Chapter 1 Company Accounts Financial Statements of Not-for-Profit Organisations

TS Grewal Solutions for Class 12 Accountancy Vol 1 Chapter 1

TS Grewal Solutions for Class 12 A/countancy Chapter 1 Company A/counts Financial Statements of Not-for-Profit Organisations is considered to be an important concept to be studied thoroughly by the students. Here, we have provided TS Grewal A/countancy solutions for class 12.

Class 12 TS Grewal Solutions A/countancy Vol 1 Chapter 1

Practical Question

Question 1

From the information given below, prepare Receipts and Payments A/count of Railway Club for the year ended March 31st, 2019:

Cash in Hand on 1st April, 2018

4,390

Salaries

21,500

Subscription

37,600

Honorarium to Secretary

2,500

Donations

8,000

Interest Received on Investments

2,950

Entrance Fees

4,300

Printing and Stationery

350

Rent Received for Club Halls

5,250

Petty Cash Expenses

900

Electricity Charges

3,440

Insurance Premium Paid

310

Taxes paid

490

Solution:

Dr.

Receipts and Payments A/c. as on March 31st, 2019

Cr.

Receipts

Payments

To balance b/d

4,390

By Electricity Charges

3,440

To Subscriptions

37,600

By Taxes Paid

490

To Donations

8,000

By Salaries

21,500

To Entrance Fees

4,300

By Honorarium to Secretary

2,500

To Rent Received for Club Halls

5,250

By Printing and Stationery

350

To Interest Received on Investments

2,950

By Petty Cash Expenses

900

By Insurance Premium Paid

310

By balance c/d

33,000

62,490

62,490

Question 2

Bengal Cricket Club was inaugurated on 1st April, 2018. It had the following Receipts and Payments during the year ended March 31st, 2019:

Receipts: Entrance Fees ₹ 10,000; Subscriptions ₹ 60,000; Donations ₹ 10,000.

Payments: Rent ₹ 15,000; Postages ₹ 1,000; Newspapers and Magazines ₹ 8,000; Investments ₹ 30,000; Stationery ₹ 4,000; Entertainment Expenses ₹ 3,000; Miscellaneous Expenses ₹ 2,000.

Show the Receipts and Payments A/count for the year ended March 31st, 2019

Solution:

Dr.

Receipts and Payments A/c. as on March 31st, 2019

Cr.

Receipts

Payments

To Entrance Fees

10,000

By Rent

15,000

To Subscriptions

60,000

By Postages

1,000

To Donations

10,000

By Newspapers and Magazines

8,000

By Investments

30,000

By Stationery

4,000

By Entertainment Expenses

3,000

By Miscellaneous Expenses

2,000

By balance c/d

(as on March 31st, 2019)

17,000

80,000

80,000

Question 3

The following information were obtained from the books of Delhi Club as on March 31st, 2019 at the end of the first year of the Club, prepare Receipts and Payment A/count for the year ending March 31st, 2019:

Receipts

Payments

Donation for Building and Library Room

2,00,000

Purchase of Land

10,000

Entrance Fees

17,000

Purchase of Furniture

1,30,000

Subscription

19,000

Salaries

4,800

Lockers Rent

1,660

Maintenance of Playgrounds

1,000

Refreshment Receipts

16,000

Rent

8,000

Government Grant

25,000

Refreshment Payments

8,000

Library Books

25,000

Purchase of 9% Government Bonds

1,60,000

Term Deposit with Bank

15,000

Solution:

Dr.

Receipts and Payments A/c. as on March 31st, 2019

Cr.

Receipts

Payments

To Donation for Building and Library Room

2,00,000

By Purchase of Land

10,000

To Entrance Fees

17,000

By Purchase of Furniture

1,30,000

To Subscription

19,000

By Salaries

4,800

To Lockers Rent

1,660

By Maintenance of Playgrounds

1,000

To Refreshment Receipts

16,000

By Rent

8,000

To Government Grant

25,000

By Refreshment Payments

8,000

To balance c/d

83,140

By Library Books

25,000

By Purchase of 9% Government Bonds @ 9%

1,60,000

By Term Deposit with Bank

15,000

3,61,800

3,61,800

Question 4

From the following information, prepare Receipts and Payments A/count of Long-town Sports Club for the year ending March 31st, 2019:

Particulars

Particulars

Opening Balance:

Charity Given

10,000

Cash in Hand

50,000

Match Expenses

30,000

Cash at bank

60,000

Salaries

63,600

Subscription Received:

Honorarium

4,000

2017-18

4,000

12% Investment Purchased

60,000

2018-19

1,40,000

Entrance Fees

4,000

2019-20

8,000

Interest on 12% Investments

6,000

Furniture Purchased

70,000

Closing Balance:

General Donations

20,000

Cash in Hand

24,000

Donations for Tournament

40,000

Cash at Bank

?

Solution:

Dr.

