member of a ~o-
operattve Society means a person joining in an application for the registration of a Co-opera~ive
society, which is subsequently registered, or a person duly admitted to a membership of Society
after registration and includes an associate, nominal or an active member. Following are th e
different types of members - .
(a) Associate Member: Associate Member' means a member who holds jointly a share of society
with others, but whose name does not stand first in share certificate. ·
(b) Nominal Member: 'Nominal Member' means a person admitted to membership as such after
registration in accordance with its laws.
(c) Active Member: An active member means a member who participates in th~ affairs of th e
society and utilises the min1mum level of services or products of that society as may be
specified in the bye-laws (inserted by Amendment Act, 2013).

1.3 MANAGEMENT ANDADMI I ISTRATION

1.3.1 General Body

General Body of Co-operative Society is described as Final Authority, [Link] S. 72 of the Act, s~b~~~~
to the provisions of the Act and Rules. The following are the some of the important powers exercis
only by the General Body -
(1) Explusion of a member by 314th majority. . . .
(2) Amendment of bye-laws of the society by 213rd majority. However, this 1s subJect to approval
from Registrar. · .
( ) Amalgamation of one society with the other or transfer of assets and liabilities of one society to
3
other society. ..
( ) Adoption of accounts, appropriations of profits as per the prov1s10ns of the act, rules and bye-
4
laws of the society.
· f ·· ffth Bad Debts and Losses as per the Rule No. 49 of M.S.C.S. Rules.
(5) Sanct10n o wntmg o e
1.3.2 Managing Committee
d · the final authority of a society, the whole of the day-to-day
Even though the General ~o ~ 15 . t vests in managing committee, by virtue of Section 73 of the
management ofa Co-oper~tive, oci~ ~ h uld be based on the following principle s-
Act. The managing committee s deciswns s O . .
t the provisions of the Act and Rules and bye-laws of the
(1) Decisions taken are not contrary O ·
society·
· · denve
t f the society and no personal benefi1t 1s · d fr om the
(2) They are taken in the best mteres O ·
d ..
ecisions. . h manner that funds and properties of the society are properly
(3) Financial decisions are taken 111 sue a
safeguarded · . . · d1v1s1on
d to achieve an effective · · · of Iabour, d1·ffi. erent su b-
For the purpose of proper functionm;a:;s Committee, Sales Committee, Price Fixation Committee,
committees are formed, such as ~c Committee etc.
Loan Committee and Stock Valuation .
 178 Advanced Financial Accounting ([Link]. Part-II: SEM-//J)

The administrati ve functions of managing committee includes the following:

(I) Proper custody and maintenance of movable and immovable property belonging to the society.
(2) Proper maintenanc e of accounts relating to financial transactions of the society.
(3) To summon all the meetings including Annual General Meeting and record the proceedings in
respective books.
(4) To keep all the necessary registers and records required by the Act and Rules and bye-laws.
Under Rule No. 58 of M.S. Co-operative Societies Rules, a member is disqualified to be a member
of the Managing Committee if:
(I) He is in default to the society in respect of any dues from him, either as a borrower or as a surety,
for such period as specified by the bye-laws.
(2) He has been held responsible under Section 79 or Section 88 or has been held responsible for
payment of costs of enquiry under Section 85.
(3) A member carrying on business of the kind carried on by the society.

1.4 ACCOUNT ING & FINANCES

1.4.1 Books of Accounts and Records

According to Section 79(1) ofM.S.C.S. Act, (as amended wide Amendment Act, 2013) the Registrar
may direct any society to keep proper books of accounts in such form , including electronic or any
other form as may be prescribed, in relation to:
(1) All sums of money received and expended by the society and the matters in respect of which
receipts and expenditure take place.
(2) All sales and purchases of goods by the society, and of the stock in hand and its valuation.
(3) The assets and liabilities belonging to the society.
(4) He may call the society to furnish such statements and returns and to produce such returns as he
may require from time to time.
Rule No. 65 of M.S.C.S. Rules give a specific list of the following books to be maintained by the
society: (1) Cash Book, (2) General Ledger and Personal Ledger, (3) Stock Register, (4) Property
Register, (5) Register ofaudit objections and their rectifications, (6) Such other accounts and books
as from time to time be specified by the Government.
Broadly speaking, books of accounts should be so maintained as to give the necessary financial,
statistical and other information.
1.4.2 Statutory Registers
Under Section 38 of the Co-operative Societies Act read with Rule No.32, a Co-operative Society
shall have to maintain a Register of Members in ' I ' Form. Nominations should be obtained from the
members. According to Rule No.33 read with Section 39 the list of members shall have to be
maintained in 'J' form.
1.4.3 Returns and Statements
S. .79(1 A), inserted by the Amendmen t Act, 2013 states that - Every society shall file returns within
six months of the close of every financial year to which such accounts relate, to the Registrar or to
the pe~son authorised by him. The returns shall contain the following matters, namely:
(a) annual report of its activities;
(b) its audited statement ofaccounts;
(c) plans for disposal of surplus funds as approved by the general body of the society;
(d) list of amendment s to the by-laws of the society, if any;
(e) declaration regarding date of holding of its general body meeting and conduct of elections when
due;
(f) any other information required by the Registrar in pursuance ofany of the provisions of th is Act.
 . and Statutory Requireme nts of Co-operati ve Societie.-. 179
counting
.Ac , 1·nserted by the Amendmen t Act, 2013 states tha_t - Every society shall •'. 1so . til
d ' _. fi. fi,.om a panel approved by a Stat ' t ea return
79( 1B1,1 the d'
name of the au ,tor orI baud 1tmg •II m G .
5. . . . . , . . . _ . e overnment m
ding o y mectmg togethe, with his written consent w· ith · , _ . d
regar If appomted tn t11e geneta I b d . , a perio
. i,eha , th from the date o f annua I genera o y meetmg. 111
1111s
fone ,non
° Financial Statements
1.4.4 ~:;.=.:.:: .:.:.----- . .
~ to Rule No.61 of M.S.C.S. Rules, the society will have to prepare, within 45 days of the
j\ccor ;::counting year, the following financial statements.
c1ose 0 •pts ·md Payments accounts d unng . ·h . . .
t. e previous year cooperative accountmg year ending
(1) Rece1 '
JlstMarcb. -
The Profit & Loss Account for the year (or Income and Expenditur e A/c).
(!) The Balance Sheet as on that date of accounting year i.e. 31st March .
( \ ¥o.62 of M.S.C.S. Rules deals with the prescribed form of Balance Sheet and Profit & Loss
1
Rll e nt (Form 'N ' ). The financial statemenlts duly prepared in this form are to be laid down before
J\CC:nual General Meeting, which is to be held within three months from the end of accounting ·
th e The registrar may permit a particular society to prepare their financial statements in some other
ra:~; as per the provision of this Rule.
_ .s Ascertainment &Appropr iation of Profits
14
Section 65(1) of the Act, amended in 1985, states that a society shall construct its relevant annual
I. financial statement and arrive at its consequent net profit or loss in the manner prescribed. A Co-
operative Society engaged in a business of Manufactu ring, Trading or Banking should adopt
mercantile system of accounting to arrive at true and fair profits. The law does not mention
anything about the method ofaccounti ng.
2. Section 65(2) states that a society may appropriate its Net Profit to the reserve fund or any other
fund for payment of dividend to members on their shares. No parts of the profits shall be
appropriated except with the approval of the General Body.
3. Section 64 of the Act states that no part of the funds other than the dividend equalisatio n or
Bonus equalisation shall be paid by way to bonus or dividend to its members.
Following discussion is based on the latest official publication of the Co-operat ive Departmen t
viz. Co-operative Audit Manual, 2014 -
Amounts to be Charged to Profit
Rule 49A provides the amounts that are charged to profit and loss account before arriving of net
profit are as under :
I. All interest accrued and accruing on amounts of overdue loans;
2. Interest payable on loans and deposit;
3. Establishment charges;
4. Audit fees, supervision fees , inspection fees ;
5. Working expenses including repairs an d maintenanc e, rent and taxes;
6. Depreciation;
7. Bonus payable to employee under the Payment of Bonus Act, 1965;
8. Provision for payment of Income Tax;
9· Amount to be paid for contributio n to the co-operativ e education and training fund ;
IO. Provision for election_fund for payment of election expens~s;
ll. Provision for bad and doubtful debts;
12 -Provision for share capital redemption fund;
13
· Provision for investment fluctuations fund ;
14
· Provision for retirement benefits to the employees;
15
· Provisions for any other claims admissible under any; other law;
 180 Advanced Financial Accounting ([Link]. Part-II: SEM-//J)

16. Provision for bad debts and revenue losses not adjusted against any fund created out of profi tci·
· 17. Expenses on advertisement not exceeding the prescribed celling limit. '
Rule 51 specifies further amounts to be deducted from profits before arriving at its net profits, in
addition to the amounts already specified in Rule 49A(2). The following amounts are required to be
deducted by a society from its profits.
(i) Contributions to be made to sinking fund or guarantee fund constituted under the provision s of
the Act, the rules of Bye-laws of the society for ensuring due fulfilment ofany guarantee given by
Government in respect of loans raised by the society.
(ii) Provision considered necessary for depreciation in the value of any security, bonds or shares,
held by the society as part of its investments.
(iii) Any provision required to be made for redemption of any share capital contributed by Government
· or federal society.
Profit Appropriation Account: Section 65 and Rule 49A and 51 provides the charges m~de to
profit and loss account, and after arriving net profit how the appropriation of profit ·should be made
is described in Rule 50. After arriving the net profit the profit should be appropriated as below.
Sr. Section Rule Particulars
No.
1 65, 66 Reserve fund not less than 25% of the net profits or as
sanctioned by the Registrar, but not less than 10%.
2 69 Fund created for charitable purposes including relief to the poor,
education, medical relief, and advancement of any other general
.public utility, not exceeding 10% of the net profits.
3 65 Dividend to its members.
4 65 Bonus or honoraria to its members and honorary workers , other
than employees.
5 50 Development fund , Dividend equalisation fund and any other
fund created under bye-laws.

However, Co-operative Societies do not prepare Profit and Loss Appropriation Account. The
above appropriations are shown by the societies, in their 'Plan for Disposal ofSurplus Funds'
in the annual report only.
According to S. 79(1A), introduced by the Amendment Act, 2013 the Annual Return filed by every
society with the Registrar shall contain, interalia, plans for di sposal of surplus funds as approved by
the general body of the society.
1.4.6 Raising of Funds
The funds of the society may be raised in one or more of th e followi ng ways:
(a) by entrance fees,
(b) by issue of shares,
(c) by loans and subsidies,
(d) by deposits,
(e) by voluntary donations, (but not from Transferrer and Transferee),
(f) by contributions towards cost of building or buildings,
(g) by fee on transfer of shares, along with the occupancy right,
(h) by premium on transfer of occupancy right over the fiats,
(i) by and for Election Fund,
(j) by any other mode permitted under these bye-laws.
 (no and Statutory Requirement.\' of Co-operative Societies 181
J1ccoun, .,
Fund
7 Reserve
~.
S . d . .
(1) and (2) state tImt every oc1ety erivmg profits, shall transfer 25 % of the profit to the
66 . , tI1e regi·strar may fix the contribution not
. . o f t I1e Sectton
Section Fund. Accord'mg tot I1e pt·ov1s1on
oeserve 0% Ill . f . I . . d . . ..
I' h 1 some cases o any society 1avmg regar s to its financial position. The section states
5 1
1es h~n fund subject to the Rules made in th is behalf be used in the business or may be invested as
that ti isprovision of Section 70. Rule No. 54 deals with the utilisation and investment of Reserve ·
1 · dd ' · I ·
nd. eThe rule give~ m,od es o f 1'_nvestment m a 1t1on t? t 10~e prescn?cd in Section 70. According
Pert
fu h rule if the society s fund ts equal to or more than its paid up capital , the society can utilise the
101 e am'o unt in the business, with the approval of Registrar. Interest received on investment of
;xc::~e Fund shall be capitalised (added to the Reserve Fund) as per standard accounting conventions.
es the Reserve Fund of the society shall comprise of -
ThUS,
) The amounts carried to t~e said fund , from year to year, out of the net profit of that year, subject
(a to the provisions of Section 66 ( 1) and (2) of the Act;
(b) All entrance fees received by the society from its members;
(c) All transfer fee~ received by the society from its members on trnnsfers of the shares, along with
the occupancy rights;
(d) All premium received_by the society from its members on transfers of their interest in the capital
or property of the society;
(e) All donations received by the society, except those received by it for the specific purpose.
1.4.8 Creation of Other Funds
The society shall create and establish the following funds by collecting contributions from its members
at the rates mentioned hereunder:
1
(a) The Repairs and Maintenance Fund, at the rate fix ed at the general body subject to the minimum
ofO. 75 per cent per annum of the construction cost of each flat , incurred during the construction
of the building of the society a nd ce rtifi ed by the Architect , for meeting expenses of normal
recurring repairs of the society buildings/prop erty.
(b) Major repairs funds , as and wh en required a nd dec ided by th e Gen eral Body at the rate fixed on
area basis.
(c) The Sinking Fund at th e rate decided at th e meetin g of th e genera l body, subject to the minimum
of0.25 per cent per annum of th e con stru cti on cos t of each fl at incurred during th e construction
of the building of the soci ety a nd ce rtifi ed by th e A rchitect, exc ludin g the proportionate cost of
the land.
(d) The Education and Training Fund from contribution by th e members @ t IO per month per
unit or as decided by the General Body.
1.4.9 Utilisation of the Funds by the Society
The society may utilise its fund s in the m a nner indicated be low:
(a) The Reserve Fund of th e soci ety may be utili sed for the expenditure on repairs, maintenance
and renewals of the society 's property. ·
(b) The Repairs and Maintenance Fund m ay be utilised by the Committee for meeting the
expenditure on maintenance of the society 's property and repairs and renewals thereof.
(c) On the resolution passed at th e meeting of the gene ral. Body of the society, the Sinking Fund
may be used by the society for reconstruction of its building/build ings or for carrying out such
structural additions or alteration to the building/build ings, as in the opinion of the Society' s
Architect; would be necessary to strengthen it/ them or for carrying out such heavy repairs as
maybe certified by the Architect and on approval of General Body.
(d) Educatio~ and Training Fund shall be utilised to organise co-operative education and training
for the society's members, officers and employees; and for contribution towards the Education
and Training Fund of the State Federal Societies or State Apex Training Institutes at the prescribed
rates IS. 24A by the Amendment Act, 2013) . ·
(e) Utilisation of all fonds will be with the prior permission of General Body.
 IIJ)
/82 Adva11cetl Fi11a11cia/ A cco1111ti11g ([Link] m. Part-1 1: Sl:,M-

1.4.10 .lnvestment of Surplus Fund

prescribe that the surplus funds
Section 70 as amend ed vide Amemieme11t Act, 2013 and Rule No. 56
in the follow ing manne r:
belong ing to the society should be invested or deposited
ed at least "A" Audit Class in
(l) In a District Centrnl or State Co-opcrntive Bank having been award
the last 3 consec utive years.
Act, 1982.
(2) In any of the Securi ties specified in Section 20 of Indian Trust
with limited liability.
(3) In. Shares , Securi ties, Bonds or Debentures of any other society
l order in that behalf by the
(4) In any other mode permit ted by the rules, or by genera l or specia
Government.
ments are prescribed:
Accor ding to Ruic No. 56 the following additio nal modes of invest
(I) In the case of Prima ry societies in the Centra l Financ e Agencies.
Co-operative Banks .
(2) In the case of Centra l Co-op erative and Urban Banks , in the State
nment Loans .
(3) In the deben tures issued by Land Development Bank of in Gover
l order.
(4) In immov able proper ty specified by Regist rar by general or specia
TIVE SOCIETY
1.5 STATUTORY FORMATS OF FINALACCOUNTS OF CO-OPERA
g Account, which can be prepared
[Notes : (1) Trading A/c : There is no prescribed format for Tradin
riations can be made unless the
in the usual manner. (2) P & L Appropriation A/c : No approp
Hence no P & L Appropriation Ale is
accou nts are audite d and approv ed by the genera l body.
managing committee to the general
prepar ed along with the annua l accounts, submitted by the
indicat es any propos ed approp riation s, a
body for approv al. In case an exami nation problem
prepar ed showin g such propos ed appropriations.
Memo randum P & L Appropriation A/c should be
d in the Balanc e Sheet.]
But such propos ed appropriations should not be adjuste

EXHIBIT 1 : FORMAT OF PROFIT AND LOSS A/C (N TYPE)

This Year's Last Year's Incom e This Year's

Last Year's Expen diture
Figure s Figure s· Figure s
Figure s
i'nP i'nP "nP
~nP
-- -- 1. Interest Received : --
-- 1. Interes t
(a) Paid~ (a) On Loans and
(b) Payable ~ Advances
-- (b) On Investments
-- 2. Bank Charges
-- 2. Dividend Received
-- 3. Salaries and --
Allowances to Staff -- on Shares
-- 3. Commission --
-- 4 . Contribution to Staff --
Provident Fund -- -- 4. Miscellaneous Income
(a) Share Transfer
-- 5 . Salary and Allowances
of Managing Director -- Fees
(b) Rent
-- 6 . Attendance Fees and
Travelling expenses (c) Rebate in Interest
of Directors and (d) Sale of Forms
Committee Members -- (e) Other Items
-- 5. Land Income and
-- 7. Travelling expen ses --
-- Expenditure Accounts
of Staff
-- 8. Rent, Rates and
Taxes. --
-- 9. Postage, Telegram
and Telephone
Charges --
-- 10. Printing and Stationery --
-- 11 . Audit Fees --
-- 12. (Contingencies)
General Expenses --
 unting and Statuto ry Requi . . .
Acco rements of Co-operattve Soc,ettes 183
13. Bad Debts written off
or Provision made for
Bad Debts
14. Depreciation on
Fixed Assets
15. Land Income and
Expenditure Account
16. Other Items
17. Net Profit carried to
Balance Sheet
th other societies wh!ch
Note : In e case of marketing societies, consumer's societies and similar
s, the Profit and Loss Account shall be divided into two parts sh?"".mg
have undertaken tr~ding activitie er's societi~s ,
t. In case of produc
separately the trading accoun t and the Profit and Loss Accoun ken production
s which have underta
proce~sing societies/fore~t labourer's societies and offer societie n.
shall also be prepared in additio
activities, the manufacturing account

i#3=il=iifW=M!·,~(34i;i=i=i••~•i•W#iM#id 1 i•=lzJU1■
-
Figures Llabflltles Figures · Figures .Asset s Figures
for the for the for the for the
Previous Current Previous Current
Year(?) Year(?) Year(?) Year(?)
-- I. Share Capital -- -- I. Cash and Bank --
Author ised : Balances
Shares of ~ ... each a. Cash on Hand
Subsc ribed : b. Cash in Banks
(Distinguishing between (i) Current Account
the variou s classes of (ii)Savings Banks
particulars specified Account
below, in respect of (iii) Call Deposits on
each class) Banks
Shares of .. . each -- II. Investments
Less : Calls in arrears a. Government Securities
Add : Calls in advances b. Other Trustee Securities
-- I-A. Subscription -- c. Non-Trustee Securities
toward s Shares d. Shares of Other
-- II. Reser ve Funds and -- Co-operative Societies
Other Funds e. Shares , Debentures or
a. Statutory Reserve Funds Bonds of Companies
b. Building Funds registered under the
c. Special Development Companies Act
Fund f. Fixed Deposits
d . Bad and Doubtful Debts -- Ill. (1 )Investment of Staff
Reserve Provident Fund
e. Investm ent Depreciation (2)Advances against
Fund Staff Provident Fund
-- IV. Loans and Advances
f. Dividend Equalisation
1. a. Loans
Fund
b. Overdrafts
g. Bonus Equalisation Fund
c. Cash Credits
h. Reserv e for Overdue
(i) against pledge of
Interes t
goods
i. Other Funds
·- [Link] ff Provident Fu nd
-- (ii)clean (of which
overdue ...)
-- [Link] Loans
2. Loans due by Managing
a. Deben tures
Committee Members
b. Loans , Overdr afts a nd
~ ... Loans due by
cash credits from Banks
Secretary and other
c. Loans from Govern ment
employees ~ ...
d. Other Secure d Loans
 SEM-//J)
Advanced Financia/Acco11nting ([Link]. Part-II:
V. Sundry Debtors
V. Unsecured Loans
1 . Cred it Sale s
a. Loan s, Cash cred its
2 . Adva nces
and Over draft s from
3. Othe rs
Cent ral Bank s
[Link] Assets
b . From Gove rnme nt
1. Store s and Spar e Parts
c. From Othe rs
2. Loos e Tools
d. Bills Paya ble
3. Stoc k-in- Trad e
[Link]
4. Work s-in- Prog ress
a. Fixe d Depo sits
VII. Fixed Assets
b . Recu rring Depo sits
a. Land and Build ing
c. Thrift or Saving Deposits
b. Leas ehol ds .
d. Curr ent Depo sits
c. Railw ay Sidin g
e. Depo sits at Call
d. Plan ts and Mac hine ry
f. Othe r Depo sits
e. Loos e Tools , Tackles
g . Cred it bala nce in Cash
and Othe r Equi pme nts
cred it and Over draft
f. Dead stock
Acco unts
g. Furniture and Fittings
VII. Current Liabilities
h. Lives tock
and Provisions
i. Vehicles
a . Sund ry Cred itors
VIII. Miscellaneous
b . Outs tand ing Creditors:
Expenses and Losses
(i) For Purc hase s
1. Good will
(ii) For Expe nses
2. Preliminary Expe nses
inclu ding salaries of
3. Expe nses conn ecte d
staff , rent, taxes , etc.
with the issue of shar es
c. Adva nce, recoveries for
and debe nture s,
the portion for which
including underwriting
value has still to be
char ges , brok erag e , etc.
given , viz. unexpired
4. Deferred Reve nue
subscriptions, premiums ,
Expe nditu re
commission , etc.
[Link] Items
VIII. Unpaid Dividends
a. Prepaid Expe nses
[Link] accrued due
b. Interest accr ued but not.
but not paid
due
X. Other Liabilities (to be
c. Other Items (to be
specified)
specified )
[Link] & Loss Account
X. Profit & Loss Account
Profit for last year
Accumulated losse s not
Less : Appropriations
written off from the
Add: Current Profits
reserve or any other fund
[Link] Losses

)]
ANCE SHEET (N TYPE) [SEE RULE 62(1
EXHIBIT 3: INSTRUCTIONS FOR BAL

Instructions in accordance with which

Instructions in ·accordance with which
assets shou ld be mad e out
Liabilities [Link] be made out
I. Cash and Bank
I. Share Capital
Fixed deposits and Call depo sits with
Contributed by Government and by ers
es Central Banks and other appr oved bank
Co-operative Societies and different class n unde r the head ing
shall be show n should be show
of individual members
"Investments" and not unde r the heading
separately. Terms of red~mption or
e "Cash and Bank Balances ".
conversion of any redeemable preferenc
ld be ment ioned . II. Investments
shares shou
The nature of each investment and the
II. Reserve Funds
mode of valuation (cost of mark et value)
(a) Statutory Reserve Fund and Other of
should be mentioned if, the book value
Reserves and Funds shall be shown than the mark et value ,
a secu rity is fess
separately.
a remark to that effect should be made
(b) Additions and deductions since last
against each item.
Balance Sheet to be shown unde r each
of the specified head .
'ccounting and Statutory Requirement'S ,jrc
11 ' 0J o-operative Societies
185
(c) Funds in the nature of Reserv es and 111. Investment Provident Fund
Fund_~ created out of any profits for Quoted and unquoted securities should be
spec1f1c purpos es should be shown shown separately.
separa tely. IV. Loans and Advances
111 staff Provident Funds
• In case of Central Banks and other
staff Provident Funds and any other Federal societies loans due to societies
insurance_or Bonus Funds mainta ined for and lndlvldual members should be shown
the benefit of the employ ees should be separately.
shown separately. V. --
IV, secured Loans VI. Current AHets
The nature of the security should be Mode of valuation and stock shall be stated
specified in each case. Where loans have and the amount in respect of raw materials
been guar_anteed by Govern ment or State partly finished and finished goods and
Co-operative or Centra l Banks, a mention stores required or consumption should be
thereof ~hould also be made togethe r wiith stated separately. Mode of valuation of
the maximum amoun t of such guarantee. works in progress shall be stated.
Loans fro~ (1) Govern ment, (2) State VII. Fixed Assets
Co-operative Bank or Centra l Bank Under each head of the original cost and
State Bank of India and Other Banks should the additions thereto and deduct ions
be shown separately. therefrom made during the year and total
depreciation written-off or provided up to
v. -- the end of the year should be stated .
VI. Deposits
Deposits from Societi es and Individuals
should be shown separately.
vu. --
VIII. -~
IX. --
X. --
XI. Contingent Liabilities which have not been
provided for should also be mentioned in the
Balance Sheet by way of a footnote.

~~ ~~ -~0-0PERATIYE ·HousiNiG SOCIETIES

•f
1
2.1 DEFINITION
Section 2(16) of the Act tates that - "housi ng society" means a society,
the object of which is to
provide its membe rs with open plots for housin g, dwelling houses
or flats; or if open plots, the
dwelling houses or flats are already acquired, to provide its members commo
n amenities and services.
Under the amend ed definit ion the "Housing Society" also includes
society which provides open
plots to members for housing and where the open plot or dwelling houses
or flats are already acquired,
the Society which provid es its membe rs the common amenities and service
s.
2.2 CLASSIFICATION
Section 2(16) and Rule 1O require the Registrar to classify a Registered Housin
g Society into either
(I) Tenant owners hip or (2) Tenant co-partnership or (3) others. These
classifications have material
bearing on the Balanc e Sheet of "Housi ng Society".
(I) Tenant Ownership Societies : In this case the members are the
owners of the proper ty and they
are in distinc t possession ofa plot with a b~ilding _( dwelling _house/flats)
thereon and subject to
bye-laws they are free to recons truct, repau, ~ebmld , demo~1sh the proper
ty accord ing to their
free will without any interference from the society. However m such cases
the bye-law do provid e
safeguards in the commo n interest of all the members. In the case of such
societies, the Land and
Building do nc,2t appear in the Balanc~ ~beet and the Society merely
owns w~at ~s necess ary for
rendering commo n service and amemt1es such as Gardens, Roads, Street,
L1ghtmg etc. and the
expenditure thereo n is recovered from all the members.
 SEM-11/)
186 Ad,,,mce,I Financial Acco untin g (M. Com. Part- II:
the Society as a whole is in a way the owne r of
(2) Tenant Co-partnership Societies : In this case
the right s and meet all the liabil ities of the
the prope rty sny Land and Build ings nnd enjoys all
t of the numb er of share s held by him in the
society. The mem bers' right is limited to the exten
block or nat or house allott ed to him by the
society besides the undis turbe d enjoyment of the
only formed and can be formed in any of
Society. Tenant co-pnrtnet'ship societies arc most comm
the following ways -
the flats to perso ns who agree to become
(i) Build er develops the land and const ructs and sells
effect is incor porat ed in the agree ment
mem bers of the society. Invar iably a cond ition to this
obtain conv eyanc e from the Build er of the
for sale. The princ ipal object of such societies is to
right. title and intere st in the land and build ing.
ty and then entru st the const ructio n work
(ii) In the altern ative 10 or more mem bers form a socie
paid by the mem bers to the society as
to the Build er at an agree d price which will be
then pays the build er the agree d price. In
contr ibuti ons towa rds cost of flat and the Society
society and is represented on the liability
this case, the land and/o r building as the asset of the
side by mem bers ' contr ibutio n.
ties" and "House Construction Societies"
(3) Othe r Housing Societies : "House Mortgage Socie
e Mort gage Socie ties" the Socie ty invests the
are inclu ded in this category. In the case of " Hous
out of such funds the land and build ing are
funds by lendi ng the same to the members and
the society acts as a mort gage e and on
purch ased/ const ructe d. Till the repayment of loans
ing are trans ferre d (re-c onve yanc ed) to the
repay ment of the loan by mem bers the land & build
on Societies" the build ings are comp leted by
mem bers . Wher eas in the case of" House Constructi
deration is recovered in agree d time from the
the Socie ty at an agree d price and the agreed consi
the "Oth er Societies.
mem bers. In actua l pract ice we rarely come across

2.3 MAIN OBJECTS

ty are as unde r:
The main objects of the formation of a Housing Socie
(Builder), in accor dance with the provi sions of
1. To obtai n conv eyanc e from the owner/ Promoter
, of the right , title and interest, in the land
the Own ershi p Flats Act and the Rules made there under
application for regis tratio n of the Society;
with build ing/b uildin gs thereon as described in the
rty of the society;
2. To mana ge, main tain and admi niste r the prope
society;
3. To raise funds for achie ving the objects of the
nt or joint ly with coop erativ e in stitut ion, social
4. To unde rtake and provi de, for on its own accou
cultu ral or re-creati ve activities;
ment of the objects of the society, as specified
5. To do all thing s, necessary or expedient for the attain
in the bye-laws.

2.4 AREA OF OPERATION OF THE SOCIETY

th e area in which it is located. The Society has to
The Area of Oper ation of the Society is confined to
subm itting its bye-laws for appro val before the
specify its Area of Oper ation in its Bye-laws while
Society. For the societies in Briha n Mumbai,
Regis tering Auth ority durin g the registration of the
ber and Ward in its Bye-laws. For the societies
they have to inser t the City Surv ey Num ber/Oat Num
Survey Num ber/O at Num ber and Muni cipal
located at other place s, they have to insert the City
Corporation/Cit yNill age, Taluka and District.

2.5 ACCOUNTS ·
certain books ofacc ounts . Further, a Co-operative
. Acco rding to Rule No. 65, every society shall keep
Ledger of Loan of Maha rasht ra Hous ing Finance
Housing Society has to main tain (I) a Register and
Engi neer 's Acco unt etc. And (4) a Pass-book to
Society, (2) Dead Stock Register, (3) Cont racto r and
with the society. The object of the co-operative
be given to its mem bers show ing all his trans actio ns
Thus unlik e, the co-operative cons umer 's store ,
housi ng society is not to carry on business for profit.
t & Loss Acco unt but it prepa res Incom e and
a hous ing society does not prepa re Trad ing and Profi
e is sufficient to meet with its expe nditu re or not.
Expe nditu re Account to find out whet her its incom
e & Expe nditu re Acco unt inste ad of the Profit &
A Hous ing Coop erativ e Society can prepa re Incom
,,counting and Statutory Requirements o"C . .
" 0 -operat,ve Soc,ell. /87
'J es
sAfc. As the format for the Income & .
L05 . ty shall be advised for the pu . Expenditure account is not prescribed under the Act, the
5oeie penditure and Income on th~~~~s 0 :bett~r and clearer presentation and
1oe ex O uniformity to classify
owing Imes. (Refor Exhibit t)

~
Classification : A Housing Soeiet h . .
(l ) eads- ( t) Property Expenses· Y s ou_1d classify its expenditure under the followi•ng main ·
h d 2 st
' ( ) E abhshment Expenses and (3) Other
Expens~s cove~ groun rent, Municipal and other property taxes common Expenses. Property
electricity charges,
wa~er c rnrge [Link]~ t7/s, pump maintenance, lift maintenance ~nd Genera
l common amenity
maintenance. t sffa 15f: ment Expenses shall include salaries to office staff.
conveyance, s a we 1 are expenses d printin g & stationery,
. Ed . fu an so on. Other Expenses cover remam ' • •
Donations, ucat,on nd contribution Aud't C'. mg expenses e.g.
, 1 1ees, Ch anty
· etc.
(2) Inc_i~[Link] t; ~HS : The expenses included should pertain to or be inciden
tal to the Society's
act1v1ttes an s ould not be personal in nature [amended Section 81 (2)].
(3) Approval : The expens~s should be approved by the managing committee
or as the case may be,
the General Body as evidenced by duly authenticated, appropriate Minute
s Books.
(4) Prepaid : The prepaid element from the amount spent as Municipal taxes etc.
should be segregated.
(5) Outstandin_g : On the other hand, water charges, ground rent are often outstan
ding at the end of
. the year mamly because of the non-receipt of the bills and a suitable provisi
on should be made.
Amounts payable to the office bearers for honorarium and reimbursement
of expenses incurred
by them should b~ supported by the relevant resolutions passed, documentary
evidence and the
bye-laws. The reimbursement should not be made the source of profit for
office bearers. The
expenses ~uch as travelling allowance, daily allowance, sitting fees for commi
ttee members shall
comply with the Rule 107 A read with Section 16GB.
(6) Sinking/Repairs and Maintenance Funds : The contributions from
members include recoveries
towards Sinking Fund and Repairs & Maintenance fund. These should be
according to the bye-
laws prescribing for such recoveries e.g. In the case of Sinking Fund, the model,
bye-laws stipulates
for the contribution towards the sinking fund @ ¼% of the cost of the flat per
annum from each
member.
(7) Capital Expenditure : Extra care should be taken to ensure that the
expenses of Capital nature
such as Architects' fees, Solicitors bills of cost for conveyancing, expenses
of filling, levelling
are classified as such and are not written off as revenue expenditure.

2.7 INCOME
(1) Classification: Income may be classified into three categories viz. , (I) Collect
ion from members;
(2) Interest & Dividends and (3) Miscellaneous Receipts. Under Collection
from members, the
receipt from members on account of monthly contributions towards expenses,
sinking fund, taxes
etc. shall be included. Interest & Dividends would cover the interest on Bank
Accounts, Dividends
on investments and interest on investments not specifically ear-marked. Miscell
aneous Receipts
normally include parking charges, Penal interest , Income from sale of flowers
, coconuts, fruits
grown in society's garden, sale of scrap, Rent received from non-members,
donations received
without being specifically ear-marked.
(2) Collection from members: On the basis of the expenses, taxes etc. require
d to be incurred/paid
by the society the appropriate amount is collected from each member usu~lly
on the basis ofarea
occupied by the member. Societies often choo~e to segregat~ th~ collection
from members into
distinct heads of expenditure/taxes towards w~1ch .the collect10n 1s made. _I~
such case, the b~oad
category shall be 'Collection from Members which shall ?e t_hen sub-d1v1ded
to show vanous
sub heads such as for Municipal taxes, for Water taxes, for Smk1_ng Fund, for
service charges, etc.
The collection from members should be adequate as compared with the expense
s. The contribution
recovered from members should neither be far in excess of the requirements.
(3) Penal Interest: This interest is earned by the Society on the a~ounts due
from members for a
period exceeding 30 days. This item is to be based on the maximum rate of
interest prescribed .
 /8,V A,Jioam:111/ Fim111ci11/ Accmmt/111( (M. Com. Part-II: SEM-1 //)

b)\.'-hl\\"S , member ·s personal account in the Individual Ledger and lhc appropriate resolution of
the Gcnc.•rnl Bl>dy.
(-') Other lncotnl': lncn111e from 'Non-'.lccupnncy charges·. parking charges. outsiders
occupancy
charge.~ should be as per the n:sl>hll1m1. bye- lnws and the register kepi in this connectio n. The
inc.'lllllc.' from these smirces is normall y credited to the Repairs and Mainten ance Fund Ale.
year, as
(5) E1~1ranct• frrs. Trnnsfrr fees: These depend on the changes in the membership during
on forms received and the
cv1denced by the entries in the Members· Register, the applicati
Resolutions passed. Such receipts are credited to Reserve Fund and not treated as revenue receipts.
This treatment is stipulated by Model bye-laws.

2.8 BALANCE SHEET

Balance Sheet should be in the format as shown in Exhibit 5, as far as possible.

2.9 LIABILITIES
(I) Share Capital:
(a) Awhorised: This is mentioned in the bye-laws of the society.
ive
(b) Paid up: The capital paid by the Government, different classes of members and the co-operat
the
societies shall be shown separately in the Balance Sheet. Every member on his admission to
of the housing society. Thus each member has to
society has to purchase 5 shares of< 50 each
capital contribut ed by all sharehold ers
pay< 250 as his share in capital of the society. The total
forms the total share capital of the society. The subscription received from members for which
the shares are not issued or the resolution is not passed for converting it into the share capital
'
shall be shown separately. This amount should tally with the total of the individual members
balances in register of members in form ' I'. The changes in the share capital arising from transfers,
ns.
admissions, resignations should tall y with the applications for Membership or resignatio
and the appropri ate resolutio ns approvin g
Transfer forms entrance fees and transfer fees received
the admission/transfer/resignation.
(2) Reserve Fund: This fond is made up of Entrance Fees, Transfer Fees, Donations and
transfers
has to pay entrance fees
from the Surplus in the Income & Expenditure Account. Every member
capitalise d
of< 1 or< 5 as decided by the bye-laws of the society. Such entrance fees are usually
and are transferred to Reserve Fund. Section 66 of the Act provides for the compulsory transfer
of at least 25 % of the net profits each year, which may be at a lower rate subject to the direction
of the Registrar. The Reserve fund should be invested according to the provisions of the Section
70 and Section 66(2).
(3) Sinking Fund: The sinking fond is built up from contribution from members to be
utilised for
replacement of the asset or reconstructing the building after its useful life is over. It is basically
meant for recouping the cost of the building which is the main asset in case of housing society.
The fund should be invested in accordance with the provisions of Section 70 of the Act. Interest
d
earned on such ear-marked investment, shall be credited to the Fund account and not be considere
t of the fund, its
as revenue receipt. The Model bye-law 13(b) deals in detail with the treatmen
utilisation, interest earned on ear-marked investment.
(4) Repairs Fund : Repairs fund is built out of the miscellaneous income and/or
members '
fund
contributions. The fund is mainly utilised for carrying major repairs, painting etc. The
in complian ce with Section 70. The
therefore should be invested in medium term investments,
such fund is
fund should not be utilised for day-to-day minor repairs. The expenditure for which
meant should be charged to the Fund and not written off in the Income & Expenditure Account.
(5) Secured Loans (Loan from MCHFSJ:
the case
i) The loans which are secured by the charge on the assets, are included under this head. In
ofthe housing societies very often the loan taken from Maharas htra Co-opera tive Housing Finance
Society Ltd. (MCHFS) appears under this head.
lly.
ii) When._a loan is granted by MCHFS the same is shown as receivable from the members individua
Accolll1li 11g a nd Statutory Requirements <if Co-operative Societies 189

iii) The equated_installment fixed by MCI-IFS is recovered from the members and then pa_id over to
MCHFS while the Rebate allowed by it for the regular payment is credited to members account.
iv) The_ Co-operative Housing Society which intends to borrow loan from t!1e H~using Fin~ncc
society has firstly to purchase minimum one share of~ 500 of the Housmg Fmance Soc1oty.-
Subsequcntl~ when n loan is grunted to a housing society, it has to purchase shares ~f Housing
Financ~ Society, tl~e amot_mt of which should be S% of the loan granted by it. Thus_ 111 Balance
sheet ~t _each hous~ng society, 'Shares of I-lousing Finance Society' is shown as an mve st ment.
The d1v1dend received on such shares is credited to Income and Expenditure Account of the
housing society.
v) Every_Co-operative Housing Society has to give to the Housing Finance Society an ad_v~nce
deposit towards the cost of Solicitors and Architect fees. On receipt of the final bill from soltc1tors
and architect, the surplus amount is [Link] to the society and that account is s~ttled. But_ so
long as the ~ccount is not finally settled, the housing society shows the Deposit with Housmg
Finance Society for Solicitor and Architect fees 011 the assets side of its Balance sheet.
vi) The normal repayment period is 20 years. The loan balance figure revealed in the Balance Sheet
should tally Wtth the total of the balances shown by the member's individual loan accounts, and
the confirmation certificates received from the MCHFS. The equated installments should be
bifurcated into the principal and interest components.
(6) Unsecured Loans: Loan stock Bonds and Deposits are the Items which usually appear under
this head.
(a) Loan Stock Bonds: Contributions from members towards cost of flat are credited to this account.
Whenever the cost of flat is recovered in a lumpsum the society issues to the members the Loan
Stock Bonds. When the cost of flat is recoverable in instalments the society credits the amount so
receivable to the "Loan Stock Bond Suspense Account". At convenient intervals of time the
Society issues loan stock bonds by transferring the amount. The Loan Stock Bond suspense and
the Loan Stock Bond account are included under the "Unsecured Loans".
Some societies prefer to show the amounts recovered towards the cost of the flat under the
account head Advances from member for flats or Members Deposits Against Flats, In such cases
loan Stock Bonds are not issued but the members hold the deposit Receipts with an appropriate
remark thereon. ·
(b) Deposits: The society may borrow from time to time from members and from non-members with
the permission of the Registrar, within the limits placed on the borrowing powers.
The interest rate on such deposits should be within limit set by the bye-laws. The interest payable
on Deposits shall also appear under the head unsecured loans.

2.10 ASSETS
(1) Cash On Hai:id: Rule 107 lays down the maximum amount of cash balance that can be held on
hand by different societies. At present the limit applicable to the housing societies is a meagre
~ 5,000/-.
(2) Investment: Investments should be classified according to the requirements in Form ' N' and the
nature of the investment should be stated along with the mode of valuation The corresponding
interest/dividends should be duly accounted.
(3) Sundry Debtors: The total of the balances recoverable from members is shown under this category.
The balance receivable from members on account of the sinking fund contribution has to be
shown separately.
(4) Fixed Assets: Fixed Assets mainly consist of Land & Building, Furniture and fixtures and Office
equipments. Water pumps and electrical installations maybe merged with cost of Buildings:
(5) ~ncome & Expenditure A/C (Debit Balance): The continued debit balance in this account
indicates inadequate contributions from mei:nbe~s towards the expenses and therefore society
should take action to revise the rates of contnbut10n.
 Adva11ce,I Fi11a11cial Accmmti11g ([Link]. Part-II: SEM-11/)
190

2.11 MODEL BYE-LAWS

The provisions rdnting tl) Accounts contained in the latest Model Bye Luws of Co-operative Housing
Society ns amended by Governme nt of Mnhnrnshtrn vide Amendment Act, 2013 arc summed up
below.
2.11.1 Charges Of The Society Collected From Members
(I) Bye Lnw No. 67 (Composition of the Charges of the Society)
The contributi on to be collected from the members of the Society, towards outgoing and
establishm ent of its fonds. referred to in this bye laws as "The Charges" may be in relation to the
following:
(i) Prope_rty Taxes.
(ii) Water Charges.
(iii) Common Electricity Charges.
(iv) Contributi on to Repairs and Maintenan ce Fund.
(v) Expenses on repairs and maintenan ce of the lifts of the Society, including charges for running
the lift.
(vi) Contributi on to the Sinking Fund.
(vii) Service Charges (see Bye Law No. 68 below).
(viii) Car Parking Charges.
(ix) Interest on the defaulted charges.
(x) Repaymen t of the Installmen t of the loan and interest.
(xi) Non Occupanc y Charges.
(xii) Insurance Charges.
(xiii) Lease Rent.
(xiv) Non Agricultur al Tax.
(xv) Education and Training Fund(@ ~ 10 per member).
(xvi) Election Fund.
(xvii) Any Other Charges.
(2) Bye Law No. 68 (Break-up of Service Charges of the Society)
The Charges of the Society referred to at (vii) above shall include the following:
(i) Salaries of the Office Staff, Liftmen, Watchmen, Mali and any other Employee of the Society.
(ii) Where the Society has independe nt Office, the property taxes, electricity charges, water
charges etc. for the same.
(iii) Printing Stationery and Postage.
(iv) Travelling Allowance and conveyance charges to the staff and the members of the Committe e
of the Society.
(v) Sitting fees paid to the members of the Committe e of the Society. .
(vi) Subscription to the Education Fund as per S. 24A of the Act.
(vii) Annual Subscription of the Housing Federation and any other Co-operat ive Institution .
(viii) Entrance fees for affiliation to the Housing Federation and any other Co-operat ive Institution.
(ix) Audit fees for internal, Statutory and Re-audit, if any.
(x) Expenses incurred at meetings of the General Body, the Committe e and the Sub- Committee,
ifany.
(xi) Retainer fees, legal charges, Statutory, enquiry fees [except legal charges, of any disputes/
litigation between member to member or member and their family in which society is a party,
required to be charged to the member(s)].
(xii) Common Electricity Charges.
 .,
iccounting and Statutory Requirement.. ,~{ Ct>-o/wratl11t.1 Sm:lt!tie.'> 191
(xiii) Any other charge.-. approved by th c Ckncrnl Body by 2/Jrcl Mnjorit y nt it11 Meetin g. I lowcvcr
such Charges should 1101 co111rndh:1 the prnvisions or the Act, Rul c11 nnd byc•luwHof th e
Society.
.,) nye Law No. 69 (Sh11rlnt,t of th(• Society ChnrJlcN hy 11H' Mcmhcn1) . . .
' The o,m1nith..-c ~hnll npportion thc Shure of each Member towards th e churges of th e Society on
the following bnsis-
(i) Pmpa~r Taxes: As tixcd by the Local Authority.
(i i) ll ,11t•r Clu11~cs: On the bnsis oftotul number and size of inlets provided in cuch nat. (When
Municipal Corporation decides Ch urges ns per Flat then Per Flat equally to be charged).
(iii) fape11ses 011 t'l!pairs and mai111e11ance of building of the Society : Al the rate fixed at th e
General Body Meeting from time to time, subject to the minimum ofO.75 percent p~r annum
of the construction cost of each flat for meeting expenses of normal recurring repairs.
(M Expenses 011 repairs and maintenance of the lift, including charge_s for ru~ning the lifi:
Equally by all the members of the building in which ti ft is provided, irrespective of the fact
whether they use the lift or not.
(I) Si11ki11g Fund: As provided Under the bye-law No. I3(a) i.e. ¼ percent p.a. of built-up cost of
flat.
(vi) Service Charges: Equally divided by number of flats .
(vii) Parking Charges: At the rate fixed by the general body of the society at its meeting under
the bye-law No. 84/85.
Bye-Law No. 84: Every Member, who has been allotted the stilt or the parking space shall be
required to pay the parking Charges at such rate as may be decided by the General Body of
the Society at its meeting, irrespective of the fact whether he actually parks his motor vehicle
or not. Where a Member has been allotted more than one stilt / parking space, he shall pay
parking charges in respect of every such stilt or parking space, as decided by the General
Body Meeting.
Bye-Law No. 85: Every Member, having a Scooter, a Motor Cycle, or an Auto Rickshaw shall
obtain prior permission of the Committee for parking his vehicle in the Compound of the
Society and pay the Charges fixed by the General Body of the Society of at its meeting.
(vi ii} Interest on Delayed Payment of Charges: At the rate fixed under the Bye-Law No. 72 to be
recovered from the defaulter Member.
(ix} Repayment Of The Installment Of The Loan And Interest: The amount of each installment
with interest fixed by the financing agency.
(x) Non-occupancy Charges: At the rate fixed under the bye-law No. 43(2)(iii)(c).
Bye Law No. 43(2) (iii) (c): He shall pay Non-Occupancy charges to society. Non Occupancy
charges shall be charged in accordance with the circular issued by the Govt. of Maharashtra
Commissioner for Co-operation from time to time (at 10% of service charges, at present) and
shall not be levied if the flat is occupied by the Family of the Member as defined under these
bye laws. Subletting cari be restricted for 11 months by the Managing Committee. Non-
occupancy charges shall not be levied to the flat purchaser who is intending to become a
Member and who submits the documentary evidence thereof.
(xi) Insurance Charges: Built up area of each flat, provided that if there is increase in the insurance
premium due to Storing any specific goods in any flat, used for commercial purposes, the
~xtra burden of insurance premium shall be shared by those who are responsible for such
mcreased premium in proportion of the built up area to their flats.
(xii) Lease Rent: The built up area of each flat.
(xiii) Non Agriculture Tax: The built up area of each flat.
(xiv) Any Q_ther Charges: A_s m~ybe decided_by the General Body of the Society at its Meeting,
e.g. audit charges; Contnbution to Education Fund, etc.
(The Committee shall fix in respect of every flat the Society Charges on the basis laid down
under bye law No. 69(a)).
~ 191
AflM11ce,I Fi11a11ch1/ Accmmtl11g ([Link]. Part-JI: SEM-IJJ)
bill
(4) Bye Law No. 70 (P11~1ment of Society Chnr~cs): Tlw Secretary of'the Society. shall prepare
the
/ d..;mnnd notice in rcspcd of the Chnrgcs of the Society payable by members on the basis of
the members on or before the date fixed by the
Bye Lmv no. 69(11) and issue the same to 1111
Commirtcc in that hehnlt: Every member or the Society shull puy the amount mentioned in
the
hill/ demand nnd notkc in fllll within such period ns mny be fixed by the Committ ee.
to have
(S) lly Luw No. 71 (Rc,1kw of cnsc In rlcfuult of 1>aymc11t): A Member shall be deemed
1..'ommi1ted default in payment of the charges or the Society, if the payment mentione d in the
demand notice bill is 1101 made within the period as prescribed under section 73FF( c) of the
Act.
The Sl.-crcrnry of the Society shall bring the cases of defaults in payment of the Society's Charges
10 the Notice of the Committee for taking [Link] necessary action
. On the death of the defaulter
or
member oft he society. the dues can be recovered from the legal heirs of the deceased member
from the occupant of the flat.
(6) Bye Law No. 72 (Interes t on the defaulted charges): A member shall be required
to pay simple
the
interest at such rate as is fixed by th e General Body of the Society at its Meeting, subject to
charges of the Society, from the date the amount was
maximum of2 I percent per annum, on the
Law
delayed till its payment not paid by the member within the period as prescribed under Bye
No. 70.
2.11.2 Accounting Procedure
(1) Bye Law No. 142 (Books, Records & Registers)
The Society Shall maintain the following books ofaccounts, records and registers:
(i) The Register of Members in "I' Form, prescribed under Rule 32 of the Rules.
(ii) The List of Members in 'J' Form, prescribed under rule 33 of the rules.
(iii) The Cash Book.
(iv) The General Ledger.
(v) The Personal Ledger.
(vi) The Sinking Fund Register.
(vii) The Audit Rectification Register in "O" form, prescribed under Rule 73 of the Rules.
(viii) The Investment Register.
(ix) The Nomination Register.
(x) The Society I Members Loan Register / Mortgage Register.
(xi) Minutes Book for the meetings of the Committee of the Society.
(xii) The Minutes Book for the meetings of the general body of the Society.
(xiii) The Property and Furniture, Fixtures and Office Equipment Register.
(xiv) Structural and Fire Audit Register and Lift Inspection Record.
(xv) The Register of Nominal Members (Tenant Occupants).
(xvi) The Register of Active Members.
employee ,
(2) Bye Law No.145 (Maximum Cash Balance): The Secretary of the Society or the paid
at the Close of
authorised by the Committee in that behalf, may retain in his personal custody,
every day, a sum, not exceeding t 5,000, for petty expenses . If due to unavoidable circumstances
the cash on hand has exceeded the above limit, the excess cash shall be credited in to the bank
within the next 3 days by the Secretary or any other person authorised by the Committee to keep
cash on hand.
(3) Bye Law No. 146 (Cheque Payments): All payments in excess of~ 1,500/- shall
be made by
means of crossed Ne. payee's Cheque.
(4) Bye La:w No. 147 (Final Accounts and Returns)
(i) Within 45 days of the close of every Co-operative year, the Secretary of the Society
or any
other person, authorised by the Committee in that behalf, shall finalize the accounts of the
preceding co-operative year, prepare the Receipts and Payments Statement the Income and
Expenditure Statement for the said year and the Balance Sheet as at the clos~ of the said year
in the forms prescribed under rule 62(i) of the Rules, along with the list of members, as at the
 . Societies
;no and Statutory Require me•11 ts. '~f Co-operative 193
~cco11nt ~
Close of thedpreceding
.
co-opcr at'ivc ycur, with . c · t
. ., amounts to their credit m the Share ap1ta
acco~nt ant d;posits, if any. the schedules of investments the debtors the creditors, the
furmtur~, ~ 1e 1xtures and the ofticc equipments etc. ' '
ln ca~e it 1~ not possible to finalize the annual Statements of Accounts within the period
111ent1oned_ th e bye-law No. l 47(a), the extension of time to conduct AGM at later date shall
111

be sought tor ~mder Ruic 61 of the Rules, from the Registering authority, by furnishing a copy
of the r~solution of the Committee meeting explaining the reasons for the delay.
(ii) Th~ society shall prepare and file annual returns as prescribed in the Act and the Rules. The
soc1et~ shall file am~ual returns on or before 30th September of every year to the Registrar
includmg the followmg matters, namely-
(a) Annual reports of Societies activities·
'
(b) Societies audited statement of accounts·
'
(c) Plans for surplus disposal as approved by the general body of the society;
(d) List of amendments to the bye-laws of the society, if any;
(e) Declaration regarding date of holding ofits general body meeting and conduct of elections
when due; . .

(f) Any other information required by the Registrar in pursuance of any of the provisions of
the Act.
(iii)Every society shall also file a return regarding the name of the auditor or auditing firm from I
a panel approved by a State Government in this behalf, appointed in the general body meeting 1
together with his written consent within a period of one month from the date of annual general
body meeting. \
(iv)Ifthe Society fails to intimate and file the returns as provided by section 75(2A) and section \
79(1B), the Registrar may cause Societies accounts to be audited by appointing an Auditor
'
from the panel of Auditors.
(5) Bye Law No. 148 (Security): Every paid employee holding any office in the Society and handling
cash and or securities of the Society, shall furnish such security, as is provided under Rule I 07B
of the Rules.
\
(6) Bye Law No. 149 (Appropriation of Profits):
(a) After providing for the interest upon any loans and deposits and after making such other
deductions as required under Section 65(1) and 66 of the MCS Act 1960 and Rule 49A of
MCS Rules 1961, Twenty five percent (25%) of the net profit of all the business carried on by
or on account of the society, shall be placed at the credit of the Reserve Fund of the society.
(b) The remaining seventy five percent (75%) of the net profit of the society shall be utilised as
provided under Rule 50, 51 , 52, 53 ofMCS Rule I 961.
(i) To pay dividend not exceeding 15 percent per annum , upon the paid up share capital at
such rate as the Committee may recommend and the annual general body meeting may
approve. The dividend on shares shall be paid to the registered holders of such shares
according to the books of the society as on the last day of the preceding co-operative year.
(ii) To pay honorarium to office-bearers of the society not exceeding fifteen percent 15% or
as decided by the General Body Meeting of the net surplus to reward them for the sacrifice
of their valuable time for the working of the society.
(iii) To allocate to a common welfare fund, such part of the profit as the annual meeting of the
general body may determine, to be utilised in furtherance of the objects specified in the
bye-law No. 5(d).
(iv) The balance, if any, shall be carried forward or dealt with in such manner as the annual
general body meeting, on. the recommendations of the Committee, may determine.
(7) Bye laws No. 150 and 151 (Writing off unrecoverable dues): Bye Law No. 150, states that
subject to the bye-law No. 151 , the society may write off Society's charges due from the members
~he expenses incurred on recovery thereof ~nd the accumu~ated losses, which are certified a~
irrecoverable by the Statutory Auditor, appomted under section 81 of the Act.
/94 Advam:ed Fi11a11cia/ A~co,mti11g (M. Com. Part-II: SEM-IJJ)
Bye Law No. 151 states that the amounts mentioned in the bye-law No. 150 shall not be written
off unless:
(i) the meeting of the general body of the society hns given due sanction for writing off the
amounts:
(ii) the approval of the financing agency to the writing off of the amounts, if the society is indebted
to it.
_(iii) the approval oft he Registering Authority is obtained.
Provided that, if the society is affiliated to the District Central Co-operative Bank or any other
financing agency but is not indebted to it the permission of the Bank or the financing agency is
not necessary,
Provided forther that, if the society is classified as A or Bat the last Audit, no such permission of
the Bank or the financing agency or the Registering Authority ·is necessary, if there is sufficient
balance in the bad debt fond, specially created for the purpose to cover the amount proposed to
be written off.
(8) Bye Law No. 158(1) (One Time Expenditure on Repairs):
(a) The Committee shall be competent to incur expenditure on the repairs and maintenance of
the society's property once in a financial year, the onetime expenditure does not exceed:
Upto 25 members t 25,000/-
26 to 50 members t 50,000/-
51 and above Up tot 1,00,000/-
(b) If one time expenditure on repairs and maintenance of the society's property exceeds the
limits as mentioned under bye-law No. 158( a) prior sanction of the meeting of the general
body of the society shall be necessary.
(c) The meeting of the general body of the society shall decide the limit up to which the expenditure
on repairs and maintenance of the property of the society could be incurred by the Committee
without calling for tenders for the work. In respect of the work, the cost of which exceeds the
limit, so fixed, the Committee shall follow the procedure of inviting tenders, placing them
before the general body meeting for approval and entering into contract with the architect (if
appointed) and the contractor.
(9) Bye Law No. 160 (Repairs):
(a) Repairs By Society: The following repairs and maintenance of the property of the society
shall be carried out by the society at its costs:
(i) All internal roads,
(ii) Compound walls,
(iii) External water pipe lines,
(iv) Water pumps,
(v) Water storage tanks,
(vi) Drainage lines,
(vii) Septic tanks,
(viii) Stair cases,
(ix) Terrace and parapet walls,
(x) Structural repairs of roofs ofall flats,
(xi) Staircase lights,
(xii) Street lights,
(xiii) Outside walls of the building/buildings,
(xiv) All leakages of water including leakages due to rain water, and leakages due to external
common pipe line and drainage line,
(xv) Electric lines up to main switches in the flats
(xvi) Lifts,
 --
,4ccounting a11d Stat11tory Req11ire111ents of Co-operative Societ •, .
le ,\ 195
(xvii) The d~maged ceiling nnd plnster th ereon in the top floor fli
of the nun water through the terrnce. lts, on account of the leakage
(xviii) Generator s,
(xi x) Securit y Appliances (CC TV, Int ercom, Group Mobile, Siren Bell)
(xx) Rnin Water Harvestin g,
(xxi) Sewerage , Storm water Drain & Water Treatm ent Plant
(xx iHi) Common areas not specifically allotted , Swimming Pool , Gym, Sauna Bath, Coffee
ouse
(xx iii) Common Pa rking Space (xxiv) Solar and alternate energy resources.
(xxv) Garden
(xxvi) Communi ty hall
(b) Repairs by Member: All the repairs, not covered by the bye-law No. l 60(a) shall be carried
out by the members at their cost The expenditu re of the internal leakage due to toilet, sink
etc. should be borne by concerned flat holders, with the consent of the society.

FORMA TS OF FINAL ACCOUNTS OF CO-OP,ERATIVE)l

', . .,. ,l
H0USING
;. .;-

soc,l;TY

EXHIBIT 4: FORMAT OF INCOME AND EXPENDITURE ACCOUNT

XXXXX CO-OPERATIVE HOUSING SOCIETY LIMITED

Dr. Income and Expenditure Account Cr.
Expenditure , '(
0
" • Income
1. PROPERTY EXPENSES 1. COLLECTION FROM
(Out of Society Charges) MEMBERS
Property Taxes [Society Charges]
Water Charges Property Taxes
Electricity Charges Water Charges
Repairs and Maintenan ce Fund Electricity Charges
Expenses on Lifts Repairs and Maintenan ce Fund
Contribution to the Sinking Fund Expenses on Lifts .
Parking Charges Contribution to the Sinking Fund
Interest on the Defaulted Charges Parking Charges
Repayment of Loan Installmen t Interest on the Defaulted Charge~
Interest Repayment of Loan Installmen t
Non Occupanc y Charges Interest
Insurance Charges Non Occupanc y Charges
Lease Rent Insurance Charges
Non Agricultural Tax Lease Rent
Any Other Charges Non Agricultural Tax
Education and Training Fund
Election Fund
Any Other Charges
2. ESTABLISHMENT EXPENSES 2. COLLECTION FROM
(Out of Service Charges MEMBERS
Collected) [Service Charges]
Salaries Salaries
Office Taxes and Expenses Office Taxes and EJ<penses
Printing, Stationery and Postage Printing, Stationery and Postage
Conveyan ce Conveyan ce
Sitting Fees Sitting Fees
Subscription to Education Fund Subscription to Education Fund
Subscription of HF/ Co-op. lnsL Subscription of HF/ Co-op. Inst.
, 196 Advan ced Finan cial Accou nting (M. Com. Part-I I: SEM-IJI)
Entrance fees of HF/ Co-op. Inst. Entrance fees of HF/ Co-op. Inst
Audit Fees Audit Fees
Meetings Expenses Meetings Expenses
Other Fees Other Fees
Common Electricity Charges Comr:non Electricity Charges
Any Other Charges Any Other Charges
Housekeeping 3. INTER EST AND DIVIDENDS
Security Interest - Savings Bank
Accounting Charges Interest - Fixed Deposit
3. OTHE R EXPEN SES Dividend
Depreciation 4. OTHER INCOME
Provision for Tax Transfer Fees
Tower Rent
Sale of Scrap
SURP LUS / (DEFIC IT)
TOTAL TOTAL
and Loss Accou nt which is not
Note : The statuto ry form 'N' in the Act gives the format of Profit
diture Account. The classification
applic able to Housin g Societi es which prepar e Incom e and Expen
Bye-la ws (67 - 69). It is not
of expens es and incom e in the above format is based on the Model
collect ions and corresp onding
manda tory under the Statuto ry Form 'N'. However, it helps to match
expens es.

EXHIB IT 5: FORMAT OF BALANCE SHEE T

Ljaefilities , Ass,ts · 1
I. Share Capita l I. Cash and Bank Balanc es
Author ised : a. Cash on Hand
xxxx Shares of ~ 50 each b. Cash in Banks
Subsc ribed : Current Account
xxxx Shares of ~ 50 each Savings Banks Account
Less : Calls in Arrears Call Deposits on Banks
Add : Calls in Advances II. Invest ments
I-A. Subsc ription toward s Shares Government Securities
Other Trustee Securities
II. Reser ve Funds and Other Fundi
Statut ory Reserv e Fund - Non-Trustee Securities
Shares of Other Co-operative
Openi ng
Societies
Entrance Fees
Share of MDC Co-op. Bank
Transf er Fees
Premium on Transfers Share of MDCH Federation
Interest on Fund FD Shares , Debentures or Bonds of
Sinkin g Fund - Openi ng Companies
Addition to Sinking Fund Fixed Deposits
Fixed Deposits - Sinking Fund
Interes t on SF FD
Fixed Deposit - Repairs Fund
Repai rs Fund - Openi ng
Fixed Deposit - Major Repairs
Additio n to Repairs Fund
Fund
Interes t on Repairs Fund FD
Ill. Staff Provid ent Fund
Less: Expen ses
Investment of Staff Provident
Other Fund - Openi ng
Fund
Additio n
Advan ces against Staff
Interest on Fund FD Provident Fund
Memb ers Contribution for Building
IV. Loans and Advan ces
Ill. Staff Provid ent Fund Loans
IV. Secur ed Loans
Overdrafts
Deben tures
Cash Credits
Loans, Overdrafts and Cash
Staff Advan ce
Credits from Banks
Prepaid Expenses
Loans from Gover nment
Other Secured Loans V. Sundr y Debto rs
Accounting and Statutory Req.11ireme11ts ,~f Co-operative Societie.'t
unsecured Loans
v. Loans , Cash Credits and Credit Sales
Advances - Staff
overdrafts from Central Banks
From Government Receivable from Builder
Dues from Members
From Others
Property Tax Refund due from
Bills Payable
BMC
VI, oeposlts VI. Current Assets
Fixed Deposits
Stores and Spare Parts
Recurring Deposits
Loose Tools
Thrift or Saving Deposits · . Stock-in-Trade
current Deposits
Works-in-Progress
Deposits at Call
[Link] Assets
Other Deposits Land and Building
Credit balance in Cash Credit Leaseholds
and Overdraft Accounts Railway Siding
Security Deposits from Members Plants and Machinery
Electricity and Water Deposit Equipments
VII. Current Liabilities and Less : Depreciation
Provisions Water Pump
Outstanding Creditors : Purchase~ Less : Depreciation
Outstanding Creditors : For Borewell
Expenses Depreciation on Borewell
Advance from Members Furniture and Fittings
Income Received in Advance Depreciation on Furniture
Property Tax Refund Payable Deadstock
to Members Livestock
VIII. Unpaid Dividends Vehicles
IX. Interest accrued due but not VIII. Miscellaneous Expenses and
paid Losses
X. Other Liabilities Goodwill
XI. Income & Expenditure Account Preliminary Expenses
Surplus for Last Year Expenses on Issue of Shares
Less : Appropriations and Debentures
Add : Current Surplus / (Deficit) Deferred Revenue Expenditure
Building Renovation Expenses
IX. Other Items
Interest Accrued but not due
Other Items
Electricity Deposit
Water Deposit
X. Income & Expendiure Account
Accumulated Losses not
written off
XI. Current Losses
Total Total

Note: The main heads in the above Balance Sheet are based on the Statutory Format 'N' . In case of
NIL balances, students have the option to show or ignore those heads.

EXHIBIT 5: FORMAT OF MEMORANDUM APPROPRIATION ACCOUNT

Plan for Disposal of Surplus Funds [S. 79(1A)(c) / Bye-law No. 147)
Dr. Memorandum Appropriation Account Cr.
-
~rticu/ars ( Particulars ; ~
To Statutory Reserve (25%} By Balance b/d
To •·· Reserve / Fund By Surplus (Current Year)
To Balance c/d -
'Total Total
'
198 Advanced Financial Acco11nting ([Link]. Part-II: SEM-111)
Note : No appropriations cnn be mudc un less th e accounts are audited and approved by the general
body. Hence no P & L Appropriation Ale is prepared along with th e annual accounts, submitted by
the managing committee to the general body for approva l. In case an examin ation problem indicates
any proposed appropriatio ns. n Mcmornndum p & LAppropriation A/c should be prepared as above
showing such proposed npproprin tions. But such proposed appropriations should not be adjusted in
the Balance Sheet. It is shown only in th e Annual Return fil ed with the Registrar for 'Plans for
Surplus Disposal' as approved by gimcral body vide S. 79( 1A)(c) / Bye-law No. 147.