Receipts and Payments A/c. as on March 31st, 2019

Cr.

Receipts

Payments

To Opening Balance:

By Charity Given

10,000

Cash in Hand

50,000

By Match Expenses

30,000

Cash at Bank

60,000

By Salaries

63,600

To Subscriptions Received:

By Honorarium

4,000

2017-18

4,000

By 12% Investment Purchased

60,000

2018-19

1,40,000

By Furniture Purchased

70,000

2019-20

8,000

By Closing Balance

To Entrance Fees

4,000

Cash in Hand

24,000

To General Donations

20,000

Cash at Bank (WN1) (Bal. Fig.)

70,400

To Donations for Tournament

40,000

To Interest on 12% Investments

6,000

3,32,000

3,32,000

Working Notes: Closing balance Evaluation

Total Receipts = ₹ 3,32,000

Total Payments = ₹ 2,37,600

Cash in Hand = ₹ 24,000

Cash at Bank

=

Total Receipts – (Total Payments + Closing Balance of Cash)

=

₹ [3,32,000 – 2,61,600] = ₹ 70,400

Question 5

From the following particulars of Evergreen club, prepare Receipts and payments A/count for the year ended March 31st,2019:

Cash in Hand on 1st April,2018

50,000

Newspaper and Magazines

87,000

Cash at Bank on 1st April,2018

3,40,000

Sale of Old Newspaper

12,000

Subscriptions Received

15,70,000

Books Purchased

3,40,000

Donations Received

2,80,000

Sports Materials Purchased

4,70,000

Investments purchased

5,00,000

Interest on Investments Received

50,000

Rent paid

50,000

Honorarium to coaches

1,50,000

General Expenses

2,30,000

Cash in Hand on March 31st,2019

30,000

Postage and stationery

25,000

Cash at Bank on March 31st ,2019

​?

Solution:

Receipts and Payments A/c as on March 31st, 2019

Dr.

Cr.

Receipts

Payments

Balance b/d

Investments Purchased

5,00,000

Cash in Hand

50,000

Rent Paid

50,000

Cash at Bank

3,40,000

3,90,000

General Expenses

2,30,000

Subscription Received

15,70,000

Postage and Stationery

25,000

Donation Received

2,80,000

Newspapers and Magazines

87,000

Sale of Old Newspapers

12,000

Books Purchased

3,40,000

Interest on Investments Received

50,000

Sports Material Purchased

4,70,000

Honorarium to Coacher

1,50,000

Balance c/d

Cash in Hand

30000

Cash at Bank (Balancing Figure)

4,20000

4,50,000

23,02,000

23,02,000

Question 6

How are the following items shown in the accounts of a Not-for-Profit Organisation ?

Tournament Fund

50,000

Tournament Expenses

15,000

Receipts from Tournament

20,000

Solution:

Balance Sheet

Liabilities

Assets

Tournament Found

50,000

Add: Tournament Receipts

20,000

Less: Tournament Expenses

(15,000)

55,000

Question 7

How are the following dealt with in the accounts of a Not-for-Profit Organisation

Case I

Dr. ₹

Cr. ₹

Case II

Dr. ₹

Cr. ₹

Prize Fund

Prizes Paid

Match Expenses

12,000

15,000

50,000

Match Fund

Match Expenses

Investments of Match Fund

Interest on Match Fund

Investments

Prizes Paid

35,000

60,000

19,000

1,00,000

3,000

Solution:

Case 1

Balance Sheet

Liabilities

Assets

Prize Fund

50,000

Less: Prize Paid

(12,000)

38,000

Note: Here, ₹15,000 match expenses will not be deducted from the prize fund as it is kept for the prizes. But, ₹15,000 match expenses will be debited to the Income and Expenditure Account as no particular fund is kept for such expenses.

Case 2

Balance Sheet

Liabilities

Assets

Match Fund

1,00,000

Match Fund Investments

60,000

Less: Match Expenses

(35,000)

Add: Interest on Match Fund Investments

3,000

68,000

Note: Here, ₹19,000 prizes amount will not be deducted from the match fund as it is kept for the expenses relating to the Match. But, ₹19,000 prize amount will be debited to the Income and Expenditure Account as no particular fund is kept for distribution of prizes. Similarly, the Match Fund Investments interest will be added to the Match Fund as the income is linked to this particular fund.

Question 8

How are the following dealt with while preparing the final accounts of a club?

Particulars

Dr. (₹)

Cr. (₹)

Match Fund

……

80,000

Match Fund Investments

72,000

….

Match Fund Bank Balance

3,500

….

Interest on Match Fund Investments

…..

2,880

Match Expenses

5,500

….