Illustration 1 :
From the following trial balance as on 31-3-2015, prepare final accounts in the prescribed format as
per applicable legal provisions.
EVERSHINE CO-OP. HOUSING SOCIETY LTD.
Dr. Trial Balance Cr.
....
Particulars r, Particulars r
Cash on Hand 3,995 Collection from Members -
Cash in Ban ks 93 ,144 Property Expenses 37,056
Dues from Members 52 ,903 Collection from members -
Water Pump 4,113 Service Charges 5,140
Deposits for Electricity 595 Members Deposit 7,100
Deposits for Water 380 Interest - FD 3,017
Property Taxes 10,346 Interest - SB 1,005
Water Charges 7,513 Sinking Fund - Balance b/d 34,560
Common Electricity Charges 10,240 Statutory Reserve Fund -
Subscription to Election Fund 36 Balance b/d 38,470
Office Expenses 3,425 Subscribed Share Capital :
Printing and Postage 776 60 Shares of < 50 each 3,000
Conveyance 570 Surplus fo r Last year 74 ,038
Subscription of Housing Federation 500
Audit fees 1,000
Security Charges 13,850
2,03,386 2,03,386
Additional Information :
1. Authorised Share Capital : 2,000 Shares of< 50 each
2. Depreciation on water pump @ 15%.
3. Collection from members for service charges include -
(i) Entrance Fees < 100
(ii) Contribution for Sinking Fund < 1,440
Solution:
EVERSHINE CO-OP. HOUSING SOCIETY LTD.
Dr. Income and Expenditure Account Cr.
,Expenditure .. Income
1. PROPERTY EXPENSES 1. COLLECTION FROM
Property Taxes 10,346 MEMBERS
Water Charges 7,513 Property Expenses 37;056
Common Electricity 2. COLLECTION FROM
Charges 10,240 28 ,099 MEMBERS
2. ESTABLISHMENT Establishment
EXPENSES Expenses
Office Expenses 3,425 Vide T.B. 5,140
Printing and Postage 776 Less : Entrance Fees (100)
Conveyance 570 Less : Sinking Fund (1,440} 3,600
Accounting and Statutory Requirements of Co-operative Societies 199
Election Fund 36 3. INTEREST AND
Subscription of Hsg. Fed. 500 DIVIDENDS
Audit Fees 1,000 Interest - SB 1,005
security Charges 13.850 20,157 Interest - FD 3,017 4,022
3. OTHER EXPENSES
Depreciation 617
4. SURPLUS / (DEFICIT) (4 ,195)
TOTAL 44,678 TOTAL 44,678

Balance Sheet

LJsblllties r r As~ets r ,, I• • r I
i,"" Share Capital I. Cash and Bank Balances
Authorised : a. Cash on Hand 3,995
2,000 Shares of~ 50 each 1 00 000 b. Cash in Banks 93.144 97,139
Subscribed : II. Investments Nil
60 Shares of ~ 50 each 3,000 Ill. Staff Provident Fund Nil
1-A. Subscription towards Shares Nil IV. ·Loans and Advances Nil
11. Reserve Funds and Other Funds V. Sundry Debtors
Statutory Reserve Fund Dues from Members 52 ,903
Opening 38,470 VI. Current Assets Nil
Entrance Fees 100 38,570 [Link] Assets
Sinking Fund Water Pump 4,113
Opening 34,560 Less : Depreciation (617) 3,496
Addition to SF 1 440 36,000 VIII. Miscellaneous
[Link] Provident Fund Nil Expenses and Losses Nil
[Link] Loans Nil IX. Other Items
V. Unsecured Loans Nil Deposits for Electricity 595
VI. Deposits Deposits for Water 380 975
Members Deposit 7,100 X. Income and Expenditure
VII. Current Liabilities .Account Nil
and Provisions Nil XI. Current Losses Nil
VIII. Unpaid Dividends Nil
IX. Interest accrued due
but not paid Nil
X. Other Liabilities Nil
XI. Income & Expenditure
Account
Surplus for Last year 74 ,038
Less : Appropriations Nil
Less : Current Deficit (4,195) 69,843
Total 1,54,513 Total 1,54,513

Illustration 2 :
From the following trial balance as on 31 -3-2015, prepare final accounts in the prescribed format as
per applicable legal provisions.
JAY NIWAS CHS LTD.
Dr. Trial Balance Cr.

~rticu/ars r Particulars ·
l

Accounting Charges 5,000 Collection for Property Expenses 86,662

Accumulated Losses not written off 2,62,532· Collection for Establishment
Audit Fees · 750 Expenses 23,040
BMC Deposit for Water 1,664 Statutory Reserve Fund - Opening 3,99 ,773
BSEs Deposit 1,195 Entrance Fees 170
Cash in Banks 3,51,595 Interest - FD
44,503
Cash on Hand 5,443 Interest - SB
10,750
Clubhouse Expenses 35 ,020 Outstanding Expenses
9,950
tlectricity Charges 18,070 Redevelopment Charges
3,00,000
 ltHJ , f,/wm<'t11/ H11,md ,1/ ,,fr emmt/11}( (M. Cmn. /J11rt-/ I : SEM-JIJ)

Duos ft(\rn Members 03 ,8 17 Subscrfbod Capital :

IMumnce Chn~ O-S 14 ,6 15 60 Sho res of '{ 50 ooch 3,000
StmChJtul Audit Foos 14,760 Tra nsfer Foos 90
Postago 1,679
PropMy 't..'lxes 9,4 10
A()p.,irs crnd Mi, lnronnnco 49 ,723
Sol3riM 6,000
Corweyance 500
Wnter Charges 16,175
8,77,938 8,77,938

Addltlonal Information :
1. Authorised Share Capital: 2,000 Shares of ~ 50 each.
2. Pre-paid Insurance - ~ 11 ,242
3. Redevelopmen t charges collected from members are to be refunded to members.
Solution :
JAY NIWAS CO-OP. HOUSING SOCIETY LTD.

Dr. Income and Expenditure Account Cr.

Expenditure t r Income r r
1. PROPERTY EXPENSES 1. COLLECTION FROM
Prope rty Taxes 9,4 10 MEMBERS
Water Charges 16,175 For Property Expenses 86 ,662
Electricity Charges 18,070 2. COLLECTION FROM
Repairs and Maintenance 49 ,723 MEMBERS
Insurance Charges For Establishment Expenses 23 ,040
- Vide T. B. 14,615 3. INTEREST AND DIVIDENDS
- Less : Prepa id {11 ,242) 3,373 Interest - SB 10,750
Club-H ouse Expenses 35 ,020 Interest - FD 44,503 55 ,253
2. ESTABLISHMENT EXPENSES 4. OTHER INCOME Nil
Sala ri es 6,000
Postage 1,679
Con veyance 500
Audit Fees 750
Structural Audit Fees 14,750
Accounting Charges 5,000 28 ,679
3. SURPLUS/ (DEFICIT) 4,505
TOTAL 1,64 ,955 TOTAL 1,64,955

Balance Sheet

Liabilities
- r r. Assets t t
I. Share Capital I. Cash and Bank Balances
Authorised : a. Cash on Hand . 5,443
2,000 Shares of ( 50 1,00 ,000 b. · Cash in Banks 3,51 ,595 3,57 ,038
Subscribed : II. Investments Nil
60 Shares of ( 50 each 3,000 Ill. Staff Provident Fund Nil
I-A. Subscription towards Shares Nil IV. Loans and Advances
II. Reserve Funds and Prepaid Insurance 11 ,242
Other Funds V. Sundry Debtors
Statutory Reserve Fund Dues from Members 83 ,817
Open ing 3,99 ,773 VI. Current Assets Nil
Entrance Fees 170 VII. Fixed Assets Nil
Transfer Fees 90 4,00 ,033 VIII. Miscellaneous
Nil Expenses and Losses Nil
[Link] Provident Fund
[Link] Loans Nil IX. Other Items
V. Unsecured Loans Nil BSES Deposit 1,195
VI. Deposits Nil BMC Deposit for Water 1,664 2,859
r ting and Statutory Requirements of Co-operative Societies
,4cco11 n . 201
current Llabllltles and X. Income and Expenditure
I/II,provisions A ccoun t
outstanding Expenses 9,950 Accumulated Losses
Redevelopment Charges not written off 2,62,532
Refundable 3,00,000 3,09,950 Less : Surplus (4,505) 2,58,027
viii. unpaid Dividends Nil XI. Current Losses Nil
)( interest Accrued due
1 Nil
·but not paid
)( Other Llabllltles Nil
xi income and
·Expenditure Acc~unt Nil
Total 7,12,983 Total 7,12,983
111ustration 3 :
From the following trial b~l~nce as on 31-3-2015, prepare final accounts in the prescribed format as
per applicable legal prov1s1ons.
SKYLARK CO-OP. HOUSING LTD.

or. Trial Balance Cr.

,,..
particulars ~ Particulars ~
Accrued Interest on FD - Collection from Members -
Sinking Fund 70 ,299 Property Expenses 16,99, 152
Advances - Staff 26,081 Collection from members -
Audit Fees 17,524 Service Charges 11 ,57 ,017
BMC Deposit for Water 6,625 Interest - Savings Bank 1,212
Cash in Ban ks 2 ,36 ,071 Subscribed Capital :
cash on Hand 14,984 350 Shares of~ 50 each 17,500
Elect~icity Charges 3 ,41,324 Surplus for last year 6,19,986
Dues from members 60 ,236 Tower Rent 1,96 ,642
Equipments 3,90 ,256 Statutory Reserve Fund - Opening 1,35 ,515
Fixed Deposits 61 ,37 ,752 Entrance Fees 200
Fixed Deposits - Sinking Fund 26,90,000 Transfer Fees 500
Furniture and Fittings 11 ,718 Sinking Fund - Opening 67 ,12,745
Housekeeping 1,48,310 Collected for Sinking Fund 5,71 ,596
Insurance Charges 27 ,695 Interest on SF Investments 7,61 ,946
Property Taxes 5,89 ,710
Repairs & Maintenance 1,40,616
Salaries 6,75 ,783
Security 1,31 ,952
Tata Power Deposit 14,200
Water Charges 1,30,485
Water Pump 12,390
1,18,74,011 1,18,74,011
Additional information :
1. Authorised Capital : 28 ,000 Shares of~ 50 each
2. Provide Depreciation : ~
- Equipments 71 ,996
- Water Pumps 1,858
- Furniture 1,172
3. Prepaid Insurance
13,660
4. Prepaid Maintenance Expenses
15,571
S. Outstanding Property Taxes 5 ,97 ,603
6· Advance from Members for Service
charges 30 ,181
7· Tower
Rent rece ived in advance 44 ,065
, 202 Atfva11ce,t F'lna11c:la/ Accmmtlng ([Link]. Part-I/: SEM-1/J)
Solution :
SKYLARK CO-OP. HOUSING LTD.
Dr.
Income and Expenditure Account Cr.
E:xpendituro r r Income r r 1
1. PROPERTY EXPENSES 1. COLLECTION FROM
Property Taxes MEMBERS
• Vida T.B. 5,89,7 10 Property Expenses 16,99,152
• Add : Outstanding 5.97.603 11,87,3 13 Establlshment Expenses
Water Charges 1,30,485 - Vida T.B. 11,57,01 7
Electricity Charges 3.41,324 • Less : Advance (30, 181) 11,26,836
Insurance Charges 2. INTEREST AND DIVIDENDS
• Vida T.B . 27 ,695 Interest - SB 1,212
- Less : Prepaid 13,660 14,035 3. OTHER INCOME
Repairs and Maintenance Tower Rent
- Vide T.B . 1,40,616 · Vide T.B. 1,96,642
- Less : Prepaid (15,571) 1,25 ,045 - Less : Advance (44 ,065) 1,52 ,577
2. ESTABLISHMENT
EXPENSES
Salaries 6,75 ,783
Audit Fees 17,524
Housekeeping 1,48 ,310
Security 1,31 ,952 9,73,569
3. OTHER EXPENSES
Depreciation
- EqL1ipments 71 ,996
- Water Pumps 1,858
- Furniture 1 172 75 ,026
4. SURPLUS/ (DEFICIT) 1,32 ,980
TOTAL 29,79,777 TOTAL 29,79,777
Balance Sheet

Llabllltles ·1 r r A°ssets ./ r
~

~
r j
I. Share Capital I. Cash and Bank Balances
Authorised : a. Cash on Hand . 14,984
28 ,000 Shares of< 50 each 14.00 .000 b. Cash in Banks 2.36.071 2,51 ,055
Subscribed : II. Investments
350 Shares of< 50 each 17,500 Fixed Deposits 61,37 ,752
I-A. Subscription towards Shares Nil Fixed Deposits -
II. Reserve Funds and Sinking Fund 26,90 ,000
Other Funds Add : Accrued Interest 70,299 88,98,051
Statutory Reserve Fund Ill. Staff Provident Fund Nil
Opening 1,35,515 IV. Loans and Advances
Entrance Fees 200 Prepaid Insurance 13,660
Transfer Fees 500 1,36 ,215 Prepaid Maintenance
Sinking Fund Expenses 15.571 29 ,231
Opening 67, 12,745 V. Sundry Debtors
Addition 5,71,596 Advances - Staff 26,081
Interest on SF FD 7.61,946 80,46 ,287 Dues from Members 60.236 86,317
[Link] Provident Fund Nil VI. Current Assets Nil
[Link] Loans Nil [Link] Assets
V. Unsecured Loans Nil Equipments 3,90 ,256
VI. Deposits Nil Less : Depreciation {71,996} 3, 18,260
VII. Current Liabilities Water Pump 12,390
and Provisions Less : Depreciation {1,858} 10,532
Outstanding Expenses 5,97 ,603 Furniture and Fittings 11,718
Advance from Members 30,181 Depreciation on
Income received in Furniture {1,172} 10,546
Advance 44,065 6,71,849 VIII. Miscellaneous
VIII. Unpaid Dividends Nil Expenses and Losses Nil
 · Co-opcrati"e
1
a11d Stat11tory Req11iren,e11t.,· of Societies
1 ~cco ut1lillo~ 203
Interest Accrued due IX. Other Items
IX·but not paid Nil Tata Powe r Deposit 14,200
Other Liabilities NII BMC Deposit for Water 6,625 20 ..a 25
~j income and Expenditure X. Income and Expenditure
·Account Account Nil
surplus for Last year 6,19 ,986 XI. Current Losses Jfl
Less : Appropriations Nil
Add : Current Surplus 1,32,980 7,52 ,966
Total 96,24 ,817 Total 96.24)317

Plan for Disposal of Surplus Funds [S. 79(1A)(c) / Bye-law No. 147]
Memorandum Appropriation Account Cr.
or.
particulars r Particulars r
To Statutory Reserve (25%) 33 ,245 By Balance bid 6,19,986
To Balance c/d 7,19,721 By Surplus (Current Year) 1,32 ,980
7,52 ,966 7,52 ,966

Note : The above appropriations are only reported in the Annual Report for approval of membe rs at
the AGM. They are not shown in the final accounts of the current year. After approval, th ey are
deducted in the Balance Sheet of the next year.
Illustration 4 :
From the following trial balance as on 31-3-2015 , prepare final accounts in the prescribed format as
per applicable legal provisions.
GIRISH CHS LTD.
Dr. Trial Balance Cr.

Particulars r Particulars r
Share of MDC Co-op. Bank 1,100 Interest on Reserve Fund FD 12,758
Audit Fees 5,000 Addition to Sinking Fund 74,880
Cash in Ban ks 3,59 ,272 Dividend 61
Fixed Deposit - Reserve Fund 1,93,519 Interest - Fixed Depos it 4 13
Fixed Deposits 4,241 Interest - Savings Bank 14,756
Fixed Deposits - Sinking Fund 9,34 ,807 Interest on SF FD 77 ,240
Housekeeping Charges 38,142 Members Contribution for Building 1,05 ,40,000
Land and Building 1,05,40,000 Property Tax Refund 1,39 ,028
MCGM Deposit for Water 11,100 Sinking Fund - Opening 7,15,680
MSEDC Deposit 7,600 Statutory Reserve Fund - Opening 1,60 ,363
Office Expenses 25,326 Subscribed Capital :
Postage 3,416 80 Shares of ~ 50 each 4,000
Property Expenses 2,89 ,365 Surplus for Last year 2,60 ,736
Subscription of Housing Federation 500 Collection towards Property
Conveyance 2,447 Expenses 3,37,200
Collection towards
Establishment Expenses 78 ,720
1,24, 15,835 1,24,15,835
Additional Information :
1. Authorised Capital : 200 Shares of ~ 50 each
2. Subscription to the Education Fund outstanding - ~ 160.
3. Property Tax Refund is for 2013-14, payable to members.
 . Par t-II : SEM-IJJJ
Ad•,anced Financial Acc oun ting (M. Com
204
Sol utio n: GIRISH CHS LTD.
Inco me and Exp end itur e Acc oun t Cr
Dr
r r Income r ,-
Expenditure 1. COL LEC TIO N FROM
2,89 ,365
1.P ROP ERT YEX PEN SES MEM BER S
2. ESTABLISHMENT Property Exp ens es 3,37,200
EXPENSES 2. COL LEC TIO N FRO M
25 ,326
Office Expenses MEM BER S
3,416
Postage
2,447 Establishment Exp ens es 78,720
Conveyance 3. INT ERE ST AND DIV IDE NDS
Subscription to the Interest - Savings Bank 14,756
160
Education Fund Interest - Fixed Dep osit 413
Subscription of Housing Dividend 61 15,230
500
Federation
5,000
Audit fees
38,142 74 ,991
Housekeeping
66 ,794
3. SUR PLU S/ (DEFICIT)
TOTAL 4,31,150
4,31,150
TOTAL
Balance She et
~- ( ;,
-~ ~ Ass ets
Liabilities
I. Cash and Bank Bal anc es
I. Share Capital Nil
a. Cash on Han d
Authorised : 3,59,272
10,000 b. Cash in Banks
200 Shares of t 50 each
II. Investments
Subscribed :
4,000 Share of MDC
80 Shares of t 50 each 1,100
Co-op. Bank
I-A. Subscription towards 4,24 1
Nil Fixed Deposits
Shares
Fixed Deposits -
II. Reserve Funds and 9,34 ,807
Sinking Fund
Other Funds -
Fixed Deposit
Statutory Reserve Fund 1,93,519 11 ,33,667
1,60 ,363 Reserve Fund
Opening nt Fun d Nil
Interest on FD 12,758 1,73 ,121 Ill. Staff Provide
IV. Loans and Adv anc es Nil
Sinking Fund - Nil
Opening 7, 15,680 V. Sundry Debtors
VI. Current Ass ets Nil
Addition to Sink ing
74,880 VII. Fixed Ass ets
Fund ~ ,05,40,000
Interest on SF FD 77,240 8,67 ,800 Land and Building
tribu tion VIII. Mis cell ane ous
Members Con Nil
for Building 1,05,40,000 Expenses and Losses
nt Fun d Nil IX. Oth er Item s
[Link] Pro vide
L9a ns · Nil MSEDC Deposit 7,60 0
[Link]
Nil MCGM Dep osit for
V. Unsecured Loans 18,700
osit s Nil Water 11 ,1 00
VI. Dep
X. Income and Exp end itur e
VII. Current Liabilities
and Provisions I
Acc oun t
XI. Current Los ses Nil
Outstanding Expenses 160
Property Tax Refund
payable to Members 1,39,028 1,39 ,188
VIII. Unpaid Dividends Nil
IX. Interest Accrued due
but not paid Nil
X. Other Liabilities Nil
XI. Income and
Expenditure Account
Surplus for Last year 2,60 ,736
Less : Appropriations
Add : Current Surplus 66,794 3,27,530
1,20,51,639 · Total
-
1,20,51,639
Total
 • a,,dStatlllO"' Rcq 11 irenwllls o/Co-opert1tive Societie.,·
Accoun Img .., 205
Plan for Disposal of Surplus Funds [S. 79(1 A)(c) / Bye-law No. 147]
Memorandum Appropriation Account
pr. Cr.
r Particulars -
psrticutars r
To Statutory Reserve (25%) 16,699 By Balance b/d 2,60,736
To Balance c/d 3,10,831 By Surplus (Current Year) 66 ,794
3,27,530 3,27,530
-
Note : The above appropriations are only reported in the Annual Report for approval of members at
the AGM. They are not shown in the final accounts of the current year. After approval, they are
deducted in the Balance Sheet of the next year.
111ustratlon 5 :
From the following trial balance as on 31-3-2015 , prepare final accounts in the prescribed format as
per applicable legal provisions .
PANCHVATI CHS LTD.
or. Trial Balance Cr.

Particulars r Particulars .r
1 Share of MDC Co-op. Bank 1,000 Collection for Property Expenses 41,10,646
1 Share of MOCH Federation 100 Collection for Establishment
Accounting Charges 45,600 Expenses 33,00,111
Annual Day Function 1,46,305 Dividend 60
Audit fees 13,483 Entrance Fees 600
Cash in Banks 30 ,54,607 Interest - Fixed Deposit 5,20 ,705
Cash on Hand 3;534 Interest - Savings Bank 64 ,797
Deposit for Water 10,900 Interest on Major Repairs
Depreciation 96 ,100 Fund FD 5,58 ,841
Electricity Charges 6,91 ,760 Major Repairs Fund - Opening 53 ,63,976
Expenses on Lifts 1,43,294 Sale of Scrap 50 ,375
Fixed Deposit - Major Repairs Fund 1,00 ,01 ,699 Security Deposits from members
Fixed Deposits 16,65 ,041 for renovation 45,000
Furniture and Fittings 5,03 ,934 Statutory Reserve Fund -
Housekeeping 3,18,672 Opening 18,87,659
Insurance Charges 28 ,116 Subscribed Capital :
Meetings Expenses 60 ,788 570 Shares of~ 50 each 28 ,500
Postage 26,332 Surplus for Last year 42,23 ,810
Professional Fees 41,415 Transfer fees 1,53 ,000
Property Taxes 15,20,438
Reliance Infra Deposit 26 ,200
Repairs and Maintenance 6,89,849
Salaries 2,47 ,500
Security 7,87,105
Subscription of Housing Federation 720
Subscription to the Education Fund 348
Conveyance 47 ,524
Water Charges 1,35,716
2,03,08,080 2,03,08,080
Further adjustments : ·
1- Authorised Capital : 3,900 Shares of~ 50 each
2- Dues from members for establishment expenses
~ 1,79 ,889
3- Prepaid Security Expenses
~ 1,53,973
4- Outstanding Property Taxes
~ 5, 13,962
S. Advance from Members for Property Expenses ~ 2,511
6- Repairs to be adjusted from Major Repairs Fund ~ 4,29,654
7- Collection from members for property expenses include collections towards Major Repair Fund
- ~ 15,45,584
 Com. Par t-II : SEM-JJJ)
Ad,,a11ce,I Fi11a11citll Accmmti11g (M.
106
Sol utio n: PANCHVATI CHS LTD.
t Cr.
Income and Exp end itur e Acc oun
Dr.
r Inco me
r r
r
Expenditure 1. COL LEC TIO N FROM
1. PROPERTY EXPENSES ME MB ERS
Property Taxes Property Exp ens es
15,20,438 41 ,10,646
- Vida T.8. :>0,34,400 - Vida T.B .
- Add : Outstanding 5,1 J.~6~ - Less : For Rep air
1,35,7 16 (15 ,45 ,584)
Water Charges 6,91,760 Fund
Electricity Charges e (2,511) 25,62,551
- Less : Advanc
Repairs and Mai ntenance Establishment Exp ens es
6,89 ,849 33 ,00,111
- Vide T.B. 2,60 ,195 - Vide T.B .
(4,2 9,654) 1,79,889 34,80,000
- Less : Tfd . to Fund - Add : Due
1,43 ,294
Expenses on lifts 28 ,116 2. INT ERE ST AND
DIVIDENDS
Insurance Charges Interest - Sav ings Bank 64 ,797
2. ESTABLISHMENT EXPENSES Interest - Fixed Deposit 5,20 ,705
2,47 ,500 60 5,85 ,562 .
Salaries Dividend
26,332
Postage E
47 ,524 3. OTHER INCOM 50,375
Conveyance Sale of Scra p
Subscription to the
348
Education Fund
Subscription of Housing
720
Federation
13,483
Audit Fees
60 ,788
Meetings Expenses
41,415
Professional Fees
3, 18,672
Housekeeping
Security
- Vide TB. 7,87 ,105
(1,5 3,973) 6,33, 132
- Less : Prepaid
45 ,600
Accounting Charges
1,46,305
Annual Day Function
3. OTHER EXPENSES
96 ,100
Depreciation
17,07,088
4. SUR PLU S/ (DEFICIT) 66,78,488
66,78,488 TOTAL
TOTAL
Balance Sheet
f .,
· Assets .f
f f
Liabilities
[Link] and Bank
I. Share Capital Balances
Authorised : a. Cas h on Hand 3,53 4
1,95 ,000
3,900 Shares oH 50 each b. Cash in Banks 30,5 4,60 7 30,58,141
Subscribed :
28,500 II. Investments
570 Shares of <50 each 1 Share of MDC
I-A. Subscription towards Nil Co-op. Bank 1,00 0
Shares 1 Share of MO CH
I. Reserve Funds and Federation 100
Other Funds Fixed Dep osit s 16,6 5,04 1
Statutory Reserve Fund Fixed Dep osit -
Opening 18,87,659
600 Major Repairs
Entrance fees 1,00,01 ,699 1, 16,67,840
1,53 ,000 20,41 ,259 Fund
Transfer fees Nil
Ill. Staff Provident Fund
Maior Repairs Fund -
53 ,63,976 IV. Loans and Advances
Opening 1,53,973
or Prepaid Expenses
Addition to Maj Nil
15,45,584 V. Sundry Debtors
Repairs Fund 1,79 ,889
on Maj or Dues from Members
Interest
 nting and Statutory Requiremellt.\' ,~f Co-opera11,,e . . .\'
. Soc,et,e 207
4ccoU
nd FD VI. Current Assets Nil
Repairs Fu 5,58,841
Less: Maj~r Ret~airs -~ ,Ju .11 70,38,74 7 [Link] d Assets
Furniture and Fittings 5,03,93 4
Members ontr ution
tor Building Nil VIII. Mlscella neous
Nil Expens es and Losses Nil
[Link] Provide nt Fund
[Link] Loans Nil IX. Other Items
v. Reliance Infra
1

unsecured Loans Nil

Deposit 26 ,200
v1. oeposlts 10,900 7 ,100
3_
security Deposits from Deposit for Water
Members for Renovat ion 45 ,000 X. Income and Expend iture
Accoun t Nil
vu. current Llabllltl es
Nil
and Provisio ns XI. Current Losses
outstanding Expense s 5, 13,962
Advance from
Members 2,511 5,16,473
VIII, Unpaid Dividen ds Nil
1x. Interest Accrued
due but not paid Nil
x. Other Liabilities Nil
XI. Income and
Expenditure Accoun t
Surplus for Last year 42,23,81 o
Less : Appropr iations Nil
Add: Current Surplus 17,07,08 8 59 ,30,898
1,56,00,877 Total 1,56,00, 877
Total
Plan for Disposa l of Surplus Funds [S. 79(1A)(c) / Bye-law No. 147]
Cr.
Dr. Memora ndum Appropriation Accoun t

Particulars \ r Particulars - . r
4 ,26,772 By Balance b/d 42 ,23,810
To Statutory Reserve (25%)
55,04 , 126 By Surplus (Current Year) 17,07,08 8
To Balance c/d
59,30,89 8 59 ,30,898
l of member s at
Note : The above appropri ations are only reported in the Annual Report for approva
in the final accounts of the current year. After approva l, they are
the AGM, They are not shown
deducted in the Balance Sheet of the next year,
Illustration 6 :
ed format as
From the following trial balance as on 31-3-201 5 , prepare final accounts in the prescrib
per applicable le~al provision s,
PRATIK CHS LTD.

Dr. Trial Balance Cr.

!:__articulars · Particula rs

1 Share of MDC Co-op . Bank 500 Collection for Sinking Fund 59,827
Accounting charges 12 ,819 Advance from Member s 22 ,514
Audit fees 3 ,456 Collection for Establis hment
Cash in Ban ks 3 ,22 ,347 Expenses 6,54,600
Cash on -Hand 1 ;166 Collection for Property Expense s 6,31,602
Dues from Member s 5 ,03 ,497 Entrance Fees 2,350
Electricity Charges 3 ,04,414 Income and Expendi ture Account 2,28,583
Equipments 67 ,906 Interest - Fixed Deposit 1,26,371
F!xed Deposits · 20 ,92,632 Interest - Savings Bank 37,655
Fixed Deposits - Sinking Fund 7 ,00 ,000 Members Contribution for
Housekeeping 45,802 Building 1,94 ,06,425
land and Building 1,94,06,425 Outstanding Expense s 1,73,645
21 ,245 Sale of Scrap
~SEB Deposit 24,501
29,913 Security Deposit - Contrac tor
Pon Agricultural Tax 1,25,05 6
roperty Taxes 1,63 ,724 Sinking Fund - Opening
6,77 ,755
 108 Adva11c:ed Fi11a11cial Acco,mtino (M. Co p
o • m. art-I/: SEM-IJJ)
Repairs and Maintenance 5,80,180- Statutory Reserve Fund _
Salaries 2,23 ,176 Opening
Subscription to the Educa tion Fund 288 Subscribed : 24 ,63,376
TMC Deposit for Water 44.4 50 480 Sh ares of~ 50 each
Water Ch arg es 1,84 ,320 Transfer Fees 24 ,0QQ
so,ooo
2,47 ,08,260
2,47,08,26()
Adjustments :
1. Depreciation ·on Equipments @ 10%.
2. Prepaid Electricity Charges ~ 19,353
3. Accrued Interest on Sinking Fund FD ~ 41 ,894
4. Accrued Interest on FD ~ 21 ,515
Solution:
Dr. Income and Expenditure Account Cr.
Expenditure
1. f:>ROPERTY EXPENSES
~
" Income
1. COLLECTION FROM
I" r
-

Property Taxes 1,63,724 MEMBERS

Water Charges 1,84 ,320 Property Expenses 6,31,602
Electricity Charges Establishment Expenses 6,54,600
- Vide TB. 3,04,414 2. INTEREST AND
- Less : Prepaid (19,353) 2,85 ,061 DIVIDENDS
Non-Agricultural Tax 29 ,913 Interest - Savings Bank 37,655
Repairs and Maintenance 5,80,180 Interest - Fixed Deposit
2. ESTABLISHMENT - Vide T.B. 1,26,371
EXPENSES - Add : Accrued 21 ,515 1,47,886
Salaries 2,23 , 176 3. OTHER INCOME
Subscription to the Sale of Scrap 24,501
Education Fund 288 I

Audit Fees 3,456

Housekeeping 45,802
Accounting Charges 12,819 2,85,541
3. OTHER EXPENSES
Depreciation (Equipments) 6,790
4. SURPLUS / (DEFICIT) (39,285)
TOTAL 14,96,244 TOTAL 14,96,244

Balance Sheet

Liabilities ~ ~
I. Share Capital Cash and Bank
Authorised : ? Balances
Subscribed : a. Cash on Hand 1,166
480 Shares of t 50 each 24,000 b. Cash in Banks 3,22,347 3,23,513
I-A. Subscription towards II. Investments
Shares Nil 1 Share of MDC
II. Reserve Funds and Co-op. Bank 500
Other Funds Fixed Deposits 20 ,92,632
Statutory Reserve Fixed Deposits -
Fund - Opening 24,63,376 Sinking Fund 7,00,000
Entrance Fees 2,350 Accrued Interest
Transfer Fees 50,000 25,15,726 on FD 21,515
Sinking Fund - Accrued Interest
Opening 6,77,755 on Sinking Fund FD 41,894 28,56,541
Ill. Staff Provident Fund Nil
Addition to Sinking
Fund 59,827 IV. Loans and Advances
41,894 7,79,476 Prepaid Expenses 19,353
Interest on SF FD
Members Contribution V. Sundry Debtors
1,94,06,425 Dues from Members 5,03,497
for Building
r ·ngand Statutory Require
~ccountI mems of Co-operative Societies 2'09
ff prov Id ent Fun d Nil
Nil VI. Current Assets
111,stacured Loans
NII [Link] Assets
!\'-~~secured Loans NII 1,94,06,425
Land and Building
'/. eposlts
Equipments 67,906
'/I, D rity Deposit -
5ecU Less : Depreciation (6,790) 61,116
contractor · 1,25,056 VIII. Miscellaneous
current Llabllltles Nil
Expenses and Losses
'111· nd provisions
IX. Other Items
~utstanding Expenses 1,73,645 21 ,245
MSEB Deposit
Advance from TMC Deposit for
Members 22,514 1,96,159 Water 44 450 65,695
viii, unpaid Dividends Nil X. Income and Expendltu re
[Link] Accrued Account Nil
1·due but not
paid Nil XI. Current Losses Nil
X Other Liabilities Nil
xi. income and
Expenditure Account
surplus for Last year 2,28 ,583
Less : Appropriations Nil
Add : Current Surplus (39,285) 1,89 ,298

- Total
Illustration 7 :
2,32,36, 140 Total 2,32,36, 140

From the following trial balance as on 31-3-2015 , prepare final accounts in the prescribed format as
per applicable legal provisions. ·
GULMOHAR CHS LTD.
Dr. Trial Balance Cr.

Particulars (- Particulars r
Audit Fees 10,000 Collection for Establishment
Cash in Banks 8,24 ,175 Expenses 12 ,68 ,919
Cash on Hand 3,186 Collection for Property Expenses 13,44,570
Dues from Members 13,95, 132 Income and Expenditure Account 9,49 ,296
Electricity Charges 2,52,082 Interest - Fixed Deposit 35 ,406
Equipments 2,06 ,120 Interest - Savings Bank 1,16,313
Fixed Deposits 13,80,522 Members Contribution for
Land and Building 2,63,61 ,000 Building 2,63 ,61 ,000
Property Taxes 18,95,609 Premium on transfers 1,00 ,000
Receivable from Promoters 41 ,950 Sinking Fund - Opening 22 ,75,569
Repairs and Maintenance 1,60,948 Statutory Reserve Fund -
Salaries 1,48 ,940 Opening 5,87 ,250
Security 96 ,612 Subscribed Capital :
Water Charges 3,07 ,097 885 Shares of ~ 50 each 44,250
Transfer fees 800
3,30,83,373 3,30,83,373
Additional Information :
1. Authorised Capital : 8,000 shares of~ 50 each
2- Outstanding Electricity Expenses
~ 32,368
3- Depreciation on equipments @ 10%.
4- Prepaid Security Expenses
~ 5,984
5- Collection for establishment expenses include collection for Sinking Fund
~ 5,25,108
 t,111. Par t-II : Sl:.'M-1/J)
Adva11ced Fi11a11cial Acc01111ti11g (M.C
110
Sol utio n:
GU LMO HAR CHS LTD.
Cr.
t
Income and Expenditure Accoun
Dr.

Expenditt,ro
, r Inco me
r r
1. COLLECTION FROM
1. PROPERTY EXPENSES MEMBERS
18,95 ,609
Pro perty Tax es Col lection for Property
3,07,097 13,44,570
Water Charges Expenses
Electricity Charges Collection for Est abli shm ent
- Vide T.B . 2,52,082
2,84 ,450 Expenses
- Add : Outstanding _J g~ 12,6 8,91 9
1,60 ,948 - Vide T.B .
Rep airs and Main tenance (5, 25, 108) 7,43,811
- Less : Sinking Fund
2. ESTABLISHMENT 2. INT ERE ST AND
EXPENSES DIVIDENDS
1,48 ,940
Salaries Interest - Savings
10,000
Audit Fees Bank
1,16,313
Security Interest - Fixed
- Vide T.B . 96,612 35,4 06 1,51 ,719
(5,984) 90,628 Deposit
- Less : Pre paid
3. OTHER EXP ENS ES
20 ,612
Dep rec iation (Equipments)
(6 ,78 ,184)
4. SURPLUS / (DEFICIT) 22,40,100
22,40,100 TOTAL
TOTAL
Balance Sheet
~ - ; ~

~ ~ Ass ets
Liabilities
[Link] and Ban k
I. Share Capital Balances
Authorised : 3,18 6
8,000 Shares of~ 50 each 4,00,000 a. Cash on Hand 8,27,361
b. Cas h in Ban ks 8,24 , 175
Subscribed :
44,250 II. Investments
885 Shares of~ 50 each 13,80,522
Nil Fixed Deposits
I-A. Subscription towards Shares Nil
Ill. Staff Provident Fund
II. Reserve Funds and Nii
IV. Loans and Adv anc es
Other Funds 5,984
Prepaid Expenses
Statutory Reserve Fund
5,87 ,250 V. Sundry Debtors
Opening
Fee s 800 Receivable from
Tran sfer 41,950
on Transfers 1,00 ,000 6,88 ,050 Promoters
Pre miu m bers 13,9 5, 132 14,37,082
Dues from Mem
Sinking Fund - ets Nil
22 ,75,569 VI. Current Ass
Opening ets
VII. Fixed Ass
Addition to Sinking 2,63 ,61,000
5,25,108 28,00,677 Land and Building
Fund ents 2,06 , 120
tion Equ ipm
Members Contribu 1,85,508
2,63 ,61 ,000 Less : Depreciation (20,612)
for Building ane ous
Nil VIII. Mis cell
[Link] Provident Fund Nil
Nil Expenses and Losses
[Link] Loans Nil
Nil IX. Other Items
V. Unsecured Loans
Nil X. Inco me and Exp end itur e
VI. Dep osit s Nil
Account
VII. Current Liabilities ses Nil
and Provisions XI. Current Los
Outstanding Expenses 32,368
Nil
VIll. Unpaid Dividends
IX . Interest Accrued
due but not paid Nil
X . Other Liabilities Nil
Accou nting and Statut ory Re •
qu,rem ent."i of Co-op erativ e Sm:ietie.,·
XI. Incom e and 211
Expen diture Acco unt
Surplus for Last year 9.4 9 ,
Less : Appro priatio ns 296
Less: Curre nt Deficit (6J.e 10,1,
Ll.Y-U 2,71 ,11 2
Total
3,01,9 7,457 Total
Illustration 8 : 3,01,97,457
th
From ~ following trial balanc e as on 31 -3-2015, prepa re
per applicable legal provis ions . final accounts in the prescribed format as

ASHWIN CHS LTD.

Or.
Trlal Balance
Particulars Cr.
r Particulars r
1 Share of MDC Co-op . Bank !

1 Share of MOCH Federation 1,000 Collection from Members

100 . Property Expenses
Audit Fees 6,42,4 75
Cash in Banks 4,000 - Establishment Expenses 8,72,6 86
Cash on Hand 4,70 ,122 Contribution to Sinking Fund 6,00,0 00
Fixed Deposits 837 Dividend 60
21 ,55 ,836 Entrance fees 2,760
Fixed Depos its - Sinking Fund
8,61 ,942 Interest - Fixed Deposit 2, 15,500
Furniture and Fittings
3,714 Interest - Savings Bank 7,802
Insurance Charg es
35 ,590 Interest on SF FD 1,34, 121
Land and Building
48,52, 050 Members Contribution for Building 48,52, 050
Property Taxes and Expenses
9,68 ,591 Share Capital :
_Salaries
34,181 280 Shares of ~ 50 each 14,000
Security
1,30,2 03 Sinking Fund - Opening 8,49 ,742
Statutory Reserve Fund - Opening 13,19, 470
Transfer Fees 7,500
95,18,166 95,18, 166
Additional inform ation :
1. Authorised Capital is fully subscribed.
2. Collection tor Establishment Expenses includes advan
ce from members ~ 2,68,118
3. Depreciation
~ 557
4. Outstanding Security Expenses
~ 79,592
5. Prepaid Insurance Expenses
~ 15,533
6. Due from memb ers for Property Expenses
~ 25,844
Solution :
ASHWIN CHS LTD.
Dr Income and Expenditure Account
Cr.
Expenditure . Income ·
1. PROP ERTY EXPE NSES 1. COLLECTION FROM
Property Taxes and Expenses 9,68,591 MEMBERS
lns_urance Charges Property Expenses 6,42,4 75
351590 Add: Due . 25,844 6,68,319
- V1de T.B. . (15,533)
. - Less : Prep a1d_ ,,--= -=~- 20,057 Establishment
2. ESTA BLISH MENT EXPE NSES Expenses 8,72,6 86
Salaries 34,181 Less : Advance (2,68, 118) 6,04,5 68
Audit fees 4,000 2. INTEREST AND DIVIDENDS
Security Interest - Savings Bank 7,802
Vide T.B.. 1,30,2 03 Interest - Fixed Deposit 2,15,5 00
Add : Outstanding 79,592 2,09,795 Dividend
60
3. OTHER EXPE NSES
Depreciation 557
4. SURP LUS / (DEFICIT) 2,59,0 68

TOTAL ~4,96,249 TOTAL

~4,96,249
 Advanc ed Financia/Accounting ([Link]. Part-II : SEM-IIJ)
212
Balance Sheet

~ Assets r r
pab/1/tles ?' -
I. Cash and Bank
I. Share Capital
Authori sed: Balances
Cash on Hand 837
280 shares of ~ 50 each 14,000 a.
b. Cash in Banks 4.70,12 2 4,70,959
Subscribed ·:
280 Shares of ~ 50 each 14,000 II. Investments
I-A. Subscription towards Shares Nil 1 Share of MDC
Co-op. Bank 1,000
II. Reserve Funds and
Other Funds 1 Share of MOCH
Federation 100
Statutory Reserve Fund
Fixed Deposits 21 ,55,836
Opening 13,19,470
Entrance Fees 2,760 Fixed Deposits -
Sinking Fund 8,61,94 2 30, 18,878
Transfer Fees 7,500 13,29,730
Ill. Staff Provident Fund Nil
Sinking Fund - Opening 8,49 ,742
Addition to Sinking Fund 6,00 ,000 IV. Loans and Advances
Prepaid Expenses 15,533
Interest on SF FD 1,34,121 15,83,863
Members Contribution V. Sundry Debtors
Dues from Members 25,844
for Building 48,52,050
Nil VI. Current Assets Nil
[Link] Provident Fund
[Link] Loans Nil [Link] Assets
Nil Land and Building 48,52,050
V. Unsecured Loans
Nil Furniture and Fittings 3,714
VI. Deposits
VII. Current Liabilities Depreciation on
Furniture (557} 3,157
and Provisions
Outstanding Expenses 79 ,592 VIII. Miscell aneous
3,47,710 Expenses and Losses Nil
Advance from Members 2,68,118
Nil IX. Other Items Nil
VIII. Unpaid Dividends
IX. Interes t accrued X. Income and Expend iture
Nil Account Nil
due but not paid
Nil XI. Current Losses Nil
X. Other Liabilities
XI. Income and
Expenditure Account
Surplus for Last year
Less : Appropriations
Add : Current Surplus 2,59 ,068
Total 83,86 ,421 Total 83,86,421

Plan for Disposal of Surplus Funds [S. 79(1 A)(c) / Bye-law No. 147]
Memorandum Appropriation Account Cr.
Dr.

Particulars r Particulars r
64 ,767 By Balance b/d Nil
To Statutory Reserve (25%)
To Balance c/d 1,94 ,301 By Surplus (Current Year) 2,59 ,068
2,59 ,068 2,59 ,068
for approval of members at
Note : The above appropriations are only reported in the Annual Report
account s of the current year. After approval they are
the AGM . They are not shown in the final '
deducted in the Balance Sheet of the next year.
lllustratlon 9 :
in the prescribed format as
From the following trial balance as on 31-3-2015, prepare final accounts
per applicable legal provisions.
·• counting a11d Statu tor:,, Re
11 C ,
qu,rc m cnt.-. of Ct>-op crt1tfr c Socie t/e .. 213
VE ENA CHS LTD.
or. Trlal Balan ce Cr.
partie UIBrs
i5ha re of MD C Co -op . Bank
, Pa rticula rs ~
1,000 Colle ctlon • from Memb er•
1 Share of MOC H Fede ration . Prope rty Taxes and Expen
Accumulated Los ses not writte n ott 100 ses 19,75, 44 1
cash in Bank s 7,00 ,120 . Establishm ent Expe nses 15,32 ,632
cash on Hand 4 1,2 16 . Contribution to Welfa re Fu nd 7 ,35 ,300
oepos it tor Wate r 23 ,804 Interest - Saving s Bank 1,759
1,48 ,854 Entrance Fees 500
Equipments
5,68,0 90 Exces s Tax Collec tion Refund able 36 ,02 ,066
Establishm ent Expe nses
9, 13,57 0 Interest • Fixed Depo sit 23 ,893
expen ses tor Welfa re
3 ,57 ,652 Intere st on Welfare Fund FD 4,87 ,131
Fixed Depo sits
8,76,979 Memb ers Contr ibution fo r Buildi ng 86 ,31 ,300
Fixed Depo sits · Welfa re Fu nd
48 ,7 1,310 Prem ium on Transfers 1,41 ,200
Furniture
1,48 ,115 Secur ity Depo sits from Memb ers 50 ,000
Insurance Charg es
35 ,046 Statutory Reserve Fund • Open ing 11,46 ,368
Land and Build ing
86 ,31 ,300 Subscribed Capital 44 ,250
Powe r Depo sit
20 ,100 Trans fer Fees 1,200
Prope rty Tax Refun d du e from BMC
18,98 ,013 We lfare Fund • Open ing 45 ,78,81 5
Prope rty Taxes and Expe nses
23 ,42,147
Recei vable from Builde r
3,25 ,806
Repai rs an d Mainte nance 10,48 ,633
2,29,51 ,855 2,29,5 1,855
Additional Infor matio n :
1. Authorised C apital : 2 ,000 Share s of~ 50 each
2. Subsc ribed Capit al : 88 5 Share s of ~ 50 each
3. Depre c iation on Equip ments
10%
4. Depreciatio n on Furni ture
~ 13,70 2
5. Prepa id Insura nce
~ 5,800
6. Prepa id Maint ena nce Expe nses
~ 65,61 5
7. Dues from memb e rs fo r Establishm ent Expen
ses ~ 1,55,7 68
8. Advan ce from Memb ers fo r Property Taxes
~ 1,28,3 64
9. Expen ses fo r we lfa re are to be adjus ted again
st the Welfare Fund.
Solution :
VE ENA CHS LTD.
Dr. Incom e and Expe nditu re Acco unt
Cr.
Expen diture · , ( ( Incom e ; ' ( (
I
1. PROP ERTY EXPE NSES 1. COLL ECTIO N FROM
Property Taxes and Expe nses 23,42 ,147 MEM BERS
Insurance Charg es Property Expe nses
-Vide T.B. 35 ,046 • Vide T.B. 19,75 ,441
• Less : Prepa id . (5 800' 29 ,246 - Less : Advan ce (1,28 ,364} 18,47 ,077
Repairs and Maintenance 2. COLL ECTIO N FROM
-Vide T.B. 10,48 ,633 MEM BERS
- Less : Prepa id (65 615' 9,83 ,018 Estab lishm ent Expe nses
2. ESTA BLIS HMEN T - Vide T.B. 15,32 ,632
EXPE NSES 9,13, 570 - Add : Due 1,55, 768 16,88 ,400
3. OTHER EXPE NSES 3. INTE REST AND
Depre ciatio n DIVID ENDS
- Equip n,ents 56,81 0 Interest - Savin gs Bank 1,759
- Furniture 13,70 2 70 ,512 Intere st - Fixed Depo sit 23,89
3 25,65 2
4. SURP LUS / (DEF ICIT) (7,77,364) -
_ TOTAL 35,61 ,129 TOTA L
135,61,129
214
Advanced Fi11u11cial Accounti11g ([Link]. Part-II: SEM-1/[J
Balance Sheet

Liabilities r r Assets r r ~

I. Share Capltal I. Cash and Bank

Authorised : Balances
2,000 Shares of, 50 each 1,QQ,QQQ a. Cash on Hand 23 ,804
Subscribed : b. Cash in Banks 41,216 65,020
885 Shares of ~ 50 each 44 ,250 II. Investments
1-A. Subscription towards 1 Share of MDC
Shares NII Co-op . Bank 1,000
II. Reserve Funds and 1 Share of MOCH
Other Funds Federation 100
Statutory Reserve Fixed Deposits 8,76,979
Fund - Opening 11,46,368 Fixed Deposits -
Entrance Fees 500 Welfare Fund 48,71,3 10 57,49,389
Transf er Fees 1,200 Ill. Staff Provident Fund Nil
Premium on Transfers 1,41,20 0 12,89,2 68 IV. Loans and Advances
Welfare Fund - Prepaid Insurance 5,800
Opening 45 ,78 ,815 Prepaid Maintenance
Addition to Welfare Expenses 65,615 71,415
Fund 7,35 ,300 V. Sundry Debtors
Interest on Fund FD 4 ,87 ,131 Receivable from
Less : Expenses (3,57,652) 54,43,594 Builder 3,25 ,806
Members Contribution Dues from Members 155,768
for Building 86 ,31,300 Property Tax Refund
[Link] Provident Fund Nil due from BMC 18,98,0 13 23 ,79,587
[Link] Loans Nil VI. Current Assets Nil
V. Unsecured Loans Nil [Link] Assets
VI. Deposits Land and Building 86,31,300
Security Deposits from Equipments 5,68 ,090
members 50 ,000 Less : Depreciation (56,810) 5, 11,280
VII. Current Liabilities Furniture 1,48,115
and Provisions Depreciation on
Excess Tax Furniture (13,702) 1,34,413
Refundable 36 ,02,066 VIII. Miscellaneous
Advance from Expenses and Losses Nil
Members 1,28,364 37 ,30,430 IX. Other Items
VIII. Unpaid Dividends Nil Power Deposit 20,100
IX. Interes t Accrue d Deposit for Water 1,48,854 1,68,954
due but not paid Nil X. Income and Expenditure
X. Other Liabilit ies Nil Account
XI. Income and Accumulated Losses
Expenditure Account Nil not written off 7,00 ,120
XI. Current Losses 7,77,364

Total 1,91,88,842 Total 1,91,88,842

Illustration 1 O :
ts in the prescribed format as
From the following trial balance as on 31-3-2015, prepare final accoun
per applicable legal provisions.
GLEN CHS LTD.
Trial Balance Cr.
Dr.

Particulars Particulars
85,188 Interest - Fixed Deposit 6, 16,985
Insurance Charges
Income and Expenditure A/c : Collection from Members for
1,78,262 Establishment Expenses 43,37,280
Balance b/d 1,33,48,917
Non Agricultural Jax 4,220 Statutory Reserve Fund
TDS Refund due 3,841 Subscribed Capital :
38,750
1 Share of MDC Co-op . Bank 1,000 775 Shares oft 50 each
Acco11nting and Statutory Requirements of Co-operative Societies 21.'i
Water Charges 4,67,393 Collection from Members for
Equipments 2,97,940 Property Expenses 39,82,808
Establishment Expenses 24 ,54,074 Security Deposits from Members 4,02,000
Electricity Charges 9,70 ,107 Interest - Savings Bank 57,650
nd Building 96,86 ,212 Members Contribution for Building
Land a 96,86,212
Cash on Ha nd 5,302 Mobile Tower Rent 6,96,691
Repairs and Maintenance 10,91 ,503
cash in Banks 10,37,3q9
Tata Deposit 95 ,300
Property Taxes 28 ,80 , 186
Fixed Deposits 1,39,04,406
Deposit for Water 5,000
3,31,67,293 3,31,67,293
Further Information:
1. Authorised Capital : 4,000 Shares of~ 50 each.
2. Dues from members for Establishment Expenses ~ 1,18,600
3. Prepaid Insurance ~ 24,961
4. Depreciation on Equipments ~ 59 ,588
5. Outstanding Electricity Charges ~ 1,77,567
Solution :

GLEN CHS LTD.

Dr. Income and Expenditure Account Cr.
.. ' .,
Expenditure ,, ~ Income r
1. PROPERTY EXPENSES 1. COLLECTION FROM
Property Taxes 28 ,80,186 MEMBERS
Water Charges 4,67,393 Collection from Members
Electricity Charges for Property Expenses 39,82,808
- Vide T.B. 9,70 ,107 Collection from Members
- Add : Outstanding 1,77,567 11,47,674 for Establishment Expenses
Insurance Charges (43,37,280 + 1, 18,600) 44 ,55 ,880
- Vide T.B. 85,188 2. INTEREST AND DIVIDENDS
- Less : Prepaid (24,961) 60,227 Interest - Savings Bank 57,650
Non Agricultural Tax 4,220 Interest - Fixed Deposit 6, 16,985
Repairs and Maintenance 10,91 ,503 3. OTHER INCOME
2. ESTABLISHMENT EXPENSES 24 ,54,074 Mobile Tower Rent 6,96 ,691
3. OTHER EXPENSES
Depreciation 59 ,588
4. SURPLUS/ (DEFICIT) 16,45, 149
TOTAL 98,10,014 TOTAL 98,10,014

Balance Sheet
C
Liabilities ~ ~ '
Assets ~ ~

I. Share Capital I. Cash and Bank

Authorised Capital : Balances
4,000 Shares oH 50 each 2,00,000 a. Cash on Hand 5,302
Subscribed Capital : b. Cash in Ban ks 10,37,359 10,42,661
775 Shares of~ 50 each 38,750 II. Investments
1-A. Subscription towards 1 Share of MDC
Shares Nil Co-op. Bank 1,000
11. Reserve Funds and Fixed Deposits 1,39,04,406 1,39,05,406
Other Funds Ill. Staff Provident Fund Nil
Statutory Reserve IV. Loans and Advances
Fund 1,33,48,917 Prepaid Insurance 24,961
Members Contribution V. Sundry Debtors
for Building 96,86,212 Dues from
Ill. Staff Provident Fund Nil Members 1, 18,600
 116 Adl'fmct!d Flm1ncia/ Acco,mtl11g ([Link] m~ Part-II: SEM-11/)
IV. Secured Loans NII TDS Rofun d duo _ -1,84J 1.22A4t
V. Unaecu,-d Lonn, NII VI . Current A11at1 Nil
VI. Oepo1lt1 VII. Fixed A11et1
socu,uy Doposlls LMd ond Building 96.86,2 t 2
from Mombor~ 4,02,000 Equlpmonts 2.97,940
VII. Cumtnt Lh1bllltlot Le ss : Dopreclotlon 1_59&.§l!} 2.38,352
•nd Provlalone VIII. Mlacellaneoua
Ou ts tnncting Exponsos 1,77.5 67 Expenses and LoHe ■ Nil
Vlll. Unpaid 0lvldonda NII IX . Other Item,
IX . Interest Accru ed Ta ta Deposit 95 ,300
due but not paid NII Deposit for Water 5.000 1,00 ,300
X. Other Llabllltles NII X. Income and Expenditure
XI . Income end Account Nil
Expenditure Account XI. Current Losses Nil
Sufl)lus / (Deficit) for
Last year (1 .78 ,262)
Less : Appropriations Nil
Add : Curren t Sufl)lus 16.45, 149 14,66,887
Total 2,51 ,20,333 Total 2,51 ,20,333

Plan for Disposal of Surplus Funds [S. 79(1A)(c) / Bye-law No. 147]
Or. Memorandum Appropriation Account Cr.

Particulars r Par1iculars r
To Balance bi d 1,78 ,262 By Surplus (Current Year) 16,45, 149
To Statutory Reserve (25%) 4, 11 ,287
To Balance c/d 10 ,55 ,600
16,45, 149 16,45, 149

Note : The above appropriations are only reported in the Annual Report for approval of members at
the AGM . They are not shown in the final accounts of the current year. After approval, they are
deducted in the Balance Sheet of the next year.
Illustration 11 : (From R & P A/c)
From the following Receipts and Payment Account for the year ending 31-3-2015 , prepare final
accounts in the prescribed format as per applicable legal provisions.
CECILIA CHS LTD.

Dr. Receipts and Payments Account Cr.

Payments ~ [Link] ~

To Property Taxes 6,51 ,334 By Opening Nil

To Water Charges 5,051 By Collection from members 61 ,79 ,560
To Electricity Charges 6,310 By Interest - Savings Bank 4,819
To Insurance Charges 5 ,629 By Tata Sky Rent 25 ,000
To Repairs and Maintenance 19,501
To Salaries 42 ;000
To Postage 3,908
To Conveyance 222
To Subscription to the Equcation Fund 15
To Security 1,18,001
To Land and Building 53,00,000
To Cash on Hand c/d 2,542
To Cash in Banks c/d 54,866
62,09,379 62,09,379

Further information :
~
(a) Details of collection from members :
6,78,110
(i) Property Taxes and Expenses
1,66,000
(ii) Establishment Expenses
 011 nting and Statu tory Requ ir
,4cc ements of Co-operative Societies
(iii) ·Entrance fees 217
(iv) Transfer fees
3,000
(V) Sinking Fund
200
(vi) Repairs Fund 6,000
(vii) Cost of Bu ilding 25,00 0
(viii) Subscription : 25 Share s of ~ 53,00 ,000
50 each
1,250
(b) Authorised Capit al : 1000 shares of ~ 61.79 ,560
(c) outstan [Link] Elec t nc1ty
. .
Expe nses
50 each

solution : 3,400

CECILIA CHS LTD.

or. Incom e and Expenditure Acco unt
Cr.
Expenditure
r r- Income
.,
r r
1. PROPERTY EXPE NSES
Property Taxes 1. COLLECTION FROM
Water Charg es 6,51,3 34 MEMBERS
Electricity Charg es 5,051 Property Taxes and Expe nses 6,78, 110
- Vide R & P A/c 2. COLLECTION FROM
6,310 MEMBERS
- Add : Outst andin g
3,400 9,710 Estab lishment Expe nses
Insurance Charg es 1,66, 000
Repairs and Maintenance 5,629 3. INTE REST AND DIVID ENDS
19,501 Intere st - Savin gs Bank 4,819
2. ESTABLISHMENT EXPE NSES
Salaries 4. OTHE R INCO ME
42 ,000 Tower Rent
Postage 25,00 0
3,908
Conveyance 222
Subscription to the
Education Fund 15
Security 1, 18,001 1,64,1 46
3. SURP LUS/ (DEF ICIT)
18,55 8
TOTAL 8,73,9 29 TOTAL 8,73, 929
·Balance Sheet
Liabilities · r- r -
Asse ts r- r- I
I. Share Capit al I. Cash and Bank
Authorised : Balances
1,000 Shares of ~ 50 each 50,00 0 a. Cash on Hand 2,542
Subscribed : b. Cash in Banks 54,86 6 57,40 8
25 Shares of ~ 50 each 1,250 II. Investments
1-A. Subscription towa rds Nil
Ill. Staff Provident Fund
Shares Nil
Nil IV. Loans and Adva nces
11. Reserve Fund s and Nil
V. Sundry Debtors
Other Fund s Nil
VI. Current Assets
Statutory Rese rve Fund Nil
[Link] Assets
Entrance Fees 3,000 Land and Building 53,00 ,000
Transfer Fees 200 3,200 VIII. Miscellaneous
Addition to Sinking Fund 6,000 Expenses and Loss es
Addition to Repairs Fund Nil
25 ,000 IX. Other Items
Members Contribution Nil
X. Income and Expe nditu re
for Building 53 ,00 ,000 Acco unt
[Link] Provi dent Fund -Nil
Nil XI. Current Loss es
[Link] Loan s Nil
Nil
V. Unse cured Loan s Nil
VI. Depo sits Nil
VII. Curre nt Liabilities
and Prov ision s
Outstanding Expe nses 3,400
218 Adva11ced Fi11a11cial Accmmti11g ([Link]. Part-JI: SEM-/1/)
VIII. Unpaid Dividends Nil
IX. Interest accrued
due but not paid Nil
X. Other Liabilities Nil
XI. Income and
Expenditure Account
Surplus for Last ye ar NII
Less : Appropriations
Add : Cu rrent Surplus 18,558
Total 53,57,408 . Total 53,57,408
Plan for Disposal of Surplus Funds [S. 79(1 A)(c) / Bye-law No. 147)
Dr. Memorandum Appropriation Account Cr.
Particulars r Pa rticulars r
To Statutory Reserve (25%) 4,640 By Balance b/d Nil
To Balance c/d 13,918 By Surplus (Current Year) 18,558
18,558 18,558
Note : The above appropriations are only reported in the Annual Report for approval of members at
the AGM . They are not shown in the final accounts of the current year. After approval, they are
deducted in the Balance Sheet of the next year.
Illustration 12 :
From the following trial balance as on 31-3-2015, prepare final accounts in the prescribed format as
per applicable legal provisions.
MANGAL CHS LTD.
Dr. Trial Balance Cr.

Particulars ' r '7articulars '· r

1 Share of MOCH Federation 100 Collection from members 3,97,761
Cash in Banks 3,08 ,575 Collection for Sinking Fund 10,000
Cash on Hand 6 Income and Expenditure Account 26,605
Electricity Charges 76 ,170 Interest - Fixed Deposit 62 ,726
Fixed Deposits 8,00 ,568 Interest - Savings Bank 8,022
Furniture and Fittings 734 Sinking Fund - Opening 1,65,000
Insurance Charges 9,557 Statutory Reserve Fund - Opening 7,95 ,661
Office Expenses 1,344 Subscribed :
Professional Fees 7,000 100 Shares of~ 50 each 5,000
Property Taxes 1,49,723
Repairs & Maintenance. 42 ,940
Salaries 36 ,500
Subscription of Housing Federation 500
Subscription to the Education Fund 300
Water Charges 36 ,758
14,70,775 14,70,775
Adjustments :
(a) Outstanding expenses - t
(i) Salary 3,200
(ii) Water charges 12,394
(iii) Repairs and Maintenance 4,200
(iv) Electricity Charges 13,500
(b) Depreciation on Furniture @ 10%
(c) Authorised Capital : 180 shares of~ 50 each
(d) Dues from members for establishment expenses 43 ,242
Jee Ounting and Statut ory Requi rement s o'C
" . Societ
. ies
'J 0 -operative 219
s01ut10n :

MANGAL CHS LTD.

or. Incom e 8nd Expenditure Account Cr
£tpenditure r r
pROPERTY EXPEN SES Income r r
1
· property Taxes 1. COLLECTION FROM
water Charges 1,49,723 MEMBERS
. Vide T.B. Vide T.B . 3,97,761
36,758
• Add : Outsta nding Add : Due 43,242 4,41 ,003
12,394 49,152 2 . INTEREST AND DIVIDENDS
Electricity Charg es
. Vide T.B. Interest - Savings Bank 8,022
76,170
. Add : Outsta nding Interest - Fixed Deposit 62,726 70,748
13,500 89 ,670
insurance Charg es
Repairs and Mainte nance 9,557
-Vide T.B . 42,940
. Add : Outsta nding 4,200 47,140
2. ESTABLISHMENT EXPEN SES
Salaries
- Vide T.B. 36 ,500
- Add : Outsta nding 3,200 39,700
Office Taxes and Expen ses
1,344
Subscription to the Educa tion Fund
300
Subscription of Housin g Federation
500
Professional Fees
7 ,000
3. OTHER EXPEN SES
Depreciation
73
4. SURPLUS / (DEFIC IT) 1,17 ,592
TOTAL 5,11,751 TOTAL 5,11,7 51
Balance Sheet
>
Liabilities " ... ~ ,, ~ Assets ~ -~
I. Share Capita l I. Cash and Bank
Authorised : Balances
180 shares of t 50 each 9,000 a. Cash or\ Hand 6
Subscribed : b. Cash in Banks 3,08,5 75 3,08 ,581
100 Shares of t 50 each 5,000 II. Investments
1-A. Subscription towar ds Shares Nil 1 Share of MOCH
II. Reserve Funds and Federation 100
Other Funds Fixed Deposits 8,00,5 68 8,00 ,668
Statutory Reser ve Fund Ill. Staff Provident Fund
Nil
Opening 7,95,661 IV. Loans and Advan ces . Nil
Sinking Fund - Openi ng 1,65,0 00 V. Sundry Debtors
Addition to Sinkin g Fund 10,000 1,75,000 Dues from Memb ers 43 ,242
[Link] Provid ent Fund Nil VI. Current Assets
Ni
[Link] Loans Nil [Link] Assets
V. Unsecured Loans Nil Furniture and Fittings 734
VI. Deposits Nil Depreciation on
VII. Current Liabilities Furniture (73) 66 1
and Provis ions VIII. Misce llaneo us
Outstanding Expen ses 33 ,294 Expen ses and Losse s
N ii
VIII. Unpaid Divide nds Nil IX. Other Items
N ii
IX. Interest accrue d X. Incom e and Expen diture
due but not paid Nil Accou nt
N ii
X. Other Liabili ties Nii XI. Curren t Losse s
N ii
 A,lva11ced Fi11a11cial Acc()Unting ([Link]. Part-II: SEM-11/)
220
XI. Income and
Expenditure Account
Surplus for Last year 26,605
Less ·: Appropriations Nil
Add : Current Surplus 1,17.592 1,44, 197
11,53,152 Total 11,53,152
Total
Plan for Disposal of Surplus Funds [S. 79(1A)(c) / Bye-law No. 147] .
Cr.
Dr. Memorandum Appropriation Account

\ r Particula rs r
Particulars
29,398 By Balance bid 26,605
To Statutory Reserve (25%) I
1, 17,592
To Balance c/d 1,14,799 By Surplus (Current Year)
1,44, 197
1,44,197
of members at
Note : The above appropriations are only reported in the Annual Report for approval
of the current year. After approval , they are
the AGM . They are not shown in the final accounts
deducted in the Balance Sheet of the next year.
Illustration 13 :
d format as
From the following trial balance as on 31-3-2015, prepare final accounts in the prescribe
per applicable legal provisions. ·

BHATWADI CHS LTD.

Trial Balance Cr.
Dr.
.. ,

Particulars r Particulars
;. r !
100 Collection from Members 3,43,625
1 Share of MDC Co-op . Bank
100 Dividend 6
1 Share of MDCH Federation
1,69,408 Income and Expenditure Account 3,09,519
Accrued Interest on FD
1,000 Interest - Fixed Deposit 70,179
Audit Fees
2,600 Interest - Savings Bank 1,827
BEST Deposit
BMC Deposit for Water 5,491 Members Contribution for Building 9,43,500
Cash in Banks 10,455 Security Deposits from Members 18,800
Cash on Hand 1,164 Sinking Fund - Opening 3,46,774
Fixed Deposits 11 ,14,116 Statutory Reserve Fund - Opening 4,46,785
Furniture and Fittings 3,208 Subscribed Capital :
Land and Building · 9,43,500 100 Shares oft 50 each 5,000
Property Taxes and Expenses 87,950
Salaries 58,436
Structural Audit Fee 15,730
Subscription to the Education Fund 2,400
Water Charges 70 ,357
24,86,015 24,86,015

Adjustments :
1. Details of collection from members : f
- Property Taxes and Expenses 1,92,425
- Establishment Expenses 1,29,600
- Contribution to Sinking Fund 21.600
3.43.625
2. Authorised Capital : 1,500 shares oft 50 each
3. Depreciation @ 10%
4. Outstanding Water Charges 11,960
/fl:& .,UH IU lft}; ' " "
' .:)tatutory Re qui rem ent s or e
'J O•(}[Link] Soc1et1
. .es
So lut ion : 221

BHATWADI CH S LTD .
or.
Inc om e and Exp end itu re
Ac cou nt
Expenditure Cr
('
1. PR OP ER TY EX PE NS ES
r Income
(' ('
Property Tax es and 1. CO LLE CT ION FROM
Exp ens es ME MB ER S
Wa ter Ch arg es 87, 950 Property Expenses
- Vide T.B . 2. CO LLE CT ION FROM 1,9 2,4 25
70 ,35 7
- Add : Ou tsta ndi ng ME MB ER S
11,960 82,317
2. ES TA BL ISH ME NT EX PE Establishment Expenses
NS ES 1,2 9,6 00
Sal arie s 3. INT ER ES T AND DIVIDE
58, 436 ND S
Subscription to the Interest - Savings Ban k
1,827
Edu cat ion Fun d Interest - Fixed Deposit 70
2,4 00 ,179
Audit Fee s Dividend
1,0 00 6 72 ,01 2
Structural Au dit Fee
15, 730 77 ,566
3. OT HE R EX PE NS ES
De pre cia tion
4. SU RP LU S/ (DE FIC IT) 320
1,45 ,88 4
TO TA L
3,9 4,0 37 TOTAL
3,9 4,0 37
Ba lan ce Sheet
Liabilities
r r Assets
I. Sh are Ca pit al r r
Au tho rise d : I. Cash and Ba nk
1,500 sha res of ~ 50 each Balances
75,000 a. Cash on Hand
Su bsc ribe d : 1,1 64
100 Sh are s of ~ 50 each b. Cash in Banks 10,455 11 ,619
I-A. Su bsc rip tio n tow ard s 5,000 II. Investments
Shares Nil 1 Share of MDC
II. Re ser ve Fu nd s and
Other Fu nd s Co- op . Bank 100
Statutory Re ser ve Fun d 1 Sha re of MOCH
Op eni ng Federation 100
4,46 ,785 Fixed Deposits
Sinking Fu nd - Op eni ng 3,4 11 ,14 ,116
6 ,77 4 Accrued Interest on FD 1,69,4
Addition to Sinking Fund 21,600 3,68 ,374 Ill. Staff Provid 08 12,83 ,724
Me mb ers Contribution ent Fund Nil
IV. Loans and Advances
for Building 9,43 ,500 V. Sundry Debtors Nil
[Link] Pro vid ent Fun d Nil
Nil VI. Current Assets
[Link] Lo ans Nil
Nil VII. Fixed Assets
V. Un sec ure d Loa ns
Nil Land and Building
VI. De pos its 9,43,500
Furniture and Fittings 3,208
Security De pos its from
Depreciation on
Members 18,800 Furnitur.e (320)
VII. Current Liabilities 2,888
VIII. Miscellaneous
and Pro vis ion s Expenses and Losses
Outstanding Exp ens es 11,960 IX. Other Items Nil
VIII. Unpaid Div ide nds
Nil BEST Deposit 2,600
IX. Interest acc rue d
BMC Deposit for Water 5 491
due but no t paid 8,091
Nil X. Income and Expenditure
X. Other Liabilities
Nil Account
XI. Inc om e and Nil
XI. Current Losses
Expenditure Ac cou nt Nil
Surplus for Last yea r 3,09,519
Less : Appropriations Nil
Add : Current Surplus 1,45,884 4,55,403
Total 122,49,822 Total 122,49,822
 ,f<b-flt1Cetl Fh11mcifll Acc01111ti11g (M.CtJ111. Part-II: SEM-1//J
111
Plan for Dlsposal of Surplus Funds [S. 79(1A)(c) / Bye-law No. 147]
Cr.
Memorandum Appropriation Account
Dr.
r Particulars
r
Par1iculars 3,09,519
36 ,471 By Balance b/d
To Statutory Reserve (25%) 1,45,884
4, 18,932 By Surplus (Current Year)
To Balance c/d
4,55,403
4,55,403
at
Note : The above appropriat ions are only reported in the Annual Report for approval of members
After approval, they are
the AGM . They are not shown in the final accounts of the current year.
deducted in the Balance Sheet of the next year.
Illustration 14 :
as
From the following trial balance as on 31-3-2015 , prepare final accounts in the prescribe d format
per applicable legal provisions.
BHOOMI CHS LTD.
Trial Balance Cr.
Dr.
~
Particulars ~ Particulars
57 ,898 Advance from Members 3,42 ,038
Accumulated losses not written off
6,93 ,755 Collection from Members 92 ,50,036
Cash in Banks
389 Interest 13,60,399
Cash on Hand
9,63 ,266 Outstanding Expenses 5,39 ,205
Dues from Members
1,09 ,540 Outstandin g Creditors : Purchases 7,68 ,000
Equipmen ts
Fixed Deposit - Repairs Fund 1,05 ,26,523 Repairs Fund - Opening 82,46,873
Fixed Deposits 39 , 19,301 Security Deposit from Members 2,20 ,672
Major Repairs 9,66 ,608 Statutory Reserve Fund -
Office Expenses 1,74 ,424 Opening 41 ,27,816
Prepaid Expenses 34 ,899 Subscribe d :
Property Taxes and Expenses 57,63,512 1,280 Shares oft 50 each 64 ,000
Salaries 1,20 ,333 Tower Rent 36,126
Security 16,24,717
2,49,55, 165 2,49,55, 165

Additional information :
(a) Collection from members : ~
Property Taxes and Expenses 43 ,87,054
Establishment Expenses 29 ,21 ,350
Entrance fees 12,000
Transfer fees 4 ,000
Premium on transfers 1,00 ,000
Repairs Fund 18.25,632
92,50,036
(b) Interest
Interest - Savings Bank 1,05,506
lnteret - FD 71 ,900
Interest on Repairs Fund FD 11,82,993
13,60,399
(c) Depreciation 18,079
(d) Major Repairs to be adjusted from Repairs Fund 9,66,608
(e) Authorised Capital : 10,000 Shares oft 50 each .
Acco11nti11g and Statlltory Req11ireme11t.,· ,~{ Co-oper(lt/lle Societies 223
solution :

BHOOMI CHS LTD.

Or. Income and Expendit ure Account Cr.
Expenditu re r Income ,.
1. PROPER TY EXPENSE S 57 ,63 ,512 1. COLLECT ION FROM
2. ESTABLI SHMENT MEMBER S
EXPENSE S Property Expenses 43,87 ,054
Salaries 1,20 ,333 2. COLLECT ION FROM
Office Expenses 1,74,424 MEMBER S
Security 16,24,717 Establishm ent Expense s 29 ,21 ,350
3. OTHER EXPENSE S 3. INTERES T AND
Depreciat ion 18,079 DIVIDEND S
4. SURPLU S/ (DEFICIT ) (1,79,129 ) Interest - Savings Bank 1,05 ,506
Interest - Fixed Deposit 71 ,900
4. OTHER INCOME
Tower Rent 36 ,126
TOTAL 75,21,936 TOTAL 7,521,936
Balance Sheet

Liabilities ~ ~ Assets r -r
I. Share Capital I. Cash and Bank
Authorise d : Balances
10,000 Shares of~ 50 each 5,00,000 a. Cash on Hand 389
Subscribe d : b. Cash in Banks 6,~3,755 6,94 ,144
1,280 Shares of~ 50 each 64,000 II. Investme nts
~[Link] ription towards Fixed Deposits 39,19,301
Shares Nil Fixed Deposit -
II. Reserve Funds and Repairs Fund 1,05,26,5 23 1,44,45,824
Other Funds Ill. Staff Providen t Fund Nil
Statutory Reserve IV. Loans and Advance s
Fund - Opening 41 ,27,816 Prepaid Expenses 34 ,899
Entrance Fees 12,000 V. Sundry Debtors
Transfer Fees 4,000 Dues from Members 9,63 ,266
Premium on VI. Current Assets Nil
Transfers 1,00,000 42,43,816 VII. Fixed Assets
Repairs Fund - Equipmen ts 1,09,540
Opening 82,46,873 Less : Depreciat ion (18,079} 91,461
Addition to Fund 18,25,632 VIII. Miscellan eous
Interest on FD 11 ,82,993 Expenses and Losses Nil
Less : Expenses (9,66,608) h,02,88,890 IX. Other Items Nil
[Link] Providen t Fund Nil X. Income and Expendit ure
[Link] Loans Nil Ac.c ount
V. Unsecured Loans Nil Accumula ted losses
VI. Deposits not written off 57 ,898
Security Deposits XI. Current Losses 1,79 ,129
from Members 2,20,672
VII. Current Liabilities
and Provision s
Outstandi ng
Creditors : Purchases 7,68,000
Outstandi ng
Expenses 5,39,205
Advance from
Members 3,42,038 16,49,243
VIII. Unpaid Dividends Nil
IX. Interest Accrued
due but not paid Nil
X. Other Liabilities Nil
] ]./ A d"'mr etl Flmmcill l A ccmmt/11,: ([Link],m. Pt1rt-l/: SEM-1//J

XI. lncomo ond

Expendit ure Account NII
Totol 1,64,66,621 Total 1,64,66,621

llluatratlo n 15 : (P.Y. Appropri ations Adjusted In C. Y. BS)

as
From the following tria l balance as on 31 -3-2015, prepare final accounts in the prescribed format
per applicable legal provision s.
MAKER CHS LTD.

Dr. Trial Balance Cr. .

Particulars r Particulars (

Office expenses 7,083 Statutory Reserve Fund - Opening 33,667

Reliance Infra Deposit 6,195 Outstanding Expenses 2,38,654
Audit fees 4,000 Collection from Members 33,05,209
Property tax refund due from BMC 1,80,834 Income and Expenditure Account 1,73,094
Cash on Hand 295 Interest 2,28,118
Subscription to the Education Fund 54 Subscribe d :
Fixed Deposit - Repairs Fund 14 ,10,810 95 Shares of ~ 50 each 4,750
Professio nal Fees 3,000 Repairs Fund - Opening 13,98,030
1 Share of MOCH Federation 100
Major Repairs 14,26,686
Accountin g charges 78,000
Water Pump 31 ,927
Postage 3,349
Cash in Banks 1,64 ,950
Dues from members 1,21 ,630
Furniture and Fittings 1,037
Salaries . 49,400
Subscript ion of Housing Federation 500
Property Taxes and Expenses 18,91 ,672
53,81,522 53,81,522

Adjustments :
1. Appropriations to Statutory Reserve Funds from Previous Year's
~ 43,274
surplus approved in last AGM
~ 14,26,686
2. Major Repairs to be adjusted from Repairs Fund.
3. Depreciation @ 10% on Pump and Furniture.
4. Authorised Capital : 2 ,000 Shares of ~ 50 each
.t
5. Collection from members :
21 ,38,245
Expenses
1,800
Entrance Fees
11,65,164
Repairs Fund
33,05,209
t
6. Interest :
54,301
Interest on Savings Bank Ale
1,73,817
Interest on Repairs Fund FD
2,28,118

Solution :
MAKER CHS LTD.
Income and Expendit ure Account
er.
Dr.

Expenditu re Income

1. PROPER TY EXPENSE S 18,91,672 1. COLLECT ION FROM

MEMBER S 21 ,38,245
2. ESTABLI SHMENT
2. INTERES T AND
EXPENSE S
49,400 DIVIDEND S
Salaries Bank 54,301
7,083 Interest - Savings
Office Expenses
Accou11ting and Statutory Req11ire111e11ts of Co-operative Societies 225

Postage 3,349
Subscription to the Education Fund 54
Subscription of Housing Federati on 500
Audit Fees 4 ,000
Professional Fees 3 ,000
Accounting Charges 78 ,000
·3, OTHER EXPENS ES
Deprecia tion
- Pump 3,193
- Furn itu re -104
4. SURPLU S / (DEFICI T) 1,52 ,191
TOTAL 21,92,54 6 TOTAL 21 ,92,546

Balance Sheet

L/abllltles ( · ( Assets
I
( (
I. Share Capital I. Cash and Bank
Authorised : Balance s
2,000 Shares oH 50 each 1,00,000 a. Cash on Hand 295
Subscrib ed : b. Cash in Banks 1,64,950 1,65 ,245
95 Shares of ~ 50 each 4 ,750 II. Investm ents
I-A. Subscri ption towards 1 Share of MOCH
Shares Nil Federati on 100
II. Reserve Funds and Fixed Deposit -
Other Funds Repairs Fu nd 14,10,8 10 14 ,10,910
Statutor y Reserve Fund Ill. Staff Provide nt Fund Nil
Opening 33 ,667 IV. Loans and Advanc es Nil
Add : Tfd . From P.Y. V. Sundry Debtors
Surplus 43 ,274 Dues from Member s 1,21 ,630
Add : Entrance Fees 1,800 78 ,741 Property Tax _R efund
Repairs Fund - due from BMC 1,80,834 3 ,02,464
Opening 13,98 ,030 VI. Current Assets Nil
Addition to Repairs VII. Fixed Assets
Fund 11 ,65 ,164 Water Pump 31 ,927
Interest on Repairs Less : Depreciation (3,193) 28 ,734
Fund FD 1,73 ,817 Furniture and Fittings 1,037
Less : Expense s {1 4,26,686} 13,10,325 Deprecia tion on
Ill .Staff Provide nt Fund Nil Furniture (104) 933
[Link] Loans Nil VIII. Miscella neous
V. Unsecur ed Loans Nil Expens es and Losses
VI. Deposit s Nil
Nil IX. Other Items
VII. Current Liabilitie s Reliance Infra Deposit
and Provisio ns 6 ,195
X. Income and Expend iture
Outstand ing Expense s 2,38 ,654 Accoun t
VIII. Unpaid Dividen ds Nil
Nil XI. Current Losses
IX. Interest Accrued due Nil
but not paid Nil
X. Other Liabilitie s Nil
XI. Income and
Expenditure Accoun t
Surplus tor Last year 1,73 ,094
Less : Appropriations (43 ,274)
Balance b/d 1,29 ,820
Add : Current Surplus 1,52,190 2,82,011
Total 19,14,481 Total ~9,14,481
116 Atl"'mce,I Flmmclt1/ Accm111tl11g (M. Com. Part-I/: SEM-//JJ
Plan for Dlspoaal of Surplus Funds [S. 79(1A)(c) / Bye-law No. 147]

Dr. Momorondu m Appropriati on Account Cr.

Particulars
, Part/culsrs r -
To Statut ory Rese rve (25%) 38,048 By Balance b/d 1,29,820-
To Balance c/d 2,43 ,962 By Surplus (Current Year) 1,52, 190
2,82 ,010 2,82,010
-
Note : The above appropriations are only reported In the Annual Report for approval of members at
th e AG M . They are not shown In the final accounts of the current year. After approval, they are
deducted in th e Balance Sheet of the next year. Thus, In the above Balance Sheet, the
appropriati ons for the previous year ere adjusted from the surplus of the previous year.
Illustration 16 : (Comprehe nsive)
From the following trial balance as on 31 -3-2015 , prepare final accounts in the prescribed format as
per applicable legal provisions .
OM CHS LTD.
Dr. Trial Balance Cr.

(
Particulars r Particulars
Subscription of Housing Federation 2,748 Members Contribution for Building 9,27,448
Cash in Banks 3,98 ,623 Income and Expenditure Account 3, 10,545
Electricity Charges 28,410 Interest 1,22,786
Water Pump 276 Subscribed :
Insurance Charges 16,202 11 O Shares oft 50 each 5,500
Security 58 ,500 Sale of Scrap 1,700
BMC Deposit for Water 1,000 Advance from Members 29,974
Staff Advance 44 ,000 Statutory Reserve Fund - Opening 2,41 ,230
Salaries 60 ,100 Collection from Members 8,07,295
Prepaid Insurance 15,557 Sinking Fund - Opening 10 , 18,230
Meetings Expenses 27 ,650 Outstanding Expenses 26,210
Dues from Members 28 ,698 Repairs Fund - Opening 6,73 ,849
Property Taxes 1,51 ,410
Furniture and Fittings 4,531
Accounting Charges 15,000
BEST Deposit 1,750
Repairs and Maintenance 38 ,066
Land and Building 9,27 ,448
Major Repairs 6,84 ,545
Professional Fees 4,000
1 Share of MOCH Federation 100
Education and Training Fund 66
Fixed Deposits 15,47,000
Office Expenses 43 ,600
Postage 2,044
Audit Fees 5,494
Water Charges 57 ,892
Cash on Hand 57
41,64,767 41,64,767

Additional Information :
f
(a) Collection from Members
6,07,443
- For Expenses 600
- Entrance Fees 1,95,252
- Repairs Fund 4000
- Sinking Fund 807,295
Acco1111ting and Statutory R1..•q11ir,•me111.. ,~[ Co-opcrt1th•e Societie.. 227
(b) Interest
Interest
:
- Savings Bank 12,034"
Interest on SF FD 91 ,640
Interest on Repairs Fund FD 19 ,112
1.22.786
(c) Major Repairs to be adjusted from Repairs Fund.
(d) Depreciation @ 10% on Pump and F urniture .
Solution :

OM CHS LTD.
or. Income and Expenditure Account Cr.

Expenditure ~
Income r
1. PROPERTY EXPENSES 1. COLLECTION FROM
Property Taxes 1,51,410 MEMBERS 6,07,443
Water Charges 57 ,892 2. INTEREST AND DIVIDENDS
Electricity Charges 28,410 Interest - Savings Bank 12,034
Repairs and 3. OTHER INCOME
Maintenance 38 ,066 Sale of Scrap 1,700
Insurance Charges 16,202 2 ,91 ,980
2. ESTABLISHMEN T
EXPENSES
Salaries 60 ,100
Office Expenses 43 ,600
Postage 2 ,044
Education and
Training Fund 66
Subscription of
Housing Federation 2 ,748
Audit Fees 5,494
Meetings Expenses 27,650
Professional Fees 4 ,000
Security 58,500
Accounting Charges 15,000 2, 19,202
3. OTHER EXPENSES
Depreciation
- Pump 28
- Furniture 453 481
4. SURPLUS/ (DEFICIT) 1,09 ,514
TOTAL 6,21 ,177 TOTAL 6,21,177
Balance Sheet

Liabilities ~ ~ Assets ~ ~
I. Share Capital I. Cash and Bank
Authorised : ? Balances
Subscribed : a. Cash on Hand 57
11 0 Shares of ~ 50 each 5,500 b. Cash in Banks 3,98,623
1-A. Subscription towards II. Investments
Shares Nil 1 Share of MOCH
11. Reserve Funds and Federation 100
Other Funds Fixed Deposits 15,47,000 15,47, 100
Statutory Reserve Fund Ill. Staff Provident Fund Nil
Opening 2,41 ,230 IV. Loans and Advances
Entrance Fees 600 2,41 ,830 Staff Advance 44,000
Sinking Fund - Prepaid Insurance 15,557
Opening 10,18,230 V. Sundry Debtors
Addition to Sinking Fund 4,000 Dues from Members 28,698
Interest on SF FD 91,640 11,13,870 VI. Current Assets Nil
118 Ad,,anced Fi11a11cia/ Accmmting ([Link],m. Part-II: SEM-1/J)

Repairs Fund - VII. Fixed Assets

6,73 ,849 Land and Building 9,27,44 8
Opening
Water Pump 276
Addition to Repa irs Fund 1,95 ,252
Less : Depreciation (28) 24 8
Interest on Repairs
19,112 Furniture and Fittings 4,531
Fund FD
Less : Expenses (§,84 ,545) 2,03 ,668 Depreciation on
Furniture (453) 4,07 8
Members Contribution
for Bu ilding 9,27,448 VIII. Miscellaneous
Nil Expenses and Losses Ni
[Link] Provident Fund
[Link] Loans Nil IX. Other Items
Nil BEST Deposit 1,750
V. Unsecured Loans
Nil BMC Deposit for Water 1,000 2,75 0
VI. Deposits
VII. Current Liabilities X. Income and Expenditure
and Provisions Account Nil
Outstanding Creditors : XI. Current Losses Nil
For Expenses 26,210
Advance from Members 29 ,974
VIII. Unpaid Dividends Nil
IX. Interest Accrued
due but not paid Nil
X. Other Liabilities Nil
XI. Income and
Expenditure Account
Surplus fo r Last year 3,10,545
Less : Approp riations Nil
Add : Current Surplus 1,09 ,514
Total 29,68,559 Total 129,68,559

Plan for Disposal of Surplus Funds [S. 79(1A)(c) / Bye-law No. 147]
Dr. Memorandum Appropriation Account Cr.

Particulars ~ Particulars ,;, ·, ,,.,:::;, ~

To Statutory Reserve (25 %) 27 ,379 By Balance b/d 3, 10,546

To Balance c/d 3,92 ,681 By Surplus (Current Year) 1,09 ,514
4,20 ,060 4,20,060

Note : The above appropriations are only reported in the Annual Report for approval of members at
the AGM. They are not shown in the final accounts of the current year. After approval, they are
deducted in the Balance Sheet of the next year.
Illustration 17 :
From the following trial balance as on 31 -3-2015, prepare final accounts in the prescribed format as
per applicable legal provisions.
VASANT CHS LTD.

Particulars ·
Cash in Banks 9,77,794
Cash on Hand 2,116
Collection for Establishment Expenses 28 ,22,000
Collection for Property Expenses 1,23,71 ,068
Depreciation 4,680
Electricity Charges 11,90,914
Equipments 1,88 ,041
Fixed Deposits 27,89,795
Housekeeping 15,94,817
Interest - Fixed Deposit 8,122
Interest - Savings Bank 68,042
Land and Building 1, 13,91,927
Members Contribution for Building 1,13,91,927
Prepaid Insurance · 1,28 ,262
Accounting and Stat11tm·y Rcq11irt•m,•111.-. ,~[ Co-0111•r11th,c Socl,•tlc.-. 229
propert y Taxes a nd Insuran ce
97,5 0 ,0 24
Reliance Infra Depos it
1, 12 ,000
security
11 ,31 ,155
statutor y Reseiv e F und - O pening
26,87 ,6 10
subscri bed : 1,660 Shares of ~ 50 each
83 ,000
Tower Rent
75 ,809
w ater Ch arg es
2,46 ,053
Additional Inform ation :
Authoris ed C apital : 4 .000 Sh a res of ~ 50 each .
Solution :

VASAN T CHS LTD.

or. Income and Expend iture Accou nt Cr.
Expenditure ~ Income (
1. PROPE RTY EXPEN SES
1. COLLE CTION FROM
Propert y Taxes and Insuran ce 97 ,50 ,024 MEMB ERS
Water Charge s 2,46 ,053 Propert y Expens es 1,23,71 ,068
Electric ity Charge s 11 ,90 ,914 Establi shment Expens es 28,22,0 00
2. ESTAB LISHME NT EXPEN SES 2. INTERE ST AND DIVIDE NDS
Housek eeping 15,94,8 17 Interest - Saving s Bank 68 ,042
Securit y 11 ,31 , 155 Interes t - Fixed Deposi t 8,122
3. OTHER EXPEN SES 3. OTHER INCOM E
Deprec iation 4,680 Tower Rent 75,809
4. SURPL US/ (DEFIC IT) 14,27 ,398
TOTAL 1,53,45 ,041 TOTAL 1,53,45 ,041
Balanc e Sheet
Liabilities ~ Assets I
'-.~
I. Share Capita l I. Cash and Bank Balanc es
Authorised : a. Cash on Hand
4,000 Shares of ~ 50 each 2 ,116
2,00,00 0 b. Cash in Banks 9,77 ,794
Subscr ibed : II. Investm ents
1,660 Shares of~ 50 each 83 ,000 Fixed Deposi ts
I-A. Subscription towards Shares 27,89 ,795
Nil Ill. Staff Provid ent Fund Nil
II. Reserv e Funds and IV. Loans and Advan ces
Other Funds Prepaid Insuran ce
Statuto ry Reserv e Fund - 1,28,26 2
V. Sundry Debtor s Nil
Openin g 26 ,87 ,610 VI: Curren t Assets
Membe rs Contrib ution for Nil
VII. Fixed Assets
Building 1, 13,91 ,927 Land and Building
Ill. Staff Provid ent Fund 1, 13,91 ,927
Nil Equipm ents 1,88 ,041
IV. Secure d Loans Nil VIII. Miscel laneou s Expens es
V. Unsecu red Loans Nil and Losses Nil
VI. Deposi ts Nil IX. Other Items
[Link] rent Liabilit ies and Relianc e Infra Deposi t
Provis ions 1, 12,000
Nil X. Income and Expend iture
VIII. Unpaid Dividen ds Nil Accou nt
IX. Interes t Accrue d due Nil
XI. Curren t Losses Nil
but not paid Nil
X. Other Liabilit ies Nil
XI. Income & Expend iture
Accoun t
Surplus for Last year Nil
Less : Approp riations Nil
Add : Current Surplus 14,27,3 98
Total 1,55,89 ,935 Total 1,55,89 ,935
130 A,/,,a11rt•tl "111,mcla/ Acc·o1111ti111( (M. C11111, 1'11rt-lI: SEM-1 //)

Plan tor Dl1po11I of Surplua Fund• [S. 791(A)(o) / Bye-law No. 147]

Dr. Momorondum Approprlntlon Account Cr.

Particulars ( Partlculsrs r
To Statutory Reso,ve (25%)
. 3,56 ,850 By Surplu s (Current Yea r) 14,27,398
To Balance c/d 10,70,548
14 ,27,398 14,27,398

Note : The above appropriations are only repo rted In the Annual Report for approval of members at
the AGM . They are not shown in th e final accounts of the current year. After approval, they are
deducted in th e Balance Sheet of the next year.
Illustration 18 :
From the following trial balance as on 31 -3-2015 , prepare final accounts in the prescribed format as
per applicable legal provisions.
SWAMI CHS LTD.
Trial Balance

Particulars r
1 Share of MDC Co-op . Bank 1,000
Accounting Charges 60 ,000
Accrued Interest on FD 7,39 ,719
Collection for Sinking Fund 15,62,547
Advance from Membe rs 3,28, 125
Advances to Staff 10,500
Audit Fees 13,348
BEST Deposit 40,370
Cash in Banks 7,34,970
Cash on Hand 573
Collection from members for Establishment Expenses 36,41 ,061
Collection from members for Property Expenses 88 ,63,098
Dues from members 27,00,550
Entrance fees 1,600
Equipments 17,94,359
Fire Fighting Expenses 1,27,526
Fixed Deposits 1,67, 16,640
Fixed Deposits - Sinking Fund 70,36,833
Income & Expenditure Account 3,37,866
Interest - Fixed Deposit 16,92,015
Interest - Savings Bank 90,524
Interest on SF FD 6,89,899
Office expenses 4,94,923
Outstanding Expenses 8, 16,262
Prepaid Expenses 5,38,378
Property tax refund due from BMC 6,36,203
Property Expenses 1,05,25, 156
Salaries 6,01 ,060
Security 15,99,588
Security Deposits from members 17,74,010
Sinking Fund - Opening 2,30,54764
Statutory Reserve Fund - Opening 13,73,745
Subscribed : 1,685 Shares of ~ 50 each 84,250
Subscription to the Education Fund 990
Tower Rent 58,920
Transfer fees 4,000

Additional Information :
1. Authorised Capital : 2,000 shares of ~ 50 each.
2 . Depreciation on Equipments - ~ 2,36,067
Accounting [Link]. Statutory Requirement~ o•"Co
, 'J -opera,·1ve S oc,ehes
. .
231
solution:

SWAMI CHS LTD.

or. Income and Expenditure Account
. Cr.
Expenditure r r Income r r ~
1. PROPERTY EXPENSES 1,05,25,156 1. COLLECTION
2. ESTABLISHMENT
EXPENSES FROM MEMBERS
Salaries Property Expenses 88,63,098
6,01 ,060 Establishment
Office Expenses 4,94 ,923 Expenses 36,41,061 1,25,04,159
Subscription to the
2. INTEREST AND
Education Fund 990 DIVIDENDS
Audit Fees 13,348 Interest - Savings
Security 15,99,588 Bank 90,524
Accounting Charges 60 ,000 Interest - Fixed
Fire Fighting
Deposit 16,92,015 17,82,539
Expenses 1,27,526 28 ,97,435 3. OTHER INCOME
3. OTHER EXPENSES
Tower Rent 58 ,920
Depreciation 2,36,067
4. SURPLUS / (DEFICIT) 6,86 ,960
TOTAL 1,43,45,618 TOTAL 1,43,45,618
Balance Sheet

Liabilities ,( ,,:/( Assets l, ( ( ',

I. Share Capital I. Cash and Bank
Authorised : Balances
2,000 shares of~ 50 each 1,00,000 a. Cash on Hand 573
Subscribed : b. Cash in Ban ks 7,34,970 7,35 ,543
1,685 Shares of~ 50 each 84 ,250 II. Investments
I-A. Subscription towards 1 Share of MDC
Shares Co-op, Bank 1,000
II. Reserve Funds and Fixed Deposits 1,67 ,16,640
Other Funds Fixed Deposits -
Statutory Reserve Sinking Fund 70 ,36,833
Fund - Opening 13,73,745 Accrued Interest
Entrance Fees 1,600 on FD 7,39,719 2,44 ,94,192
Transfer Fees 4 000 13 ,79,345 Ill. Staff Provident Fund Nil
Sinking Fund - IV. Loans and Advances Nil
Opening 2,30 ,54 ,764 Prepaid Expenses 5,38 ,378
Addition 15,62 ,547 V. Sundry Debtors
Interest on SF FD 6,89,899 2,53 ,07,210 Advances to Staff 10,500
[Link] Provident Fund Nil Dues from
[Link] Loans Nil Members 27,00,550
V. Unsecured Loans Nil Property Tax
VI. Deposits Refund due from
Security Deposits BMC 6,36,203 33,47,253
from Members 17,74,010 VI. Current Assets Nil
VII . Current Liabilities VII. Fixed Assets
and Provisions Equipments 17,94,359
Outstanding Less: Depreciation {2,36,067} 15,58,292
Expenses 8,16,262 VIII. Miscellaneous
Advance from Expenses and
Members 3,28,125 11,44,387 Losses Nil
VIII. Unpaid Dividends Nil IX. Other Items
IX. Interest Accrued BEST Deposit 40 ,370
due but not paid Nil x. Income and Expenditure
X. Other Liabilities Nil Account Nil
232 Adva11ced Fi11a11cial Acco11nting ([Link]. Part-II: SEM-IIJ)
-
XI. Income and XI. Current Losses Nil
Expenditure Account
Surplus for Last year 3,37 ,866
Less : Appropriations Nil
Add : Current Surplus 6,86,960 10,24,826
Total 13,07,14,028 Total t3,07, 14,028

Plan for Disposal of Surplus Funds [S. 79(1A)(c) / Bye-law No. 147]
Dr. Memorandum Appropriation Account Cr.

Particulars r · Particulars r
To Statutory Reserve (25%) 1,71 ,740 By Balance b/d 3,37 ,866
To Balance c/d 8,53 ,086 By Surplus (Current Year) 6,86,960
10,24,826 10,24,826

Note : The above appropriations are only reported in the Annual Report for approval of members at
the AGM. They are not shown in the final accounts of the current year. After approval, they are
deducted in the Balance Sheet of the next year.
Illustration 19 :
The following information is taken froni the books of the Rajkamal Co-operative Housing Society
ltd., Mumbai for the year ended 31st March 2013 :

Debit Balances r Credit Balances r

Purchase of land 1,98 ,500 Share Capital 5,250
Road Construction Account 9,250 (105 Shares of~ 50 each)
Furniture and Fittings 1,540 Reserve Fund 1,050
Water Pumps 3,600 Non-occupation Charges Fund 4,500
Salaries 2,900 Members' Contribution :
Audit Fees 150 - For Constructi on 8,64 ,600
Postage and Telegrams 60 - For Shares of Finance Society 40 ,000
Electricity Charges 2,800 - For Ad ministration Expenses 9,220
Municipal Tax 130 Intere st on Fixed Deposits 2,200
Repairs to Building 1,08 0 Interest on Savings Bank Account 50
Miscellaneous Expenses 890 Ground Fl oor Maintenance Fund 5,100
Expenses of Meeting 1,110 Dividend Received 3,000
Legal Charges 1,400 Loan from Maharashtra Co-op.
Investments : Housing Finance Society Ltd . 3,36,200
Shares of Maharashtra Co-op. Income & Expenditure Ale 4,450
Housing Finance Society Ltd. 40 ,000 (Bal. on 1-4-2012)
Shares in Mumbai District
Co-op. Bank 2,000
Outstanding dues from members :
- Loan to Members 3,36 ,200
- Instalments of Loan 3,000
- Accommodative Loan 19,000
- Contribution to Administration Exp. 400
- Penal Interest 450
·- Maintenance of Ground Floor 1,500
- Non-occupancy Charges 520
Cost of Construction of Buildings 5,84 ,500
Deposit with Mumbai's BSES 250
Deposit with Maharashtra Co-op.
Housing Finance For Solicitor
and Architect Fees 1,900
Fixed Deposit with Mumbai District
Co-op. Bank 56,000
Savings Account with Mumbai
District Co-op. Bank 6,340
Cash on hand 150
12,75,620 12,75,620
Accrnmtlnl( um/ Statutory Requ/ren [Link] t1/ Ct1-opera tive Socletie.,· 233
Addltlonal Informati on :
1. Furnlturo ond wotor pumps aro to bo depreciated at 10% p.a.
2. Ground floor molntona nco charges of " 250 due from members are not received .
3. During Mootlngs , gifts of " 800 we re given to members and the same Is not recorded
in the
book s of occounto .
4. 25% of th e curront year' s excess of income over expend iture Is proposed to be transferre
d to
Ro sorvo Fund after approva l of acco unts.
From tho information given above . yo u a re requ ired to prepare an Income and Expenditu re
Account
for th e year ondod 31 st March , 20 13 and a Bala nce Sheet as on that date.
Solution :

Rajkamal Co-opera tive Housing Society Ltd.

Dr. Income and Expendit ure Account For the Vear Ended 31-3-2013 Cr.

Expand/tu re ~ Income ~
To Mun icipal Tax 130 By Members ' Contributi on For
To Electricity Charges 2,800 Administration Expenses 9,220
To Repairs to Building 1,080 By Interest on Saving Bank A/c 50
To Salarie s 2,900 By Interest on Fixed Deposits 2,200
To Postage and Telegram s 60 By Dividend Received 3,000
To Audit Fees 150
To Expenses of Meeting 1,110
Add : Gift Expenses 800 1,910
To Legal Charges 1,400
To Miscellan eous Expenses 890
To De preciation :
- Furniture 154
- Water Pumps 360 514
To Excess Income over
Expend iture c/d 2,636
Tota l 14,470 Total 14,470
Balance Sheet as at 31-3-2013

Liabl/It/es
I. Share Capital
~ A$sets
l

.
, ~ , I

I. Cash and Bank

105 Share s oft 50 each Balances
fully paid 5,250 a. Cash on Hand 150
I-A. Subscrip tion toward s b. Saving Bank A/c with
Shares Nil Mumbai Dist. Co-op. Bank 6,340
II. Reserve Fund and II. Investme nts
Other Fund s Shares of Maharash tra
Reserve Fund 1,050 Co-op . Housing
N.O.C. Fund 4,500 Finance Society 40 ,000
Ground Floor Shares of Mumbai Dist.
Maintenance Fund 5,1 00 Co-op. Bank
Add : Outstanding 2,000
250 5,350 Fixed Deposits with
Contrlbut lon of Members : Mumbai Dist. Co-op. Bank 56 ,000
Fo r Construction 8,64,600 Ill. Staff Providen t Fund
Fo r Shares of Nil
IV. Loans and Advance s
Maharashtra Co-op. Loan to Members
Housing Finance Society 3,36,200
40 ,000 Instalments of Loan 3,000
Ill. Staff Providen t Fund Nil Accommo dative Loan
[Link] d Loans 19,000
V. Sundry Debtors
Loan from Maharasht ra Due from Members
Co-op. Housing Finance - Administration Expenses
Society Ltd. 400
3,36,200 - Penal Interest 450
V. Unsecure d Loans Nil - N.O.C. A/c 520
234 Advanced Financial Accmmtinl( (M. Com. Part-II : SP,M..lll)
VI. Deposits Nil - Ground Floor
V!I. Current Llabllltles Maintenance 1,600
and Provisions Add : Ou tsta nding ~5Q 1,750
Unpaid amount of VI. Current Assets Nil
Gifts during Meeting 800 VII. Fixed Assets
VIII. Unpaid Dividends NII Pu rchase of Land 1,98 ,500
IX. Interest Accrued Construction of
due but not paid Nil Buildings 5,84 ,500
X. Other Llabllltles Nil Road Construction 9,260
XI. Income and Expenditure Furniture and Fittings 1,540
Accounts Less : Depreciation liH 1,386
Last Year's Balance 4,450 Water Pumps 3,600
Add : Excess of Income Less : Depreciation ;.H~Q 3,240
of Cu rren t Year 2,636 7,086 VIII. Miscellaneous
Expenses and Losses Nil
IX. Other Items
Deposits with BSES 250
Deposits with M.H. Co-op.
Finance Society tor Solicitor
and Architect Fees 1,900
Total 12,64 ,836 Total 12,64 ,836

Working Notes :
(1) Non-occupancy Charges : If a member of the society has rented his premises, the society can
levy non -occupation charges . Thus non-occupation cha rge s ,s an income tor society. In th is
ex ample , as the 5% Non -occu pation Charge s Fund ,s given as such It Is considered as capital
receipt and added to that fund . Some socie ties cons ide r 11 ,s a revenue income and credit 11 to
Income and Expenditu re Ale .
(2) Transfer to Reserv e Fu nd : The effect of 25% of excess of income over expenditure to be
transferred to Reserve Fund is not given ,n cu rrent year's account as rt should be done in the
next ale year i. e. only after th e accoun ts are approved But II will be shown In the repo rt of the
Managing Committe e and its effect will be given in th o next year
(3) Penal Interest : If a membe r on th e socie ty pays Insta lm ent of loan afto r its due date. then
interest is charged fo r late payment and 11 Is known as Ponal In terest and it t>e,ng incomo of the
society, is credited to Income and Expend,turo Al e
(4) Rebate on Interest to MCH FS : If the socie ty pays all ,nsta lmonts of year In time. then II gets
rebate on intere st from th e MC Housing Financo Soc,o ty and 11 Is credited to Income and
Expenditure Ale . In some societies , the rebate of intorost roco,vod Is re funded to rts members
(5) MCHFS Lo an : The amoun t of Loan received from Maharash tra Co-op Housing Finance Society
and Loan to members will be same It Is just hke co ntm •transacuons and 111s shown on llab1htres
as well as Asset s side of the bal ance shee t of a housing socie ty
Illustration 20 :
The follow ing are the balances of Porasnath Co -op Housin g Society Lid for the year ended on
31 -3-2013 :

Debit Balances •
\' Credit Bnlnncos r
Purchase ol Land 5,22 ,000 Shore Copltol :
Expenses on Purchased Land 40 ,000 200 Shares of ~ 50 oach 10.000
Con struction of Building 12,00 ,000 Re serve Fund 13.500
Architect Fees for Building 30 ,000 Con tribut ion of Members :
Investments : For Land 5,20.000
ShAres of Maharasht ra Co-op. For Construction ol Bu11d1ng 12 ,4 7 000
Housing Finance Society ol For Road Construcilon 21 .000
~ 500 each 72 .000 For Shore s of Maharashtra Co-op
Shares ol Mumbai Dist. Co-op. Bank 4,500 Housing Finance Sooe ty n .ooo
250 For Adrn1n1stmt10n Expenses 9.000
Audit Foes
100 For D1walt Festiva l 2 200
Land Revenue
600 Members Personal Account.s 27 .000
Insurance Pre mium
Electric Charges 4,800 Rebate of Intere st rocoIvod from
400 Housing Finance Soooty 2.600
Printing and Stationery
tf cc(llllllillg and Statutory Requir,•mttm.~ ,~r c,,_,,,,,.,a,h•r Soc/1•1/,,.. 135
salaries to Staff 3,200 Flot Tro nsfor Promlum 22,000
fu rniture and Dead Stock ,t ,400 Dl vldond on Shoros 6,000
Electric Motor and Pumps otc. 6,200 lntoros t on S£ivlng Accoun t 80
Loan to Mernbors 8,20,000 Non -occupancy Charg es 2,000
Fixed Deposi t with Mumbai Dist. Ponal lntoro st 600
Co-op. Bank 40 ,000 ln como and Expenditure Al e 620
saving Ne with Mumbai Dist. (on 1-4-12)
Co-op. Bank 2, 800 Loan from Maharasht ra Co -op .
c ash on hand 650 Housing Finance Society Ltd . 8,20 ,000
Salaries of Electrici an 1,200
Electric Fittings 11 ,200
Repairs to Water-line 2,400
Wages of Cleaning Water-tanks 300
Diwali Festival Expenses 4,400
Dues from Members for Loan
Instalmen ts 4,200
27 ,75,600 27,75,600
Additional Informations :
(1) In the last managing committee 's meeting , the transfer of flat of one member during the year has
been approved and transfer premium of< 4,400 is receivable from the member.
(2) Provide depreciation at 10% on Furniture and Electric motor and pump .
(3) Inte rest of< 3 ,200 on Fixed Deposit with Mumbai Dist. Co-op . Bank is due but not rece ived.
(4) Penal inte rest of < 160 and non -occupancy cha rges oft 460 are due but not received from the
members.
(5) A bill of< 250 for repairs of electric motor is unpaid.
From the above mentioned information , you are required to prepare Income and Expenditure Account
fo r the year ended 31-3-2013 and Balance Sheet as on that date.
Solution :
Parasnath Co-operative Housing Society Ltd.
Dr. Income and Expenditure Account For the Year Ended 31-3-2013 Cr.
Expenditure ~ Income ~

To Aud it Fees 250 By Contribution of Members for

To Land Revenue 100 Administration Expenses 9,000
To Insurance Premium 600 By Contribution for Diwali
To Electric Charges 4,800 Festival 2,200
To Printing and Stationery 400 By Non-occupancy Charges 2,000
To Salaries to Staff 3,200 Add : Outstanding 460 2,460
To Salaries of Electrician 1,200 By Penal Interest 600
To Repairs to Water-line 2,400 Add : Outstanding 160 760
To Wages for Cleaning By Rebate of Interest
Water-tanks 300 Received 2,600
To Diwali Festival Expenses 4,400 By Interest on Saving Account 80
To Depreciation : By Outstanding Interest on
Furniture 440 Fixed Deposit 3,200
Electric Motor & Pumps 620 1,060 By Dividend on Shares 6,000
To Repairs of Electric Motor 250
To Excess of Income over
Expenditure 7,340
Total 26,300 Total 26,300
Balance Sheet as at 31-3-2013

Liabilities ~ Assets
I. Share Capital I. Cash and Bank
200 Shares of < 50 each Balances
fully paid 10,000 a. Cash on Hand 650
11. Reserve Fund and b. Saving Ale with Mumbai
Other Funds Dist. Co-op. Bank 2,800
236 Atlwmcetl Fimmcl"I AC<:m111t/11g (M. Com. /'(lrf-1 /: SEM-l l l)

Reserve Fund 13,500 II. Investments

Flat Transfer Premium 22,000 Shares of Maharashtra
Add : Receivable for the Co -op . Housing
year ~.~OQ 26,400 Finance Society 72,00 0
Contribution of Members : Shares of Mumbai
For Land 5,20,000 Dist. Co-op . Bank 4,500
For Construction of Fixed Deposits with
Building 1.2,47,000 Mumbai Dist.
For Road Construction 21 ,000 Co-op. Bank 40,000
For Shares of Add : Outstanding
Maharashtra Co-op. Interest ~. 2QQ 43 ,200
Housing Finance Society 72,000 Ill. Staff Provident Fund NII
[Link] Provident Fund Nil IV. Loans and Advances
[Link] Loans Loan to Members 8,20,000
Loan from Maharashtra Co-op. Loan Instalments due
Housing Finance Society 8,20,000 from Members 4,200
V. Unsecured Loans Nil V. Sundry Debtors
V I. Deposits Nil Due from Members
V II. Current Liabilities - Transfer Premium 4,400
and Provisions - Penal Interest 160
Members' Personal Ale 27 ,000 - Non-occupancy Charges 460
Unpaid Expenses of VI. Current Assets Nil
Motor Repairing 250 VII. Fixed Assets
VIll. Unpaid Dividends Nil Purchase of Land 5,22 ,000
IX. Interest Accrued Add : Expenses on
due but not paid Nil Purchase 40,000 5,62 ,000
X. Other Liabilities Nil Construction of
XI. Income and Building 12,00 ,000
Expenditure Account Add : Architect Fees 30,000 12,30 ,000
Last Year's Balance 620 Furniture & Dead Stock 4,400
Add : Excess of Income Less : Depreciation 440 3,960
of Current Year 7 340 7,960 Electric Motor and
Pumps etc. 6,200
Less : Depreciation 620 5,580
Electric Fittings 11 ,200
VIII. Miscellaneous
Expenses and Losses Nil
IX. Other Items Nil
X. Income and Expenditure
Account Nil
XI. Current Losses Nil
Total 27,65,110 Total 27,65,110

5. CONSUMER CO-OPERATIVE SOCIETIES

5.1 DEFINITION AND OBJECTIVES

Under S.2(9) of Maharashtra Co-operative Societies Act 1960 'Consumer Society' means a society,
the object of which is-
(a) The procurement, production or processing, and distribution of goods to or the performance of
other services for, its members as also other customers; and
(b) The distribution among its members and customers, in the proportion , prescribed by rules or by
bye-laws of the society, of the profits accruing from such procurement production or processing
and distribution .
Consumers Cooperative Society strives to promote interest of its members or other consumers by
supplying required quantity of qua I ity goods at reasonable prices by eliminating intermediaries
between buyers and sellers/manufacturers.
,4ccounting and Statutory Req11ireme11ts of Co-operative Societies 237
5.2 . CATEGORIES
The consumers' co-ope_rative societies can be classified in following categories.
(1) Primary Consumer ~ocieties: Primary Consumer Societies meet the needs of the direct customers
who purchase for their own consumption, mostly middle income group customers. The controlled
goods are purchased through concerned central/wholesale stores to which, it is affiliated. The
other commodities are purchased in bulk from open market by the managing committee/purchas ing
committee members at competitive prices. The fair price shops are primary societies. These
societies may be institution based (restricted to employees of a particular industry or commercial
organisation etc.) or open to pub! ic.
(2) Central Wholesale Stores : Central Wholesale Stores deal in wholesale business. They are
normally located at District places _a nd fulfil the needs of primary societies at the district/village
levels. These also have their own retail stores, branches and departments.
(3) Departmental Stores : In metropolitan cities super markets or departmental stores (e.g. Apna
Bazar) are set up which stock all requirements of consumers under one roof for the convenience
of consumers. These societies receive substantial amounts by way of share capital , contributions,
loans, and special financial assistance for procuring suitable premises, installations, interior
decoration and also for buying furniture and fittings. ·

5.3 SPECIAL FEATURES OF ACCOUNTING

(1) Type of Society : The accounting system for all three categories of these societies will have to be
different as per its size, volume and requirements. In primary societies manager himself may
write the accounts, whereas in departmental stores adequate staff is employed for the purpose.
Separate record for controlled items is required by supply department.
(2) Sales : Sales are mostly for cash. Credit sales are made either against deposits maintained or
advances collected from members and others or against employer 's assurance to deduct dues
from wages payable to its employees.
(3) Cash Memo/Bills: Cash memos and bills with all details are issued for cash/credit sales respectively.
(4) Sales to Members : Sales made to members are recorded in pass books given to them .
(5) Selling Prices : Selling prices are fixed so as to cover all expenses as a fair margin of profits but
no unfair advantage can be taken of fluctuations in the market and no attempt at profiteering or
raising prices, be made, though done by other dealers. No cornering or overstocking be adopted.
Holding the price time and equitable distribution of commodities in short supply are the main
objectives of the consumers movement in India, only a small margin just enough to meet the
overheads and is reasonable may be added.
(6) Bonus to Customers : Regular customers are given a share in the profits of the society by way of
bonus or rebate in proportion to the purchases made by them from the society.
(7) Committees: The consumers' store functions through Managing Committee/Central Committee/
Purchase Committee, price fixation committee and few other committees as appointed. The
committee members may be given honorarium, ifthere are sufficient profits.
(8) Working Capital : The working capital is raised through share capital, trade credits from suppliers
and wholesalers. The departmental stores and central societies are sanctioned cash credits by
Ceritral Co-operative Banks under Central Government guarantee scheme. Generally a fortnight 's
credit is allowed to primary societies purchasing from them.
(9) Appropriations : Appropriation of Profit -
25 % of net profit - transferred to reserve fund & invested outside the business of the society.
2 % of net profit transferred to 'dividend equalisation reserve ' .
Out of balance 75 % can be used for granting purchase bonus to patrons by way of rebate in
future purchases.
Balance profit, as decided in general meeting.
 SEM -///)
Atll'tmt·e,I F/11a11dal Acc111111t/11!( ([Link]. Part -II:

6. ILLUSTRATIONS : CONSUMER CO-OPERATIVE SOC

IETY
J
[Link] 21 :
,
umers Co-operative Stores Ltd. as on 31-3-2011
From the following Trial Balance of Apna Cons 11 and Balan ce Shee t as
the year ende d 31 -3-20
prepare Trading and Profit and Loss Account for
'N' form, after consi dering the adjustments given thereafter :
on that date in the prescribed
Trlal Balan ce as on 31-3-2011
Dr. r Cr. r
Particular '
... .. . ......... 33,600
Share Capital 6,000
Reserve Fund
...... ... ......
...... ....... .. 4,000
Creditors
O) ... ... ... ... ... 17,600
Profit and Loss Account (Balance as on 1-4-201 39,20 0
Opening Stock ... ... ....... ..
............. .. 12,40 0
Furniture
.. . ...... ... ... 3,200
Container Deposit
............... 30,00 0
Salaries
....... ....... . 6,000
Debtors
Commission .. . ...... ... ... 8,800
Rent and Taxes ............ ... 6,000
Postage and Telephone ......... ...... 800
.. . ... .. ...... . 1,800
Travelling Expenses
...... ...... ... 1,400
Printing and Stationery
...... .... .. ... 200
Admission Fees
Purchases ....... .. ...... 6,34,000
Freight ... .. . ... ...... 12,00 0
.. . ... ...... ... 4,000
Wages
Investments ... ... .. ..... .. 60,00 0
Sales ... .. ...... .... 7,62,000
Cash in Hand ... .. ...... .... 600
Bank Balance ....... .. ... ... 4,000
Development Fund ...... ...... ... 800
...... .. . ...... 8,24,200 8,24,200

Adjustments :
1. Closing Stock was valued at ~ 44,000.
le was ~ 2,000 .
2. Rent was outstanding ~ 400 and Commission payab
3. Salary of~ 800 was paid in advance.
4. Interest accrued on investment~ 2,000.
5. Depreciate Furniture at 10% p.a.
0, Development Fund ~ 2 000 and to Reserve
6. It is proposed to ~ransfer to : Building Fund ~ 12,00 (Oct. 2011, adapted)
Fund 25% of current year's net profit.
Solu tion:
Apna Consumers Co-operative Sto~es Ltd.
Ended 31-3-2011
Dr. Trading & Profit & Loss Account For the Year Cr.

Particulars ( Particulars (

To Opening Stock 3,92,000 By Sales 7,62,000

To Purchase 6,34,000 By Closing Stock 44,000
To Freight 12,000
To Wages 4,000
To Gross Profit c/d 1, 16,800
8,06,000 8,06,000
To Salaries 30,000 By Gross Profit 1, 16,800
Less : Prepaid 800 29,200 By Accrued Interest on Investment 2,000
To Rent and Taxes 6,000 By Other Income : Admission Fees 200
Add : Outstanding 400 6,400
Acco11nting and Stat utor y Requ irem ents of Co-o
pera ti 11e Soci etie... 2J'J
To post age
800
To Print ing and Stati oner y
1,40 0
To Depr eciat ion on Furn iture
1,24 0
To Othe r Expe nses
Com miss ion 8,80 0
Add : Outs tand ing 2,00 0
Travelling Expe nses 1.80 0 12,6 00
To Net Profi t 67,3 60
1, 19,0 00
1,19 ,000
Bala nce Shee t as on 31-3-2011

Llsb l/ltle s ~ Asse ts ~

I. Shar e Capi tal
I. Cash and Ban k Bala nces
Issue d & Paid -up 33,6 00 Cash -in-h and 600
II. Rese rve Fun d and Othe r Fund s
Bank Bala nce 4 ,000
Rese rve Fund 6,00 0 II. Inve stme nts 60,0 00
Deve lopm ent Fund
800 Add : Inter est accr ued
111. Staff Prov iden t Fund
NIL on Inve stme nt 2,00 0 62 ,000
IV. Secu red Loan s
NIL Ill. Prov iden t Fun d Inve stme nt NIL
V. Uns ecur ed Loan s
NIL IV. Loan s and Adv ance s NIL
VI. Dep osits
NIL V. Sun dry Deb tors 6 ,000
VII.C urre nt Liab ilitie s & Prov ision s
VI. Curr ent Asse ts
Cred itors
4,00 0 Stoc k 44,0 00
Outs tand ing Rent
400 VII.F ixed Asse ts
Outs tand ing Com miss ion
2 ,000 Furn iture 12,4 00
VIII. Unc laim ed Divid end
NIL Less : Depr eciat ion 1,24 0 11 ,160
IX. Inter est due but not paid
NIL VIII. Misc . Expe nses and
X. Othe r Liabilities
NIL Loss es (not w/o)
XI. Prof it and Loss Acco unt
Adva nce Sala ries 800
Bala nce as on 1-4-201 O 17,6 00
IX. Othe r Item s
Curr ent Year 67,3 60 84,9 60 Cont aine r Depo sit 3,20 0
X. Profit and Loss A/c NIL
XI. Curr ent Loss es NIL
1,31 ,760
1,31 ,760
Plan for Disp osal of Surp lus Fund s [S.
79(1 A)(c ) / Bye- law No. 147]
Dr. Mem oran dum Appropriation Acco unt
Cr.
Parti culars ~ Parti cular s ·
~
To Build ing Fund 12,0 00 By Bala nce b/d
To Deve lopm ent Fund s 17 ,600
2,00 0 By Net Profi t
To Rese rve Fund s (25% of 67,3 60) 67 ,360
16,8 40
To Bala nce c/d 54,1 20
84,9 60
84 ,960
Note : No actu al appropriation out of curre
nt year 's profit can be mad e witho ut the appr
gene ral body. oval of the
The abov e M emo rand um Prof it a nd Loss
(App ropr iatio n) A/c show s only the "pro
appr opria tions . pose d"
Illustration 22 :
From the follow ing Trial Bala nce of Sadh na
Cons ume r's Co-o pera tive Soci ety Ltd. as
2013 prep are the Fina l Acco unts in the pres on 31st Marc h
cribe d format.
·
Trial Balance
Particulars Dr. ~ Cr. ~ Parti cular s Dr. ('
Share Capi tal Cr.~
1,00 ,000 Purc hase s 12,05 ,000
Deposit from Mem bers
50,0 00 Du e from Cust ome rs 56,0 00
Sale s
14,50,000 Carr iage Inwa rds
Purc hase s Retu rns 4,00 0
6,00 0 Sale s Retu rns 3,00 0
140 Adt1a11ce,I Financial Accounting (M. Com. Part-I/: SEM-JJJJ
11 ,ooo Rent (for 1o months) 10,000
Due to Suppliers 2,000
11,000 Audit Fees
Interest on Investment 3,000
2,000 Sales Tax
Rebate Received 50,000
4,000 Staff Salary
Common Good Fund 10,000
3,000 Printing and Statione ry
Price Fluctuation Fund 2,00,000
25,000 Investme nts
Reserve Fund 30,000
200 Stock in Trade
Cash in Hand 2,600
76,200 Interest Paid
Cash at Bank
Furniture 10,000
16,62,000 16,62,0oo

Adjustments :
(1) Value of Closing Stock on 31st March , 2013 was~ 75,000.
(2) Depreciation on Furniture @ 1 0% p.a. for full year.
(3) Interest accrued on Deposits ~ 5,000 and interest accrued on investm ent~
1,200.
(4) Salary includes advance of~ 6,000 paid against salary of April, 2013.
(March 04, adapted)
(5) Outstanding Sales Tax of~ 2,000.
Solution :
In the Books of Sadhana Consumer Co-op. Soc. Ltd.
Cr.
Dr. Profit & Loss Account For the Year Ended 31-3-2013

r Partfculars r
Particulars
30 ,000 By Sales 14,50,00 0
To Opening Stock 3,000 14,47,000
To Purchas es 12,05 ,000 Less : Returns
ByClosin g Stock 75,000
Less : Returns 6,000 11,99,000
To Carriage Inwards 4,000
To Gross Profits 2,89 ,000
15,22,000 15,22,000

By Gross Profit b/d 2,89,000

To Interest Paid 2,600
7,600 By Interest Received 12,200
Add : Outstanding 5,000
44 ,000 By Rebate Received 2,000
To Salaries
To Rent 12,000
To Sales Tax 5,000
To Audit Fees 2,000
To Printing and Stationery 10,000
To Depreciation on Furniture 1,000
To Net Profit tfd. to B/S 2,21 ,600
3,03,200 . 3,03,200

Balance Sheet as at 31-3-2013

Lial:!llities r Assets r
I. Share Capital I. Cash and Bank Balances
Authorised , Issued & Paid-up 1,00 ,000 On hand 200
and Other Funds At Bank 76,200 76,400
II. Reserve Fund
Reserve Fund 25 ,000 II. Investments 2,00,000
Common Good Fund 4,000 Add : Interest Accrued 1,200 2,01 ,200
3,000 32,000 Ill. Provide nt Fund Investm ents NIL
Price Fluctuation Fund NIL
Ill. Staff Provident Fund NIL IV. Loans & Advances
NIL V. Sundry Debtors 56,000
IV. Secured Loans
V. Unsecured Loans NIL VI. Current Assets
Closing Stock 75,000
VI. Deposits
Deposits from Member s 50,000 VII. Fixed Assets
5,000 55,000 Furniture 9,000
Add : Interest Accrued
[Link] Liabilitie s & Provisio ns VIII. Misc. Expenses & Losses
(not w/o) NIL
Supplier s 11,000
Rent Payable 2,000 IX. Other Items
2,000 15,000 Advance Salary 6,000
Sales Tax Payable
Accmmti,rg a11d Stat111t>ry Req11ircme111.. <~f Co-operath,,• Sod,_,tie.\·
241
VIII. Unclalm ed Dividen d
1x. Interest due but not paid NIL X. Profit and Loaa Accoun t NIL
X. Other Llabllltl es NIL XI. Current Loaaea NIL
NIL
XI. Profit and Loss Accoun t
Opening Balance ?
Add : Current Year's
Profit .22.1 .600 2,21 ,600
4,23 ,600 4,23 ,600
Plan for Disposal of Surplus Funds [S. 79(1 A)(c) / Bye-law No. 147]
Dr. Memora ndum Appropriation Account Cr.
Particulars r Particula rs r
To Reserve Fund 55,400 By Net Profit 2 ,21 ,600
To Balance 1,66,200
2,21 ,600 2,21 ,600
Note : No actual appropr iation out of current year's profit can be made w ithout
the approva l of the
general body.
The above Memora ndum Profit and Loss (Approp riation) A/c shows
only the "propos ed"
appropr iations.
Illustration 23 :
From the following Trial Balance and addition al informat ion supplied to you , of
a co-opera tive society,
for the year ended 31 -3-2013 as follows :

Trial Balance

Debit r
.. Credit r
Investm ents in Shares 50 ,000 Share Capital 1,00,000
Printing and Statione ry 10 ,000 Bank Loan @ 10% Interest P.A. 3,50 ,000
Investm ent in Bank Shares 70 ,000 Interest on Member s Loan 3,50,000
Fixed Assets 50 ,000 Member s Deposits 5,00 ,000
Member s Loan 8,00 ,000 Sales 13,00,00 0
Purchas e 11,90,00 0 Reserve s and Other Funds 4,00 ,000
Office Rent 1,00 ,000
Salaries 1,00 ,000
Travellin g Expenses 18 ,000
Freight 12 ,000
Coolie Charges 10,000
Bank Balance 3,30 ,000
Bank Interest Paid 2,60 ,000
30 ,00,000 30 ,00,000
(i) Provide Audit Fees for < 6,000.
(ii) Provide Deprecia tion on Fixed Assets @ 5%.
(iii) Outstan ding Office Salaries < 10,000.
(iv) Closing Stock < 3,20,000 .
You are required to prepare Trading , Profit and Loss Account for the year ended
31st Ma rch , 2013
and Balance Sheet as on that date. (April 13, Oct. 05, adapted )
Solutio n:
CO-OPE RATIVE SOCIET Y LIMITED
Balance Sheet as on 31st March 2013
Liabiliti es Assets
I. Share Capital [Link] and Bank Balance s
Authoris ed Issued and At Bank (including Deposits) 3,30,000
Paid -up 1,00,000 II. Investm ents
II. Reserve Fund and Other Funds Other 1,20,000
Reserve Fund 4,00,000 Ill. Provide nt Fund Investm ents NIL

o:_
142 A,l11a11ced Fi11a11cia/ Acco,mti11g (M. Com. Part-II: SEM-1 //)
Ill .Staff Provident Fund NIL IV. Loans and Advances
[Link] Loans NIL Loans 8,00,000
V. Unsecured Loans V. Sundry Debtors NIL
From Banks 3,50,000 VI. Current Assets
VI . Deposits Closing Stock 3,20,000
Other Deposits 5,00 ,000
VII . Current Llabllltles VII. Fixed Assets
and Provisions Other/ Miscellaneous 47,500
Outstanding Expenses VIII. Misc. Expenses and
- Salari es 10,000 Losses (not w/o) NIL
- Audit Fees 6 oor 16,000 IX. Other Items NIL
VIII. Unclaimed Dividend NIL X. Profit and Loss Account NIL
IX. Interest due but not paid NIL XI. Current Losses NIL
X. Other Llabllltles NIL
XI. Profit and Loss Account
Opening Balance
Add : Current Year's
Profit 2 51 500 2,51 ,500
Total 16,17,500 Total 16,17,500

Trading Account for the Year ended 31st March 2013

Particulars ( Particulars f

To Purchases 11 ,90,000 By Sales 13,00,000

To Freight 12,000 By Closing Stock 3,20 ,000
To Coolie Charges 10,000
To Gross Profit c/d 4,08 ,000
Total 16,20,000 Total 16,20,000

Profit and Loss Account for the Year ending 31st March 2013
I

Particulars ( ( Particulars ( '(

To Interest Paid 2,60 ,000 By Gross Profit b/d 4,08 ,000

To Salaries and Allowances 1,00 ,000 By Interest Received , 3,50 ,000
Add : Outstanding 10,000 1,10,000
To Rent, Rates and Taxes 1,00 ,000
To Audit Fees 6,000
To Printing and Stationery 10,000
To Depreciation on Assets 2,500
To Other expenses and Fees
Travelling 18,000
To Net profit transferred 2,51 ,500
Total 7,58 ,000 Total 7,58 ,000
Plan for Disposal of Surplus Funds [S. 79(1A)(c) / Bye-law No. 147]
Dr. Memorandum Appropriation Account Cr.

Particulars ( Particulars (

To Reserve Fund 62 ,875 By Net Profit 2,51,500

To Balance 1,88 ,625
2,51 ,500 2,51 ,500
Note : No actual appropriation out of current year's profit can be made without the approval of the
general body.
The above Memorandum Profit and Loss (Appropriation) A/c shows only the "proposed"
appropriations .
Illustration 24 :
From the following Trial Balance of 'Akshay Co-operative Consumers Society Ltd.', Pune as on
31-3-2013, prepare Trading and Profit and Loss Account for the year ended on 31-3-2013 and
Balance Sheet as on that date after considering the adjustments given.
;tcco11nting and Statutory Req11ircmc111.. of Co-oi1ert1tii1e St1cle
th•,,·
243
Trlal Balanco
particulars
Share Capital Dobll r Crod/t r
Calls In Arrears .,, ... ......
,,, . 1,60 ,000
Reserve Fund ... .. , ., ....
"' 10 ,000 .
comm on Good s Fund ' '' ... "' ...... . 15 ,000
Opening Stock of Consu mers Good s ... ... ,,, ... ... . 5, 000
Furniture ... ... ... '' ' ,,, 1, 10 ,000 .
Education Fund ............... 48 ,000
Sundry Creditors .. ......... ...
,
- 8 ,000
Sundry Debtors ,,, ............ . 20,00 0
Commission Payable ... ... ... ... ... 30 ,000 .
Salaries ... ......... ... - 4 ,000
., .......... ...
Commission 71 ,000 -
Rent, Rate and Taxes ... ... , .. ... ... 17,40 0 .
Postage ... "' ......... 20 ,000 -
Land ... ... ....... .. 12 ,100 -
Interest on Investment ....... ...... .. 9,000 -
Equipment ....... ..... ... - 10 ,000
Purchases .. . .. ... ....... 20 ,000 -
Investment ... ., . .. . ...... 16,40 ,000 -
Sales ........ .... ... 1,00 ,000 -
Cash in Hand .. .... .. ......
,
• 20 ,60,500
Cash at Bank .. . ... ... ... ... 25 ,000 .
............ ... 1,70 ,000 -
....... .. .... .. 22 ,82 ,500 22,82 ,500
Adjustments :
(a) Outstanding rent payable on 31-03-2013 was ~
1,000 .
(b) Charge 5% depreciation on furniture .
(c) Closin g Stock of consumers' goods is valued at
cost~ 1,40,000 .
(d) Interest accrued on Investment ~ 2,000 .
(e) Outstanding salary on 31 st March , 2013 was~ 2,000
and~ 3,000 paid in advance .
(f) Authorised capital 20 ,000 shares of~ 10 each .
(Oct. 12, Mar. 06, adapted)
Solut ion:

AKSHAY CO-OPERATIVE SOCIETY LIMITED

Balance Sheet as on 31st March 2013

Liabilities (
I. Share Capital
( Assets r r
I. Cash and Bank Balances
Autho rised On hand
20 ,000 Shares oft 10 each 25 ,000
2,00,000 At Bank (including
Issued and Paid-up Depos its) 1,70,000 1,95,000
16,00Q Shares of II. Investments
~ 10 each 1,60,000 Other
Less : Calls in Arrears 1,00,000
10,000 1,50 ,000 Ill. Provident Fund Investments
II. Reserve Fund and NIL
IV. Loans and Advances
Other Funds NIL
V. Sundry Debtors
Reserve Fund 15,000 For Credit Sales
Common Good Fund 30 ,000
5,000 VI. Current Assets
Education Fund 8,000 Closing Stock
Add : Transfer 1,40,000
100 8,100 VII. Fixed Assets
[Link] Provident Fund NIL Land and Building
[Link] Loans 9,000
NIL Plant and Machinery 20 ,000
V. Unsecured Loans NIL Deadstocks (Furniture) 48,000
VI. Deposits Less : Depreciation (2,400} 45 ,600
144 Advanced Pi11a11clal Acco1111tlng (M. Com. Part-II: SEM-1/J)

VII. Current Llabllltles VIII. Misc. Expenses and

and Provisions Losses (not w/o) NIL
Sundry Liabilities 20 ,000 IX . Other Items
Advances paid 3,000
Outstand ing Expenses
Salaries 2,000 Interest Accrued but not
Rent 1,000 received 2.000
4,000 27 ,000 Other Dues 5,000
Commission
NIL X. Profit and Loss Account NIL
VIII. Unclaimed Dividend
NIL XI. Current Losses NIL
IX. Interest due but not paid
X. Other Llabllltles NIL
XI. Profit and Loss Account
Opening Balance ?
Add : Current Year's
Profit 3.39.500 3,39 ,500
5,44,600 Total 5,44 ,600
Total
Trading A/c for the year ended 31st March, 2013

Particulars
'
: r Particulars r
1,10,000 By Sales 20 ,60,500
To Opening Stock
16,40,000 By Closing Stock 1,40,000
To Purchases
To Gross Profit c/d 4,50 ,500
22 ,00,500 22 ,00,500

Profit and Loss Account for the Year ending 31st March 2013

Particulars r r Particulars r r I

71 ,000 By Gross Profit b/d 4,50 ,500

To Salaries and Allowance s
2,000 By Interest Received 10,000
Add : Outstanding
(3,000} 70 ,000 By Interest Accrued · 2,000
Less : Prepaid
To Rent, Rates and Taxes 20 ,000
Add : Outstanding 1,000 21 ,000
To Postage and Telegram 12,100
To Depreciati on on Assets
Furniture 2,400
To Other expenses and Fees
Education Fund 100
Commission 17.400 17,500
To Net profit transferred 3,39 ,500
Total 4,62 ,500 Total 4,62 ,500

Plan for Disposal of Surplus Funds [S. 79(1A)(c) / Bye-law No. 147]
Memorandum Appropriation Account Cr.
Dr.

Particulars . r Particulars r
84,875 By Net Profit 3,39,500
To ReseNe Fund
To Balance 2,54,625
3,39,500 3,39 ,500
the
Note : No actual appropriation out of current year's profit can be made without the approval of
general body,
•
The above Memoran dum Profit and Loss (Appropri ation) A/c shows only the "proposed
appropria tions .
Illustration 25 :
Stores,
The Balance Sheet and Receipt and Payments Accounts of Laxmi Consume r's Co-operat ive
Mumbai are given below :
Acco11nting and Stat11tory Req11iremer,t.'i ,~( Co-opcrati,,e Societlc.,· 245
Laxml Consumer's Co-operative Stores Ltd., Mahlm
Balance Sheet as on 31st March, 2013
Usbllltles r Assets r
Share Capital 60,000 Cash 2,500
Deposits from Membe rs 37,500 Bank 1,000
Reserve Fund 10,000 Investment (Shares of DCCB) 8,000
Interest due 200 Govern ment Securities 5,000
Creditors 3,000 Fixed Deposits 8,500
Sales Tax due 800 Interest due 300
Salaries Payable 500 Furniture 5,000
Dividend Payable 1,500 Debtors 38,500
Profit and Loss A/c 5,800 Stock 50,500
1,'19,300 1,19,30 0
Receipt and Payment Ale for the year ended 31st March, 2014

Receipts r Payments , (
To Balance b/d By Share Capital 1,000
Cash 2,500 By Deposit Repaid 24,000
Bank 1,000 By Purchases 5,55,000
To Share Capital 3,000 By Sales Returns 3,500
To Deposits from members 5,000 By Carriage Inward 10,000
To Sales 6,50 ,000 By Commission 2,500
To Purchase Returns 12 ,500 By Interest 2,150
To Sundry Income 2,000 By Sales Tax 5,500
To Sundry Debtors 6,30 ,000 By Dividend paid 3,250
To Sundry Creditors 4,70,000 By Bank charges 225
To Fixed Deposits 1,000 By Salaries 17,000
To Interest 3,000 By Contribution to PF 1,200
To Dividend 800 By Travelling expenses 5,550
By Rent 4,800
By Allowance to MD 500
By Postage & Telephones 1,490
By Printing and Stationery 4,600
By Audit Fees 750
By Sundry Expenses · 385
By Debtors 6, 15,000
By Creditors 4,60,000
By Furniture 5,000
By Fixed Deposits 32,000
By Balance c/d
Cash 4,400
Bank 21,000
17,80,800 17,80,800
Adjustments :
(a) Authorised Capital was 25,000 shares of< 10 each.
\
(b) Stock on 31st March, 2014 was< 55 ,000. \
(c) Depreciate Furniture by < 375.
(d) Provide for Doubtful Debts < 300.
(e) Appropriation out of Profits of the year 2012-13 were as follows
:
Reserve Fund < 2,000
Dividend < 600
Education Fund < 1,000
Prepare Find Accounts strictly as per Rule No. 61 of Maharashtra
Co-operative Societies Rules,
1961 .
(Oct. OB, adapted)
246 Adl1a11ce,I Fi11a11cial Accou11ti11g ([Link]. Part-II.· SEM-1/J)
Solution:
Laxml Consumer's Co-operative Society Ltd.
Dr. Trading and P/L Ale for the year anded 31st March, 2014 Cr.

Particulars ( Partlculsrs ' r l

To Opening stock 50,500 By Sales 6,50,000
To Purchases 5,55,000 Less : Return J,500 6,46,500
Less : Return 12,500 5,42 ,500 By Closing stock 55 ,000
To Carriage Inward 10,000
To Gross Profit c/d 98 ,500
7,01 ,500 7,01 ,500

To Interest 2,150 By Gross Profit b/d 98,500

Less : Interest due (Op .) 200 1,950 By Interest 3,000
To Sales tax 5,500 Less : Receivable (Op .) 300 2,700
Less : Due (Op.) 800 4,700 By Sundry income 2,0Q0
To Salaries 17,000 By Dividend 800
Less : Due (Op.) 500 16,500
To Dividend 3,250
Less : Payment 1,500 1,750
To Depreciation on Furniture 375
To R & D 300
To Commission 2,500
To Bank charges 225
To Postage 1,490
To Contribution to PF 1,200
To Travelling Expenses 5,550
To Rent 4,800
To Allowance 500
To Printing and Stationery 4,600
To Audit Fees 750
To Sundry Expenses 385
To Education Fund 1,000
To Net Profit c/d 55,425
1,04 ,000 1,04,000

Balance Sheet as on 31st March, 2014

Liabilities ~ Assets ~

I. Share Capital I. Cash and Bank Balances

Autt,orised Capital : Cash 4,400
25,000 shares of~ 10 each 2,50,000 Bank 21,000
Issued, Subscribed & II. Investment 52 ,500
Paid up Capital 62 ,000 Ill. Investment in Provident Fund NIL
II. Reserves and Other Funds IV. Loans and Advances NIL
Reserve Fund 12,000 V. Sundry· Debtors 23,200
Ill. Staff Provident Fund NIL VI. Current Assets
IV. Secured Loans NIL Stock 55 ,000
V. Unsecured Loans NIL [Link] Assets
VI. Deposits 18,500 Furniture 10,000
[Link] Liabilities & Provisions Less : Depreciation ~ 9,625
Creditors 13,000 VIII. Misc. Expenses and ·
Proposed Dividend 600 Losses (not w/o) NIL
VIII. Unpaid Dividend NIL IX. Other Items NIL
IX. Interest accrued NIL X. Profit and Loss Account NIL
X. Other Liabilities XI. Current Losses NIL
Education Fund 1,000
Accou11ti11g and Statlllory Requirement.,;; of Co-operative Societies 247

XI. Profit and Loss Account

Opening 5,800
Less : Reserve Fund (2,000)
Dividend (60.0)
3,200
Profit & Loss A/c (C.Y.) 55.425 58,625
1,65,725 1,65,725

Plan for Disposal of Surplus Funds (S. 79(1A)(c) / Bye-law No. 147)
Dr. Memorandum Appropriation Account Cr.

Particulars r Pa rticulars . r
To Reserve Fund 13,857 By Net Profit 55,425
To Balance 41 ,568
55 ,425 55,425

Note : No actual appropriation out of current year's profit can be made without the approval of the
general body.
The above Memorandum Profit and Loss (Appropriation) A/c shows only the "proposed"
appropriations.
Illustration 26 :
From the following Trial Balance of Apna Consumer's Co-operative Stores Ltd . prepare Trading and
Profit and Loss Account for the year ended 31st March, 2013 and Balance Sheet as on that date
considering the additional information .

Particulars Dr. < Cr. <

Share Capital (fully paid up) ... .. . ... .... .... - 1,50,000
Reserve Fund ... ... ... .... .... - 20,000
Stock of Goods ... ... ... .... .... 1,10,000 -
Furniture ... ... ... .. .. .... 48,000 -
Education Fund ... ... ... .... .. .. - 8,000
Creditors .. . ... ... .... .... - 20,000
Debtors ......... .... .... 30,000 -
Commission Due .. . ... ... .... .... - 4,000
Salaries ... ... ... .... .... 50,000 -
Rent, Rates and Taxes ...... ... .... .... 27,400 -
Postage and Stationery .. . ...... .... .... 22,100 -
Building ...... ... .... .... 9,000 -
Interest on Investment .. . ...... .... .... - 10;000
Equipments ...... ... .... .... 20,000 -
Purchases .. . ... ... .... .... 16,40,000 -
Investments ...... ... .... .... 1,00,000 -
Sales ...... ... .... .... - 20,60,500
Commission ... ... ... .... .... 21,000 -
Cash in Hand .. .... ... .... .... 25,000 -
Cash at Bank ......... .... .... 1,70,000 -
22 ,72,500 22,72,500
Additional Information :
(a) Godown Rent payable on 31st March, 2013 wast 4,000.
(b) Depreciate Furniture @ 5% p.a.
(c) Closing Stock of goods valued at cost t 1,40,000.
(d) Interest accrued on Investment t 2,000.
(e) Salary outstanding on 31st March, 2013 t 5,000.
(f) Authorized capital was 't 2,00,000 divided into shares oft 10 each.
(g) Transfer to Reserve Fund 25% of net profit. · .
(April 2010, adapted)
U8 1l1/1•1111c:ed 1'1111111clal A,·t·1111111/11Jl (M. Cm11. />1,rt-1/: SEM-1 //J

Solution :
Apnt1 Co-oporntlvo Con1umor1 Storoa Ltd.
Dr. Trndlng A/o for tho yenr onded 31 -03-2013 Cr.

Pdrticulars r PortloUlllrS r
Ta Oponlng Stock 1, 10,000 By Sa les 20,60,600
To Purchases 16 ,40,000 By Closing Stock 1,40 ,000
To Gross Profit c/d 4,50 ,500
22 ,00,500 22,00,500

To Salaries 50,000 By Gross Profit b/d 4, 60 ,600

Add : 0/S 5,QQO 55 ,000 By Interest on Investment 10,000
To Rent 27.400 Add : Accrued -2..QQ.Q 12,000
Add : O/S 4,000 31,400
To Postage and Stationery 22 ,100
To Depreciation 2,400
To Commission 21 ,000
To Net Profit tfd . to Balance Sheet 3,30 ,600
4,62 ,500 4 ,62,500

Balance Sheet as on 31st March 2013

Liabilities r Assets r
I. Share Capital I. Cash and Bank Balances
Authorised : Cash 25,000
20 ,000 Shares of~ 10 each 2,00 ,000 Bank 1,70 ,000

Issued, Subscribed & Paid up : II. Investments 1,00 ,000

15,000 Shares of~ 10 each 1,50 ,000 Add : Accrued Interest 20,000 1,02,000
II. Reserve Fund & Other Funds Ill. Provident Fund Investment NIL
Reserve Fund 20 ,000 IV. Loans and Advances NIL
Education Fund 8,000 V. Sundry Debtors 30,000
Depreciation Fund 2,400 VI. Current Assets
Ill. Staff Provident Fund NIL Closing Stock 1,40,000
IV. Secured Loans NIL VII. Fixed Assets
V. Unsecured Loans NIL Building 9,000
VI. Deposits NIL Furniture 48,000
[Link] Liabilities & Provisions Equipment 20,000 77,000
Sundry Creditors 20 ,000 VIII. Misc. Expenses and
Commission Due 4,000 Losses (not w/o) NIL
O/S Rent 4,000 IX. Other Items NIL
O/S Salary 5,000 33 ,000 X. Profit and Loss Account NIL
VIII. Unclaimed Dividend NIL XI. Current Losses NIL
IX. Interest due but not paid NIL
X. Other Liabilities NIL
XI. Profit and Loss Account 3,30 ,600
5,44 ,000 5,44 ,000

Plan for Disposal of Surplus Funds [S. 79(1A)(c) / Bye-law No. 147]

Dr. Memorandum Appropriation Account for the year ended 31-03-2013 Cr.

Particulars r Particulars ♦ r
To Reserve Fund (25%) 82 ,650 By Net Profit 3,30,600
To Balance c/d 2,47 ,950
3,30 ,600 3,30,600

Note : No actual appropriation out of current year's profit can be made without the approval of the
general body.
The above Memorandum Profit and Loss (Appropriation ) A/c shows only the "proposed"
appropriations.
 s,,,,,,,,,,,~
Accountirr,: arrd Statutory R<'qui"""'""~ ;~{ c,,•.,,,.,,..11/1'11 U9

ILLUSTRATIONS : CREDIT [Link]. SOCIETIES

111u1tratlon 27 :
From the following TliAI Onlnnco of Malt rl Co-oporutlvo Crodlt Socloty Ltd . ao on 31et Morch
20 13
and other inlonnotl M, proporo Protit nnd Loss Alo for tho yoor ondod 31st Morch 2013 llnd Bolonco
si,eet as on that dnto.
Trlal Balance

PRrticUlars r Par1fculars r
Ca sh in hand 700 Share Capital 7,50,000
Cash with Banks 14,000 Reserve Fund 50 ,000
Fixed Deposit with M.S. Members ' Deposits 22,47 ,750
Co-ope rative Bank 1,55 ,000 Unpaid Dividend 2,100
Office Furniture 7,000 Dividend Equalisat ion Reserve 18 ,000
Interest on Deposits 80 ,000 Staff Providen t Fund 20 ,000
Interest due on Loans 8,000 Profit & Loss Appropriation A/c
Salary and Allowanc es 30,000 Balance 31 ,000
Establishment for Executive Office r 5,000 Interest 1,78 ,000
Printing and Stationery 400 Renewal Fees 4,000
Travelling and Conveya nce 600 Sundry Income 300
Insurance Premium 1,000 Co-operative Development Fund 2,050
Contribution to Provident Fu nd 2,000 Education Fund 500
Loan due from Membe rs 30 ,00,000
33 ,03,700 33 ,03,700
Adjustments :
1. Inte rest due to members deposits < 5,000 .
2. Interest accrued due but not rece ived< 2,000.
3. Add ition to Furniture during the year < 1,000. Charge depreciation at 10% on closing
balance.
4. Salary due but not paid< 300, whereas one employee is given salary in advance
on 31-3-2013
<500 .
5. Audit fee unpaid for the year< 3,000.
6. Authorise d Capital was 1,00 ,000 shares of< 10 each .
7. Directors propose the following appropriations for the current year.
(a) Dividend to shareholders at 5%.
(b) Necessary amount to Reserve Fund.
(c) 5% of Net Profit (after contribution to Reserve Fund) to Co-operative Developm
ent Fund.
(d) Contribution to Dividend Equalisation Reserve< 2,000.
(e)Transfer to Building Fund< 10,000 . (Oct. 07, 2013, adapted)
Solution:
Maitri Co-operative Credit Society Ltd.
Dr. Profit & Loss Account For the Year Ended 31-3-2013
Cr.
Particulars t Particulars
To Interest on Deposits 80 ,000 By Interest 1,78,000
Add : Interest due 5,000 85 ,000 Add : Interest due 2,000 1,80,000
To Salary and Allowances 30 ,000 By Other Income
Add : Outstanding ~ - Renewal Fees 4,000
30,300 - Sundry Income 300
Less : Advance 4,300
____filill 29 ,800
To Printing and Stationery 400
To Contribution to Provident Fund 2,000
To Depreciation on Furniture 700
To Outstanding Audit Fee 3,000
150
,,,dwmct!tl f'l,,a,,cinl Accmmtl"ll (M.Cm11. Part-II: SEM-//J)
To Other Expenses & Foes. If nny
- Establishment for Exocutlvo
Officer 5, 000
· Travelling nnd Co,woyonco 600
• lnsumnco Premium 1,0..0..Q 6, 600
To Net Profit 56,800
1,84,300 1,84 ,300
Balance Sheet as on 31 -3-2013

Liabilities r Asset• r I
I. Share Capital I. Cash and Bank Balances
Authorised Capital Cash in Hand 700
1.00,000 Shares of~ 1O each 10,QQ,0Q0 Cash at Bank 14,000
Issued Capital II. Investments
75.000 Shares of ~ 1 o each 7,50 ,000 F.D. with M.S. Co-operative
II. Reserve Fund and Other Funds Bank 1,55,000
Reserve Fund 50 ,000 Ill. Provident Fund Investment NIL
Dividend Equalisation Reserve 18,000 IV. Loans and Advances
Co-operative Development Fund 2,050 Loan due from Members 30 ,00,000
Education Fund 500 V. Sundry Debtors NIL
Depreciation Fund 700 VI. Current Assets
Ill. Staff Provident Fund 20 ,000 Interest due on Loans 8,000
IV. Secured Loans NIL Add : Interest due 2,000 10,000
V. Unsecured Loans NIL [Link] Assets
VI. Deposits Office Furniture 6,000
Members Deposits 22,47,750 Add : Addition 1,000 7,000
[Link] Liabilities & Provisions VIII. Misc. Expenses and
Outstanding Salary 300 Losses (not w/o)
Outstanding Audit Fees 3,000 Advance Salary 500
VIII. Unpaid Dividend 2,100 IX. Other Items NIL
IX. Interest due but not paid X. Profit and Loss Account NIL
Interest due on Members' Deposits 5,000 XI. Current Losses NIL
X. Other Liabilities NIL
XI. Profit and Loss Account
Opening 31 ,000
Current Year 56.800 87,800
31 ,87,200 31,87,200

Dr. Memorandum Profit and Loss Appropriation Account Cr.

Particulars '
( Particulars
37 ,500 By Balance b/d
. (

To Dividend 31 ,000
To Reserve Fund (25%) 14,200 By Net Profit 56,800
To Co-operative Development Fund 2,130
To Dividend Equalisation Fund 2,000
To Building Fund 10,000
To Balance c/d 21 ,970
87 ,800 87,800

Note: No appropriation out of current year's profit can be made without the·approval of the general
body.
Illustration 28 : (Trading + Loan Society)
Union Co-operative Society Ltd . is rendering Loan~ and Rationing facilities to its members. The
Trial Balance of the society as on 31st March, 2013 rs as follows .
Trial Balance

Particulars Dr.. ( Cr. f Particulars Dr. t Cr. f

10,000 Sale of Rationing Grains 1,30,000
Share Capital
35 ,100 Office Rent 10,000
Bank Loan (Simple)
/4ccou11ti11g and Statutory Rcq11/rcn1em.-. ,~f Co-,,,,em tfr,, Soc/ctl,•s 25 I
sahakari Sangh Share Sn lorto s 10 ,000
purch ased 5,000 Trnvolllng E )(pon so a 1,800
stationery a nd Printing 1,000 F rolght 1,200
eank Share Purchoso d 7, 000 Coollo Choroo s 1,000
oead Stock 5,000 Bo nk C urra nt Ale 33,000
interest on Mombers ' Loons 35,000 Bo nk lntorost 26,000
Members ' Lo an 80.000 Roserv o and Oth er Funds 40 ,000
Members ' Deposit 50,000 Cash Ba lance 100
purchase of Rationing Groi ns 1,19 ,000 3,00 ,100 3,00 , 100
Adjustme nts :
1. Provide for Audit Fees due , 600 .
2. Provide d epreci ation on Deadstoc k at 5%.
3. Outstand ing Office Salaries is~ 1,000 .
4. Provide B ad Debts Reserve~ 1 ,500 .
s. Closing Stock of Rationing Grains on 31 -3-2 013 was ~ 35 ,000 .
You are required to prepare Trading , Profit & Loss Account for the year ending on 31
-3 -2013 and
Balance Sheet as on that date .
Solution :
Union Co-opera tive Society Ltd.
Dr. Trading & Profit & Loss Account For the Year Ended 31-3-201 3 Cr.

Particulars ~ Particular s ~
To Purchase of Rationing Grains 1,19 ,000 By Sales of Rationing Grains 1,30 ,000
To Freight 1,200 By Closing Stock 35,000
To Coolie Charges 1,000
To Gross Profit 43 ,800
1,65 ,000 1,65 ,000
To Printing and Stationery 1,000 By Gross Profit 43 ,800
To Rent, Rates and Taxes 10,000 By Interest on Member's Loan 35 ,000
To Salaries and Allowance s 10 ,000
Add : Outstanding Salaries 1,000 11 ,000
To Bank Interest 26 ,000
To Outstand ing Audit Fees 600
To Depreciat ion on Dead Stock 250
To Reserve for Doubtful Debts 1,500
To Other Expenses & Fees , if any
- Travelling Expenses 1,800
To Net Profit 26 ,650
78,800 78,800
Balance Sheet as on 31-3-2013

Llablllties
I. Share Capital
~ Assets ~ .
10 ,000 I. Cash and Bank Balances
Issued & Paid-up Cash Balance
II. Reserve Fund and Other Funds 100
Bank Current Ale 33 ,000
Depreciation Fund 250 II. Investme nts
Reserve for Doubtful Debts 1,500 Sahakari Sangh Share Purchased 5 ,000
Other 40,000 Bank Share Purchase d
111. Staff Providen t Fund .7,000
NIL Ill. Providen t Fund Investme nt NIL
IV. Secured Loans NIL IV. Loans and Advance s
V. Unsecure d Loans Member's Loan
Bank Loan 80 ,000
35,100 V. Sundry Debtors NIL
VI. Deposits VI. Current Assets
Member's Deposit 50 ,000 . Stock 35 ,000
252 Ad"'mce,J Flmmclal Acc:,m11tl118 ([Link],m. Part-II: SEM-11/)

[Link] Liabilities & Provisions [Link] AHeta

Dead Stock 5,000
Outstanding Audit Faes 600
Outstanding Off Ice SAiaries 1,000 VIII. Misc. Expenses and
NIL LoHea (not w/o) NIL
VIII. Unclaimed Dividend NIL
IX . Interest due but not paid NIL IX . Other Items
NI L X. Profit and LoH Account NIL
X. Other Llabllltles NIL
XI. Profit and Loss Account 26,650 XI. Current LoHes
1,65 , 100
1,65 ,100

Memorandum Profit and Loss Appropriation Account

r Particulars
r
Particulars
By Net Profit 26,650
To Reserv e Fund 6,663
To Balance 19,987
26 ,650
26 ,650
without the approval of the
Note : No actual appropriation out of current year's profit can be made
general body.
only the "propos ed"
The above Memor andum Profit and Loss (Approp riation) Ale shows
appropriations .
Illustration 29 : (Employees Credit Society - Compre hensive )
Society as at 31-3-2013
From the following Trial Balance of X Ltd . Employee's Co-operative Credit
Sheet, Profit & Loss Account
and other information prepare the Receipt & Payment Account, Balance
Accoun t (both actual appropr iations of last year and proposed
and Profit & Loss Appropriation
appropriations of current year's profit.) .
Trial Balance

Particulars Dr. f · Particulars Cr. r

Cash in hand 700 Share Capital (~10)
Cash with Mumbai Distr. (Authorised : 1,00,000 such shares) 7,50 ,000
10,000 Reserve Fund 35 ,000
Co-operative Bank Ltd .
4,000 Member s' Deposits 22,47,75 0
Cash with United Bank
30 ,00,000 Interest due on Membe rs' Deposit s 5,000
Loan due from Members
Unpaid Dividend 2,100
Investment in 5 yr. Fixed Deposits
ative Bank Ltd .) 1,55,000 Unpaid Audit Fee (2012-2 013) 3,000
(Mumbai Distr. Co-oper
7,000 Dividend Equalisation Reserve 18,000
Office Furniture
2,000 Staff Provide nt Fund 20,000
Interest due on Investments
Interest on Deposits 85 ,000 Undistributed Profit upto 31-3-2011 23,250
8,000 Profit for (2011-2 012) 60 ,000
Interest due on Loans
30,000 Salaries Due 300
Salary & Allowances
3,000 Interest 1,80 ,000
Audit Fee (2012-2013)
Establishment for Executive Officer 5,000 Renewal Fees 4,000
ry 400 Sundry Incomes 300
Printing & Statione
Travelling & Conveyance 600
Insurance Premium 1,000
Contribution to Provident Fund 2,000
Dividend Paid (2011-2012) 35,000
33 ,48,700 33,48,700

Other Information :
(1) Share Capital at the beginning of the year was~ 7,00,000.
was withdrawn during the
(2) Deposits as per last Balance Sheet were ~ 30,47,750. No deposit
year.
ively as on 31-3-2012.
(3) Interest payable and Dividend payable were ~ 2,0,00 and ~ 4,100 respect
g of the year of~ 2,000 was paid off
(4) Co-operative development Fund balance at the beginnin
during the year.
(5) Office furniture stood at~ 6,000 in the last Balance Sheet.
given during the year.
(6) Opening Balance of Loan was ~ 27,33 ,000 and~ 20,00,000 loan was
Accounting and Stat11tory Req11ircn1C11ts of Co-<J/lr.r11tfrc ,\'odl't/,,,.. 153
(7) t 50.000 lntorost (Fixod Doposlt) rnoturod In thO your ond oponlng bolonco of Flxod Ooposlt was
t 1,56.000.
(8) Interest Recolvnblo and Sn lnry Advonco nmountod to t 6,000 ond ~ 500 ro spoctlve ly at
commoncomont of tho yoor.
(9) Audit Foo tor 20 11 -2012 of~ 2,500 wos pold In tho yoor.
(1O) Opening Cosl1 Balances Wore :
r
Cash in hand 400
Cash with Mumbai Distr. Co-op. Bonk ltd. 8,000
Cash with United Bank 6,000
(11 } Provide 10% depreciation on closing balance of Office Furniture.
(12) Appropriations were as under.
Previous Year Current Year
Reserve Fund 15,000 14,150
Co-Op. Development Fund 2,250 2,123
Dividend @5% @5%
Solution:
X Ltd. Employees' Co-operative Credit Society Ltd.
Balance Sheet as at 31 -3-2013

Liabllltles ( Assets (

I. Share Capital I. Cash and Bank Balances

Authorised : Cash in Hand 700
1,00,000 Shares of t 10 10,00,000 Cash with Mumbai Dist.
Subscribed and Paid-up : Co-operative Bank Ltd. 10,000
7,500 Shares of t 1O Cash with United Bank 4,000 14,700
fully called up 7,50 ,000 II. Investments
II. Reserve Fund and Five Year Fixed Deposits with
Other Funds Mumbai Dist. Co-ope rative
Reserve Fund 50,000 Bank Ltd. 1,55,000
Dividend Equalisation Ill. Provident Fund Investment NIL
Reserve 18,000 IV. loans and Advances
Co-operative Due from Members 30,00,000
Development Fund 2,250 70,250 V. Sundry Debtors NIL
Ill. Staff Provident Fund NIL VI. Current Assets NIL
IV. Secured loans NIL VII. Fixed Assets NIL
V. Unsecured loans NIL Office Furnitu re
VI. Deposits As per Last Ale 6,000
Members' Deposits 22,47,750 Added during the Year 1,000
Staff Provident Fund 20,000 22,67,750 7,000
[Link] liabilities & Less : Depreciation ___lQQ 6,300
Provisions NIL VIII. Misc. Expenses and
VIII. Unclaimed Dividend NIL losses (not w/o) NIL
IX. Interest due but not paid IX. Other Items
Interest on Members' Deposits 5, 000 Interest Receivable
X. Other liabilities - On Investments 2,000
Unpaid Dividend 2,100 - On Loans 8,000 10,000
Audit Fee 3,000 X. Profit and loss Account NIL
Salaries 300 5,400 XI. Current losses NIL
XI. Profit and loss Account
Undistributed Profit
upto 31 -3-2012 31,000
Net Profit for the year
ended 31-3-201 3 56,600 87,600
31,86,000 31,86,000
154 ,·fd, 1n11cctl Pl11a11clal Accmmtl11g (M. Com. Part-II: SEM-1//)
013
Profit and Lo11 Accou nt For the YHr Ended 31-3-2

Pnt1/culnrs r
Particulars
To
To
Interes t on Members' Dopos lls
SalAry and Allowa nce
'
85 ,000
30,000
By Interes t
By Renew al Fees
1,80 ,000
4,000
2,000 By Sundries 300
To Contribution to Providen t Fund
To Estab lishment for
Execu tive Officer 5,000
To Audit Fee 3,000
To Printing and Statio nery 400
To Depreciation :
Office Furni tu re & Fittings 700
To Trave lling & Conveyance 600
To Insurance Pre mium 1,000
To Net Profit Carried to
Balance Sheet 56 ,600
1,84 ,300
1,84 ,300
Ended 31-3-2 012
Statem ent of Actual Distribution of Profit For the Year
(Passed In A.G.M . dated .... .)

Particulars
r
23 ,250
Balance of undistributed Profit upto 31-3-2012 60,000
Profit for the year ended 31 -3-2012 83 ,250

Appropriations :
15,000
Reserve Fund
35 ,000
Dividend @ 5% on 7,00,000 52,250
2,250
Contribution to Co-operative Development Fund 31 ,000
Undistributed Profit upto 31 -3-2012
Receipts & Payment Account For 2012-2013
.. r Payments r I

Receipts
50 ,000 By Loan Given 20 ,00,000
To Share Capital 82 ,000
To Members Deposits 2,00 ,000 By Interest (WN 3)
To Loan Recovered (WN 1) 17,33,000 By Expenses :
1,75 ,000 Salary and Allowance 29 ,700
To Interest (WN 2) 2,500
Audit Fee (2011- 12)
To Other Incomes :
4,000 Establishment For Executi ve Officer 5,000
Renewal Fees 400
Printing and Stationery
To Other Items : 600
500 · Travel ling and Conve yance
Salary Advance 1,000
Fixed Deposits 50 000 Insurance Premium
22 ,12,500 Contribution to Provident Fund 2,000
By Other Items :
To Opening Balances : 2,000
Cash in hand 400 Co-operative Development Fund
Furnitu re 1,000
Cash with Mumbai Dist. . 49 ,000
8,000 Fixed Depos its (WN 4)
Co -operative Bank Ltd. 37,000
6,000 Dividend Paid (WN 5)
Cash with United Bank 22 ,12,200
By Closing Balances :
Cash in hand 700
Cash with Mumb ai Dist.
Co -operative Bank Ltd. 10,000
Cash with United Bank 4,000

22 ,26,900 22 ,26,900

Working Notes :
(1) 27,33,000 + 20,00,000 - 30,00,000 = t 17,33,000
(2) 1°,ao,ooo + s,ooo - 10,000 = 1,1s,ooo
(3) 2,000 + 85,000 - 5,000 = t 82 ,000
Jccou 11ting and Stat11t<Jry Rcq11irements ,~f Co-operatil'c Societies 255
4) 1,55,000 - (1 ,56,000 - 50,000) C 49,000
5) 35,000 + 4,100 - 2,100 C ~ 37,000
Memorandum Profit & Loss Appropriatio n Account For the Year Ended 31-3-2013
(Showing Proposed Appropriations)

particulars r Particulars r
M8S81V8 Fund 14 ,150 Balance of undlstribution Profit
Dividend at 5% on 7 ,50,000 37,500 upto 31-3-2012 31,000
c o-operative Development Fund 2,123 Net Profit For the Year Ending 56,600
Balance of undistributed Profit 33,827 31-3-2013
87,600 87,600
lllustratlon 30 :
From the following Trial Balance of Suyog Credit Co-operative Society, Borwad, prepare Final
Accounts for the year ended 31-3-2013.
Trial Balance
I
Debit ~ Credit ~
Loans to Members 7 ,00 ,000 Share Capital 2,00 ,000
Contribution to Provident Fund 480 Reserve Fund 18,000
Insurance 1,040 Member's Deposits 5,40,000
Conveyance 3,420 Unpaid Dividend 400
Printing and Stationery 960 Staff Provident Fund 4,800
Salary of M.D . 12 ,000 Profit and Loss 2011-.1 2 7,000
Staff Salary 27 ,200 Interest 86 ,000
'
Interest on Loans 1,920 Renewal Fees 1
800
Interest on Deposits 19,200 Sundry Income 640
Furniture 1,680 Development Fund 4,000
Fixed Deposits with Other Banks 60,000 Education Fund 1,200
Cash 4,360
Bank 30,580
8,62,840 8,62,840
Adjustments :
(1) Interest due on members deposits< 2 ,000.
(2) Interest due but not received < 4,800.
(3) Salary due ~ 1 ,200.
(4) Audit Fees Due< 800.
(5) Depreciate Furniture by 5%.
(6) Directors propose to pay dividend of 5%.
(7) Transfer< 100 to Education Fund and < 2,000 to Dividend Equalisation Fund .
(8) Appropriations out of profits of the year 2011-12 were approved as follows :
f
Reserve Fund 2,000
Dividend 2,000 (Oct. 06, 14, adapted)
Solution:
\
SUYOG CO-OPERATI VE SOCIETY LIMITED
Balance Sheet as on 31st March 2013

Liabilities ~ ~ Assets ~ '

~
I. Share Capital I. Cash and Bank Balances
Authorised : On hand 4,360
? Shares of < ? each ? At Bank (including Deposits) 30,580 34,940
Issued and Paid-up : II. Investments
? Shares of < ? each 2,00,000 Fixed Deposits with Banks 60,000
256 Adwmced Fi11a11cial Accmmti11g ([Link]. Part-II: SEM-1//)

II. Reserve Fund and Other Funds Ill. Provident Fund Investments NIL
Reserve Fund 18,000 IV. Loans and Advances
2,QQQ 20,000 Loans to members 7,00,00Q
Add : Transfer
Developmen t Fund 4,000 V. Sundry Debtors NIL
Dividend Equalisation Fu nd 2,000 VI. Current Assets NIL
Education Fund 1,200 VII. Fixed Assets
lQQ 1,300 Deadstocks (Furniture) 1,680
Add : Transfer
4,800 Less : Depreciation (84} 1,596
[Link] Provident Fund
[Link] Loans NIL VIII. Misc. Expenses and
V. Unsecured Loans NIL Losses (not w/o) NIL
VI. Deposits IX. Other Items
Members Deposits 5,40 ,000 Interest Accrued but not
VII. Current Llabllltles received 4,800
and Provisions X. Profit and Loss Account NIL
Outstanding Expenses XI. Current Losses NIL
- Salaries 1,200
- Audit Fees 800 2,000
VIII. Unclaimed Dividend 400
IX. Interest due but not paid NIL
X. Other Liabilities
Proposed Dividend 2,000
XI. Profit and Loss Account
Open ing Balance 7,000
Less : Reserve Fund (2 ,000)
Less : Proposed Dividend (2,000}
3,000
Add: Current Year's Profit 21,836 24,836
Total 8,01 ,336 Total 8,01 ,336

Profit and Loss Account for the Year ending 31st March 2013

Particulars ( ( Particulars t (

To Interest Paid - Loan 1,920 By Interest Received 86,000

Interest Paid - Deposit 19,200 Interest Accrued 4,800 90 ,800
Add : Outstanding 2,000 23 ,120 By Other Incomes
To Salaries and Allowances 28,400 - Renewal Fee 800
To Provident Fund 480 - Other 640
To Managing Directors'
Allowances and Salary 12,000
To Audit Fees 800
To Printing and Stationery 960
To Depreciation on Assets
Furniture 84
To Other expenses and Fees
- Conveyance 3,420
- Insurance 1,040
- Education Fund 100 4,560
To Net profit transferred 21,836
Total 92,240 Total 92,240

Memorandum Profit and Loss Appropriation Account for the Year ending 31st March 2013

Particulars
• t.-, t· Particulars · t
To Reserve Fund (25% x 21,836) 5,459 By Balance b/d 3,000
To Dividend Equalisation Fund 2,000 By Net Profit b/d 21,836
To Dividend (2,00,000 x 5%) 10,000
To Balance c/d 7,377
24,836 Total 24,836
Total
►

,4ccmmti11g ar,d Stat11tory Req11iremc111.-. ,~f Co-01u•r11ti,•e Socil'II,•.-. 157

Notes:
(I) The above appropriations wlll bo rocordod In the next year' s occounts, oltor th ey cuo approvod
by the members. \
(Ii) Appropriations out of opening balance of Profit and Loss N e, as approved by tho members aro
shown In the curren t year's Balance Sheet / Profit and Loss Appropriation A/c . Proposed
appropriations from curren t year's profits are shown In th e Memora ndum Profit and Loss
\
Appropriation Ne.
Illustration 31 :
Following Is the Trial Balance of Aamchi Patpedhl Co-operative Credit Society Limited as on 31st
March, 2010 :

Particulars Dr. r Pa rticulars Cr. (

Telephone Expenses 4 ,000 Interest on Bank Deposits 15,000
Postage Expenses 1,000 Share Capital 15 ,00 ,000
Legal Fees 5,000 Reserve Fund 1,00 ,000
Cash on Hand 1,400 Members Deposits 44 ,95,500
Bank Balance 38 ,000 Unpaid Dividend 4,200
Fixed Deposits with Dombivli Nagari Dividend Equalisation Reserve 36 ,000
Sahakari Bank Ltd . 3,00 ,000 Profit and Loss Appropriation A/c 62 ,000
Staff Provident Fund 40 ,000 Interest on Loans received 3 ,56,000
Office Furniture 19 ,000 Renewal Fees 8 ,000
Interest on Deposits 1,60 ,000 Sundry Income 600
Interest due on Loans given 16,000 Co-operative Development Fund 4 ,100
Salary and Allowances 60 ,000 Education Fund 1,000
Establishment Expenses 10,000
Printing and Stationery 800
Conveyance and Travelling 1,200
Insurance Premium 2,000
Contribution to Provident Fund 4,000
Loans due from Members 60 ,00 ,000
66 ,22,400 66,22 ,400
Additional Information is as below :
(a) Interest due to members on deposits is < 10,000 .
(b) Interest due on members loans is< 4 ,000.
(c) Addition to furniture made during the year is < 2 ,000. Provide depreciation @ 10% on closing
balance of furniture.
(d) Salary outstanding is< 600 and paid in advance is< 1,000.
(e) Audit Fees payable for the year is< 6,000.
(f) Authorised share capital is 2 lakh shares of < 10 each.
(g) The following appropriations are made out of the profits :
(i) Proposed Dividend @ 5%
(ii) Contribution to Dividend Equalisation Reserve is< 4,000.
(iii) Transfer to Building Fund < 20 ,000.
(iv) Transfer to Co-operative development fund 5% of current year's net profit.
(v) Transfer to Reserve Fund 25% of current year's net profit.
You are required to prepare Profit and Loss Account for the year ending 31st March, 201 o and
Balance Sheet as on that date in the form 'N'. (April 2011, adapted)
Solution :
In the Books of Aamchi Patpedhi Co-operative Credit Society Ltd.
Dr. Profit and Loss Account for the year ended 31-3-201 o Cr.

Particulars ( Particulars r
To Interest on Deposits 1,60,000 By Interest on Loan 3,56,000
Add : Interest Due 10,000 1,70,000 Add: Due 4,000 3,60,000
To Salary and Allowance 60,000 By Bank Interest 15,000
Add : Outstanding 600 By Renewal Fees 8,000
Less : Advance 1,000 59 ,600 By Sundry Income 600
258 Adi1a11cc,I Fi11a11clal Accmmti,ig ([Link]. Part-II: SEM-IJ/J

To Contribution to PF 4,000
To Postage 1,000
To Aud it Fee (Outstanding ) 6, 000
To Printing and Stationery 800
To Depreciation (Furniture) 1,900
To Other Expe nses :
- Establishment Expenses 10,000
- Conveyance and Travelling 1,200
- Insurance 2, 000
Telephone 4,000
- Legal Fees 5,000
To Net Profit c/d 1, 18,100
3,83 ,600 3,83,600

Balance Sheet as on 31-3-201 O

Llsbllltles r Assets r --
I. Share Capital I. Cash and Bank Balances
Authorised Share Capital : Cash on Hand 1,400
2 lakh Shares of ~ 1o each 20 ,00,000 Bank Balance 38,000
Issued & Subscribed Capital : II. Investments
1,50 ,000 Shares of~ 10 each 15,00,000 Fixed Deposit with Bank 3,00 ,000
II. Reserve Fund and Other Fund Ill. Provident Fund Investments NIL
Reserve Fund 1,00 ,000 IV. Loans and Advances
Dividend Equalisation Reserve 36 ,000 Loans 60 ,00,000
Co-operative Development Fund 4,100 V. Sundry Debtors NIL
Education Fund 1,000 VI. Current Assets
Building Funds Deposits 44 ,95 ,500 Interest due on Loan 16,000
Ill. Staff Provident Fund 40 ,000 Add: Due 4,000 20,000
IV. Secured Loans NIL [Link] Assets
V. Unsecured Loans NIL Furniture 17,000
VI. Deposits NIL Add : Purchase 2,000
[Link] Liabilities & Provisions 19,000
Outstanding Expenses : Less : Depreciation 1,900 17,100
Salary 600 VIII. Misc. Expenses and
Audit Fees 6,000 6,600 and Losses (not w/o) NIL
VIII. Unpaid Dividend 4,200 IX. Other Items
IX. Interest due but not paid Salary Advance 1,000
10,000 X. Profit and Loss Account NIL .
Interest on Deposits
X. Other Liabilities NIL XI. Current Losses NIL
XI. Profit and Loss Account
Balance b/f 62 ,000
Net Profit 1, 18,100 1,80 ,100
63 ,77,500 63 ,77,500

Memorandum Profit and Loss Appropriation Account

Particulars r Particulars ,._ ·1

'
J
r
To Proposed Dividend 75 ,000 By Balance b/d 62,000
To Dividend Equalisation R,eserve 4,000 By Net Profit 1, 18,100
To Building Fund 20 ,000
To Co-operative Development Fund 5,905
To Reserve Fund 29 ,525
1,80 ,100 1,80,100

Note : No actual appropriation out of current year's profit can be made without the approval of the
general body.
The above Memorandum Profit and Loss (Appropriation )_A/c shows only the "proposed"
appropriations .
AccountitrR and Slat11tory Rc1q11ir,•n wm.,· of Ct1-0/Jt•rat/1 Soci,•th•.'1/
1, ,

259
mustratlon 32 :
From the following Trial Bolanco of Jyoll Crodlt Co-oporo tlv o Socloty, Thone preporo
for th e year onded 31--3 ·2013. Final accounts

Particulars r Pnrtloulars
Loans to Members · r
14 ,00,000 Share Ca pital
Contribu tion to Providen t Fund 4,00 ,000
960 Reserv e Fu nd
Insurance 36,000
2,080 Members' Deposits
Conveyance 10,80 ,000
6,840 Unpaid Dividend
Printing and Stationery 800
1,920 Staff Provident Fund
Salary to M.D. 9,600
24,000 Profit and Loss Ale 2011 -12
Staff Salary 14,000
54,400 Interest
Interest on Loans 1,72 ,000
3,840 Renewal Fees
Interest on Deposits 1,600
38,400 Sundry Income
Furniture 1,280
3,360 Development Fund
Fixed Deposits with Bank 8,000
1,20 ,000 Education Fund 2,400
Ca sh 8,720
Bank 61 ,160
17,25 ,680 17,25 ,680
Adjustm ents :
1. Interest due on members ' deposits < 4,000.
2. Interest due but not received < 9,600 .
3. Salary due< 2,400.
4. Audit Fees due < 1,600 .
5. Depreciate Fu rn iture by 5%.
6. Directors ' propose to pay dividend of 5%.
7. Transfer < 200 to education fund < 4,000 to dividend equalisation fund .
8. Appropri ation out of profits of the year 2011 -12 were approved as follows :
Reserve Fund < 4,000
Dividend < 4,000 (April 2014, Oct. 2010, adapted)
Solution :
In the Books of Jyoti Co-Operative Credit Society
Dr. Profit and Loss Account for the year ended 31-3-2013
Cr.
Particulars f Particulars f
To Interest : By Interest 1,72 ,000
Paid 42 ,240 Add : Due 9,600 1,81 ,600
Payable 4,000 By Miscellaneous Income :
To Salaries and Allowances Staff 56 ,800 - Renewal Fees 1,600
To Contribution to Provident Fund 960 - Sundry Income 1,280
To Salaries and Allowances to M.D. 24 ,000
To Conveyance 6,840
To Printing and Stationary 1,920
To Audit Fees 1,600
To Depreciation of Furniture 168
To Other Items - Insurance 2,080
To Education Fund 200
To Net Profit 43 ,672
1,84,480 1,84 ,480
Dr. Profit and Loss Appropriation Account for the year ended 31-3-2012
Cr.

Particulars f Particula rs .,
To Reserve Fund 4,000 By Net Profit 14,000
To Dividend Proposed 4,000 I

To Balance carried to Balance Sheet 6,000

14,000 14,000
160 Ad"'mc,•1/ 1'Y1umdal AccmmtinR (M.Cm11. Part-I/: SEM-I//J
Balance Sheet aeon 31-3-2013

Llsbllltles r Assets r -
Cash and Bank Balances
-
I. Share Capita! I.
Authorised : Cash on Hand 8,720
... Shares of ~ ... each ? Bank 61 ,160
Subscribed : II. Investments
... Shares of ~ ... each 4,00,000 Fixed Deposits with Banks 1,20,000
II. Reserve Funds and Ill. Provident Fund Investments NIL
Other Funds IV. Loans and Advances
Reserve Funds : Loans to Members 14,00,000
Opening Balance 36,000 V. Sundry Debtors NIL
Add : Transfer 4,000 40 ,000 VI. Current Assets NIL
Development Fund 8,000 [Link] Assets
Education Fund : Furniture :
Opening Balance 2,400 Opening Balance 3,360
Add : Transfer 200 2,600 Less : Depreciation 168 3,192
Ill. Staff Provident Fund 9,600 VIII. Misc. Expenses and
IV. Secured Loans NIL Losses (not w/o) NIL
V. Unsecured Loans NIL IX. Other Items
VI. Deposits Interest due but not received 9,600
Member Deposits 10,80,000 X. Profit and Loss Account NIL
[Link] Liabilities & Provisions XI. Current Losses NIL
Outstanding Expenses :
Salaries 2,400
Audit Fees 1,600
Proposed Dividend :
Last Year 4,000
VIII. Unpaid Dividends 800
IX. Interest Accrued due
but not paid 4,000
X. Other Liabilties NIL
XI. Profit and Loss Account
Brought forward 6,000
Current Year 43,672 49,672
~6.02 ,672 16,02,672

Dr. Memorandum Profit and Loss Appropriation Account for the year ended 31-3-2013 Cr.

( Particulars ' (
Particulars
To Dividend Equalisation Fund 4,000 By Balance b/d 6,000
To Reserve Fund (25% of NP) 10,918 By Net Profit 43,672
To Proposed Dividend 20,000
To Balance carried to Balance Sheet 14,754
49,672 49,672

Notes:
(i) The above appropriations will be recorded in the next year's accounts, after they are approved
by the members.
(ii) Appropriations out of opening balance of Profit and Loss Ale, as approved by the members are
shown in the current year's Balance Sheet I Profit and Loss Appropriation Ale. Proposed
appropriations from current year's profits are shown in the Memorandum Profit and Loss
Appropriation Ale.
161 Ad,,011,·t!d 1-Y11a11dal Ac.·co1111tl11,.: (M. Ct,111. Part-II: SEM-1//J

• Sink ing Fund.

[Ans.: Para 2.7-(3))
27 . Write a short note on
• Ropolrs Fund.
[Ans.: Para 2.7-(4))
28. Write a short note on
• Socur od Loons of o Co•oporotlvo Housi ng Socle ty.[An s.: P11r11 2.7-(S)J
29 . Write a short note on
ce Society.
30. Write a short noto on • Lonn from Mohnrosht ro Co -oporo llvo Housing Finan
[Ans.: P11r11 2.7-(5))
[Ans.: P11r11 2.7-(6)(s)J
3 1. Write A shor t M IO on • Lonn Stock Bonds .
the Balance Sheet of a Co-opera tive Housing
32 . Explain In brief, th o Items on th e Assets side of [Ans.: P11r11 [Link]
Socie ty.
[Ans.: Pars 2.9)
33 . Write a short note on - Mode l Bye-Laws.
re garding charg es to be recovered by a Co-
34 . Explain the Provisions of the Mode l Bye-La ws [Ans.: P11r11 2.9.1)
operative Housing Socie ty from the me mbers .
by a Co-op erative Housi ng Society from Its
35. Enum erate the Items wh ich may be recovered [Ans. : Para 2.9.1 · (1))
memb ers.
red by a Co-operative Housing Society from
36. Write a short note on - Se rv ice charges recove [Ans. : Pars 2.9.1 - (2))
members.
es by the members.[Ans. : Pars 2.9.1 · (3))
37 . Write a short note on - Sharing of the society charg
g to Payment of Society Charges.
38. Explain the provisions of the Model Bye-Laws relatin
[Ans.: Pars 2.9.1 - (4))
g to Accounting Procedures.
39 . Expla in the provisions of Model Bye-Laws relatin [Ans.: Pars 2.9.2)
to be kept by the Co-operative Housing
40 . List out the books of account, records and reg isters [Ans.: Para 2.9.2 - (1))
Society.
ing Maximum Cash Balances.
41. Explain the provisions of the Model Bye-Laws regard
[Ans.: Para 2.9.2 - (2)]
ing Final Accounts. [Ans. : Para 2.9.2 - (4)]
42 . Expla in the provisions of Model Bye-Laws regard
a Co-operative Housing Society.
43 . Write a short note on - P & L Appropriation Ale of [Ans.: Para 3}

9. OBJECTIVE QUESTIONS 1

-9.1 MULTIPLE CHOICE QUESTIONS

fund will be credited to
1. Any income arising from investment of an ear-marked
(b) Corpu s Fund in the balance sheet
(a) Ear-marked Fund in the balance sheet
(d) Recei pts and Payments Account
(c) Income and Expenditure Account
2. Capital of a co-operative society is in the form of
(a) share capital (b) ear-marked fund
(c) corpus fund (d) none of the above
Maharashtra Co-op . Societies Act includes
3. Working capital of a society as defined under the
(a) paid-up share capital (b) funds built up out of profits
(c) money raised by borrowing (d) all of the above (a), (b) , and (c)
(e) none of the above (a), (b) , and (c)
of a co-op . society can be conducted by
4. Under the Maharashtra Co-op . Societies Act, audit
(a) a chartered accountant
. accounts and audit
(b) a person who holds a Government diploma in Co-op
Co-operative department of the State
(c) a person who has served as an auditor in the
Government
(d) any of the above
'member' includes, in addition to a person
5. Under the Maharashtra Co-op . Societies Act, the term
duly admitted as a member
(a) only an active member (b) only an associate member
(c) only a nominal member (d) all of above
erative Society vests in
6. · The whole of the day-to -day management of a Co-op
(a) the General Body . (b) the Managing Comm ittee
(c) the Secretary (d) The Chairman
F t1nlit1g a11d Stat11tory Req11irenrerrt~· of Co-oJ'erat/,,c Soclct/e,1;
ACCO • 263
Under the Maharashtra Co-op . Societies Act, a socloty must prepare the following financial
7· statements for an accounting year
·
(a) The Profit & Loss A/c : and the Balance Sheet
(b) Receipts and Payments accounts ; the Income and Expenditure A/c: and the Balance Sheet
(c) The Income and Expenditure Ale : the Balance Sheet; and the Cash Flow Statement vlde
AS 3
(d) None of the above
s. Under the Maharashtra Co-op. Societies Act, a society must prepare the the Profit & Loss A/c
and the Balance Sheet for an accounting year
(a) as per Schedule VI (b) In Form M
(c) in Form N (d) None of the above
9 . In this case the members are the owners of the property
(a) Tenant Co-partnershi p Societies (b) House Mortgage Societies
(c) Tenant Ownership Societies (d) House Construction Societies
10. In the case of such societies, the Land and Building do not appear in the Balance Sheet
(a) Tenant Co-partnershi p Societies (b) House Mortgage Societies
(c) Tenant Ownership Societies (d) House Construction Societies
11 . Contribution towards the sinking fund
(a) 25 % of the net profits each year
(b) < 36 per member per year
(c) ¼% of the cost of the flat per annum from each member
(d) < 1/-per member
12. Value of Share of each member in capital of the society
· (a)< 250 (b) < 300
(c) < 1,500 (d) < 3,000
13. Non-occupanc y Charges
(a) < 1/-per member (b) at 10% of service charges
(c) < 250 (d) < 36 per member per year
14.<250
(a) Maximum amount of cash balance
(b) Audit charges per member .
(c) Share of each member in capital of the society
(d) Maximum Non-occupanc y Charges
15. Bye Law No. 67
(a) Composition of the Charges of the Society
(b) Break-up of Service Charges of the Society
(c) Sharing of the Society Charges by the Members
(d) Parking Charges
[Link] Law No. 68
(a) Composition of the Charges of the Society
(b) Break-up of Service Charges of the Society
(c) Sharing of the Society Charges by the Members
(d) Parking Charges
17. Bye Law No. 69
(a) Sharing of the Society Charges by the Members
(b) Parking Charges
(c) Interest on Delayed Payment of Charges
(d) Non-occupanc y Charges
18. Bye-Law No. 84
(a) Break-up of Service Charges of the Society
(b) Sharing of the Society Charges by the Members
(c) Parking Charges
(d) Interest on Delayed Payment of Charges
~ IIY
Advanced Financial Accounting (M. Com. Part-II: SEM-//J)
19. Bye-Law No. 72
(a) Interest on Delayed Payment of Charges (b) Non-occupancy Charges
(c) P_ayment of Society Charges (d) Review of case In default of payment
20. Interest on the defaulted charges
(a) Bye Law No. 70 (b) By Law No. 71
(c) Bye Law No. 72 (d) Bye Law No. 142
21. Books, Records & Registers
(a) Bye Law No. 142 (b) Bye Law No.145
(c) Bye Law No. 146 (d) Bye Law No. 147
22 . Maximum Cash Balance
(a) Bye Law No. 142 (b) Bye Law No.145
(c) Bye Law No. 146 (d) Bye Law No. 147
23. Cheque Payments
(a) Bye Law No. 142 (b) Bye Law No.145
(c) Bye Law No. 146 (d) Bye Law No. 147
24. Final Accounts
(a) Bye Law No. 142 (b) Bye Law No.145
(c) Bye Law No. 146 (d) Bye Law No. 147
25. A co-operative housing society has 15 members. All payments in excess of the following limits
shall be made by means of Crossed Ne Payee Cheque.
(a)~ 1,500 (b) ~ 3,000
(c) ~ 4,500 (d) ~ 5,000
26. A member who holds jointly a share of society with others, but whose name does not stand first
in share certificate .
(a) Nominal Member (b) Sympathiser Member
(c) Associate Member (d) Co-member
27. Expulsion of a member can be done
(a) by Managing Committee (b) by the General Body by simple majority
(c) by the General Body by 314th majority (d) by the Chairman
28. Amendment of bye-laws of the society can be done
(a) by the General Body by 213rd majority
(b) by General Body by 213rd majority subject to approval from Registrar
(c) by the General Body by simple majority
(d) by the General Body by 314th majority
29. Proper custody and maintenance of property belonging to the society is the function of
(a) the chairman (b) the managing committee
(c) the secretary (d) the treasurer
30. Proper maintenanc e of accounts relating to financial transactions of the society
(a) the chairman (b) the managing committee ·
(c) the secretary (d) the treasurer
31. To summon all the meetings including Annual General Meeting and record the proceedings in
respective books
(a) the chairman (b) the managing committee
(c) the secretary (d) the treasurer
32. To keep all the necessary registers and records required by the Act and Rules and bye-laws
(a) the chairman (b) the managing committee
(c) the secretary (d) the treasurer
33. Register of audit objections is required to be maintained by a
(a) Bank (b) Life Insurance Company
(c) General Insurance Company (d) Co-operative Society
34. Register of audit objections is required to be maintained by a Co-operative Society under
(a) Section 79(1) of M.S.C.S. Act _
(b) Section 38 of the Co-operative Societies Act read with Rule No. 32
(c) Rule No. 65 of M.S.C.S. Rules
(d} Rule No. 61 of M.S.C.S. Rules
 .,,g and Statutory Rcq11/rt!,r1c nt~ <if Cn~1pcratl11n St1clctlc.~ 265
Account, ·
_List of Members in ·1· Form is required to be m ointoino d by n Co•o porollvo Society u nd er
35
(a) section 79(1) of M .S .C .S. Act
(b) section 38 of the Co-operative Socie ties Ac t road with R ulo N o . 32
(c) Rule No. 65 of M.S.C .S. Rules
(d) Rule No. 61 o f M .S.C.S. Rule s
_List of me111bers sha ll have to be maintained in 'J' form is roquired to be maintain ed b y a Co-
36
operative Society under
(a) Rule No. 33 read with S ection 39
(b) Section 38 of the Co-operative Societies Act read with Rule No. 32
(c) Rule No. 65 of M .S .C .S . Rules
(d) Rule No. 61 of M .S .C .S . Rules
37. Receipts and Payments accounts is required to be prepared by a Co-operative Society under
(a) Section 79(1) of M .S .C .S. Act
(b) Section 38 of the Co-operative Societies Act read with Rule No. 32
(c) Rule No. 65 of M .S .C .S . Rules
(d) Rule No. 61 of M .S .C .S . Rules
38. The prescribed form of Balance Sheet and Profit & Loss Account (Form 'N ') is dealt w ith in
(a) Rule No. 62 of M .S .C .S. Rules (b) Rule No. 32 of M .S.C .S . Rules
(c) Rule No. 65 of M .S.C.S. Rules (d) Rule No. 61 of M.S.C.S. Rules
39. Section _ _ _ of the Act states that a society shall construct its relevant annual financial
statement and arrive at its consequent net profit or loss in the manner prescribed.
(a) 65(1) (b) 65(2)
(c) 64 (d) 68
40. Section _ _ _ of the Act states that no parts of the profits shall be appropriated except with
the approval of the General Body.
(a) 65(1) (b) 65(2)
(c) 64 (d) 68
41. Section - - - of the Act states that no part of the funds other t han the dividend equalisation
or Bonus equalisation shall be paid by way to bonus or dividend to its members.
(a) 65(1) (b) 65(2)
(c) 64 (d ) 68
42 . Annual contribution towards Education Fund by a Primary Consumers Society
(a) 2 Paise per ~ 100 of the working capital
(b) 10% of the working capital
(c) ~ 1 per member having a tenament
(d) 1/10% of working capital
43. Every Society deriving profits, shall transfer _ _ _% of the profit to the Reserve Fund.
(a) 10 (b) 25
(c) 15 (d) 5
44. The first item on Assets side of the balance sheet of a co-operative society is
(a) Fixed Asset (b) Cash at bank
(c) Cash in hand (d) Deposits
45. Tools and Equipments are shown in the balance sheet of a co-operative society
(a) under Fixed Assets (b) under Current Assets
(c) separately (d) Miscellaneous Expenditure
46. Deadstocks is shown in the balance sheet of a co-operative society
(a) under Fixed Assets (b) under Current Assets
(c) separately (d) Miscellaneous Expenditure
9.2 FILL IN THE BLANKS
1. Contribution towards t h e - - - - fund is at the rate of ¼% of the cost of the flat per annum
from each member.
2. Value of Shares of each member in capital of the society is ~ - - - - ·
3. Compulsory transfer to reserve fund of a society every year is at the rate of % of the
net profits each year. ----
266 A,IM11ce,/ Fi11a11cit1/ Accmmtlng (M. Com. Part-I/: SEM-//JJ

4. Maximum amount of cas h bolnnco for a society Is" _ __ _

s.
5. Non-occ upancy C harges ca nnot oxceed _ _ _ _ % of serv ice charge
rs at " _ _ _ _ per membe r.
6. Aud it charges are recovered form membe
of every flnanclal year to
7. Every society shall file retu rns within _ _ _ _ months of th e close
wh ich such accoun ts re late, to th e Registra r.
receive d by the society from Its
8. - - -- Fund of the society shall comprise of all entranc e fees
men,bers.
9. - - - - Fund of th e soc iety sh all comprise of all transfer fees rece ived by the society from its
members.
at the general body subject to
10. Co ntri bution to Repairs and Maintenance Fund is at the rate fixed
of each flat .
th e minimum of _ _ _ _ percent per annum of the construction cost
meeting of the general body,
11 . Contri bution to the Sinking Fund is at the rate decided at the
subject to the minimum of _ _ _ _ percent annum of the constru ction cost of each flat.
rs is at the rate o f - - - - per
12. Contribution to Education and Training Fund from the membe
month / per unit.
ture on repairs , maintenance
13. T h e - - - - Fund of the society may be utilised for the expendi
and renewals of the society's property.
its building .
14. - - - - Fund may be used to the society for reconstruction of
_ _ permiss ion of Genera l Body.
15. Utilisation of all funds will be with the _ _
it is - - - -
16. The Area of Operation of the society is confined to the area in which
of every year to the Registrar.
17. The society shall file annual returns on or before 30th _ _ _ _
are certified a s - - - -
18. The society may write off society's charges due from the members which
by the Statutory Auditor.
mainten ance of the
19. The committee shall be competent to incur expenditure on the repairs and
onetime expendi ture does not exceed
society's property once in a financial year, provided that the
upto _ _ _ _ members ~ 25 ,000 .
and maintenance of the
20 . The committee shall be competent to incur expenditure on the repairs
that the one time expenditure does not
society 's property once in a financial year, provided
exceed upto 26 - 50 members ~ ·
21 . The committ ee shall be compete nt to incur expenditure on the repairs and maintenance of the
ture does not exceed
society's property once in a financial year, provided that the onetime expendi
upto _ _ _ _ and above members upto ~ 1,00 ,000.
the Society.
22 . Bye Law No. _ _ _ _ deals with Composition of the Charges of
the Society.
23 . Bye Law No. _ _ _ _ deals with Break-up of Service Charges of
by the Membe rs.
24 . Bye Law No. _ _ _ _ deals with Sharing of. the Society Charges
25 . Bye-Law No. _ _ _ _ deals with .Parking Charges .
Charges .
26 . Bye-Law No. _ _ _ _ deals with Interest on Delayed Payment of
27 . Bye Law No. _ _ _ _ deals with Non-occupancy Charges .
28 . Bye Law No. _ _ _ _ deals with Payment of Society Charges .
t.
29 . Bye Law No. _ _ _ _ deals with Review of case in default of paymen
on the defaulte d charges .
30 . Bye Law No. _ _ _ _ deals with Interest
31. Bye Law No. _ _ _ _ deals with Books, Records & Registers.
32. Bye Law No. _ _ _ _ lays down the Maximum Cash Balance .
33 . Bye Law No. _ _ _ _ deals with Cheque Payments .
34 . Bye Law No. _ _ _ _ deals with Final Accounts.

9.3 MATCH THE FOLLOWING COLUMNS

COLUMN A COLUMN B
[A]
(a) Income Less Expenditure
p) Members Fund
(b) Receipt & Payment Ale
(2) Surplus
(c) Prize Fund
(3) Deficit
Cash & Bank Summary (d) Capital Fund
(4)
Special Fund (e) Expenditure Less Income
(5)
(f) . Receipts Less Payments
(g) Payments Less Receipts

J
 __:::as
. ,d StatutmJ' Req11iremc111.~ ,if Co-t111crat/1,,, S11clctl«J,v ] f, 7
;fcc1Ju111111,: a, •

COLUMN A COLUMN B
[9)
contribution townrds tho sinking fund (0) t 1 or t 6
(1)
Entrance Foos (b) t 300
(2)
Share of each mombor In copltnl (c) t 36 por mombor por yoar
(3)
of th o society (d) maximum a t 10% o f eervlco chargoe

(4)
compulsory trans fer to reserve fund (e) ¼% o f tho cost o f th o flat por annum
every year from each member
Maximum amount of cash ba lance (f) minimum of 0 .75 percent per annum
(5)
Non-occupancy Charges of th e construc tion cost o f each fl at
(6)
Audit charges (g) 25% of th e net profits each year
(7)
Normal recurring repairs (h) ~ 250
(8)

COLUMN A COLUMN B
[C]
(1) Bye Law No. 67 (a) Interest on Delayed Payment of Charges
(2) Bye Law No. 68 (b) Interest on the defaulted charges
(3) Bye Law No. 69 (c) Composition of the Charges of
(4) Bye-Law No. 84 the Society
(5) Bye-Law No. 72 (d) Payment of Society Charges
(6) Bye Law No. 43 (e) Final Accounts
(7) Bye Law No. 70 (f) Break-up of Service Charges of
(8) By Law No.71 the Society
(9) Bye Law No. 72 (g) Books, Records & Registers
(10) Bye Law No. 142 (h) Sharing of the Society Charges
( 11) Bye Law No.145 by the Members
(12) Bye Law No. 146 (i) Maximum Cash Balance
(13) Bye Law No. 147 (j) Cheque Payments
(k) Parking Charges
(I) Review of case in default of payment
(m) Non-occupancy Charges

9.4 STATE WHETHER TRUE OR FALSE

1. A co-op. society operating in several states has to follow the co-operative societies Act of all the
concerned states.
2. Co-operative society is a corporate body distinct from its members.
3. Under the Maharashtra Co-op. Societies Act, audit of a co-op. society can be conducted by a
person other than a chartered accountant.
4 . Under the Maharashtra Co-op. Societies Act, audit of a co-op. society can be conducted by a
person who holds a Government diploma in Co-op. accounts and audit.
5 . Under the Maharashtra Co-op. Societies Act, audit of a co-op. society can be conducted by a
person who has served as an auditor in the Co-operative department of the State Government.
6 . Under the Maharashtra Co-op. Societies Act, the term 'member' includes an associate member.
7. Under the Maharashtra Co-op. Societies Act, a nominal member is not treated as a 'member'.
8. Under the Maharashtra Co-op. Societies Act, a society must maintain a Register of audit objections
and their rectifications.
9. Under the Maharashtra Co-op. Societies Act, every Society shall transfer 25 % of the profit to
the Reserve Fund.
10. Under the Maharashtra Co-op. Societies Act, no society can incur a borrowing liability exceeding
two times the total amount of paid up capital , accumulated reserve fund, and building fund
minus accumulated losses.
11 . Under the Maharashtra Co-op. Societies Act, an auditor has, under certain circumstances, a
right to impound the books or documents ofa society.
12. Under the Maharashtra Co-op. Societies Act, the [Link] of co-operative societies are to be
decided by the General Body.
LlJlJ Adi1a11ced Fi11ancia/ Accm111ti111( (M. 01111. Pt1rt-/J: SEM-111)

13. Under the Maharashtra Co-op . Societies Act, auditor has to report on transactions Involving
infringements of provisions of the Act, Rules and Bye-iaws.
14. Under the Maharashtra Co-op. Societies Act, auditor need not report on sums which ought to
but have not been brought Into acco unt by th e society.
15. Under the Maharasht ra Co-op. Societies Act, auditor has to report on any material impropriety
or irregularity in th e exp enditure or in th e realisation of moneys due to the society.
16. Under the Maharashtra Co -op . Societies Act, auditor need not report on any money or property
belonging to the society wh ic h appears to th e auditor to be bad or doubtful debt.
17. "Housing Society" also inc lud es society which provides open plots to m embers for housing .
18. Subject to bye -laws members of Tenant Co -partnership Societies are free to reconstruct, repair,
rebuild. demolish the property acco rding to their free will without any Interference from the society.
19. A co-operative housing society does not prepare Trading and Profit & Loss Account.
20. Income from 'Non-occupanc y charges', parking charges , outsiders occupancy charges is normally
credited to the Sinking Fund Ale .
21 . Entrance Fees are treated as revenue receipts .
22 . Transfer Fees are credited to Repairs Fund .
23. Authorised Share Capital of a Co-operative Housing Society is mentioned in the Memorandum
of Association of the society.
24. Every member on his admission to the society has to purchase 5 shares of ~ 50 each of the
housing society.
25 . Debit balance in income & expenditure account should be deducted from the Share Capital.
26. Property Taxes are divided among the members equally.
27_. Water charges are divided among the members on the basis of the area of flats .
28. Normal recurring repairs should be recovered from mebers @ minimum of ¼% of the cost of the
flat per annum from each member.
29 . Normal recurring repairs are divided among the members equally.
30. Expenses on repairs and maintenance of the lift, including charges for running the lift are not
recovered from ground floor flats not using the lifts.
31 . Parking Charges are divided among the members equally.
32. Insurance Charges are divided among the members equally.

9.5 CHECK YOUR ANSWERS -

9.1

1. (a) 8. (c) 15. (a) 22. (b) 29. (b) 36. (a) 43. (b)
2. (a) 9. (c) 16. (b) 23 . (c) 30. (b) 37 . (d) 44. (c)
3. (d) 10. (c) 17. (a) 24. (d) 31 . (b) 38 . (a) 45 . (a)
4. (d) 11 . (c) 18. (c) 25 . (a) 32 . (b) 39. (a) 46 . (a)
5. (d) 12. (a) 19. (a) 26. (c) 33. (d) 40. (b)
6. (b) 13. (b) 20 . (c) 27 . (c) 34 . (c) 41. (c)
7. (b) 14. (c) 21 . (a) 28. (b) 35. (b) 42 . (a)

9.2 (1) Sinking (2) 250 (3) 25 (4) 300 (5) 10 (6) 36 (7) six (8) Reserve (9) Reserve (1 O) 0.75
(11) 0.25 (12) ~ 10 (13) Reserve (14) Sinking (15) prior (16) located (17) September
(18) irrecoverable (19) 25 (20) 50 ,000 (21) 51 (22) 67 (23) 68 (24) 69 (25) 84 (26) 72 (27) 43
(28) 70 (29) 71 (30) 72 (31) 142 (32) 145 (33) 146 (34) 147
9.3 A : (1) - (d), (2) - (a), (3) - (e), (4) - (b) , (5) - (c)
B : (1) - (e) , (2) - (a), (3) - (h) , (4) - (g), (5) - (b), (6) - (d), Cl) - (c) , (8) - (f)
C: (1) - (c) , (2) - (f), (3) - (h) , (4) - (k) , (5) - (a) , (6) - (m), (7) - (d), (8) - (I), (9) - (b), (1 0) - (g),
(11) - (i), (12) - U), (13) - (e) ·
9.4 True: 2 , 3, 4, 5, 6, 8, 9, 11, 13, 15, 17, 19, 24
False: 1, 7, 10, 12, 14, 16, 18,20,21,22, 23, 25 , 26,27,28 , 29,30, 31, 32
18. False. Tenant Ownership Societies.
19. True. A co-operative housing society prepares Income and Expenditure Account.
20. False. Repairs and Maintenance Fund Ale.
21. False. Credited to Reserve Fund and not treated as revenue receipts.
Accounting and Statutory Requirements of Co-operative Societies 269
22. False. Credited to Reserve Fund.
23. False. In the bye-laws of the society.
25. False. Debit balance In Income & expenditure account Indicates Inadequate contributions from
members towards the expenses and therefore society should take action to revise the rates of
contribution.
26. False. Property Taxes are divided among the members as fixed by the Local Authority.
27 .False. On the basis of total number and size of Inlets provided In each flat.
28. False. Minimum of 0.75 percent per annum of the construction cost of each flat.
29 . False. At the rate fixed at the General Body Meeting from time to time, subject to th~.,ilnimum
of 0.75 percent per annum of the construction cost of each flat. ~·
30. False. Equally by all the members of the building in which lift Is provided, Irrespective bf the fact
whether they use the lift or not. ·
31. False. At the rate fixed at the General Body Meeting from time to time from members using
parking facility.
32 . False. On the basis of Built up area of each flat.