Solution:

Balance Sheet as at March 31st, 2019

Liabilities

Assets

Match Fund

80,000

Match Fund Investment

72,000

Add: Interest on Match Fund Investment

2,880

Match Fund Bank Balance

3,500

Less: Match Expenses

(5,500)

77,380

Question 9

From the following information of a club show the amounts of match expenses and match fund in the appropriate Financial Statements of the club for the year ended on 31st March, 2019:

Particulars

Match expenses paid during the year ended 31st March, 2019

1,02,000

Match Fund as on 31st March, 2019

24,000

Donation for Match Fund (Received during the year ended 31st March, 2019)

40,000

Proceeds from the sale of match tickets (Received during the year ended 31st March, 2019)

15,000

Solution:

Balance Sheet as at March 31st, 2019

Liabilities

Assets

Match Fund

24,000

Add: Donation for Match Fund

40,000

Add: Proceed from Sale of Tickets

15,000

Less: Match Expenses (Note)

(79,000)

NIL

Dr.

Income and Expenditure A/c as on March 31st, 2019

Cr.

Expenditure

Income

Match Expenses (Note)

23,000

Note: ₹1,02,000 is a total Match expenses,however, the available amount is ₹ 79,000 (i.e. ₹ 24,000 + ₹ 40,000 + ₹15,000). This indicates that only ₹ 79,000 is accessible through the fund while ₹ 23,000 (i.e. ₹ 1,02,000 – ₹ 79,000) the remaining amount is debited to the Income and Expenditure Account.

Question 10

Show how are the following items dealt with while preparing the final accounts for the year ended 31st March, 2019 of a Not-for-profit Organisation:

Case I

Expenditure on construction of the Pavilion is ₹ 6,00,000. The construction work is in progress and has not yet been completed. Capital Fund as of 31st March, 2018 is ₹ 20,00,000.

Case II

Expenditure on construction of the Pavilion is ₹ 6,00,000. The construction work is in progress and has not yet been completed. Pavilion Fund as of 31st March, 2018 is ₹ 10,00,000 and Capital Fund as at 31st March, 2018 is ₹ 20,00,000.

Case III

Expenditure on construction of the Pavilion is ₹ 6,00,000. The construction work is in progress and has not yet been completed. Pavilion Fund as of 31st March, 2018 is ₹ 10,00,000, and Capital Fund as at 31st March, 2018 is ₹ 20,00,000. Donation Received for the Pavilion on 1st January, 2019 is ₹ 5,00,000.

Solution:

Case 1

Balance Sheet as on March 31st, 2019

Liabilities

Assets

Capital Fund

20,00,000

Pavilion Work-in-Progress

6,00,000

Case 2

Balance Sheet as on March 31st, 2019

Liabilities

Assets

Pavilion Fund

10,00,000

Pavilion Work-in-Progress

6,00,000

Less: Expenditure on Construction of Pavilion

(6,00,000)

4,00,000

Capital Fund

20,00,000

Add: Pavilion Work-in-Progress

6,00,000

26,00,000

Case 3

Balance Sheet as on March 31st, 2019

Liabilities

Assets

Pavilion Fund

10,00,000

Add: Donation

5,00,000

Pavilion Work-in-Progress

6,00,000

Less: Expenditure on Construction of Pavilion

(6,00,000)

9,00,000

Capital Fund

20,00,000

Add: Pavilion Work-in-Progress

6,00,000

26,00,000

Question 11

How is Entrance Fees dealt with while preparing the final accounts for the year ended 31st March, 2019 in each of the following alternative cases?

Case I During the year ended 31st March, 2019, Entrance Fees received was ₹ 1,00,000.

Case II During the year ended 31st March, 2019, Entrance Fees received was ₹ 1,00,000.Out of this, ₹ 25,000 was received from individuals whose membership is not yet approved.

Solution:

Case 1

Income and Expenditure A/c

as on March 31, 2019

Dr.

Cr.

Expenditure

Income

Entrance Fees

1,00,000

Case 2

Income and Expenditure A/c

as on March 31, 2019

Dr.

Cr.

Expenditure

Income

Entrance Fees

75,000

(1,00,000 – 25,000)

Question 12

In the year ended 31st March, 2019, subscriptions received by the Jaipur Literary Society were ₹ 4,20,000. These subscriptions include ₹ 14,000 received for the year ended 31st March, 2018. On 31st March, 2019, subscriptions due but not received were ₹ 10,000. What amount should be credited to Income and Expenditure Account for the year ended 31st March, 2019 as subscription?

Solution:

Income and Expenditure A/c as on March 31st, 2019

Dr.

Cr.

Expenditure

Income

Subscription

4,20,000

Less: Outstanding for 2017-18

14,000

Add: Outstanding for 218-19

10,000

4,16,000

Question 13

Subscriptions received during the year ended 31st March , 2019 are:

For the year ended 31st March, 2018

1,600

For the year ended 31st March, 2019

84,400

For the year ended 31st March, 2020

3,200

89,200

There are 450 members, each paying an annual subscription of ₹ 200; ₹ 1,800 were in arrears for the year ended 31st March, 2018.

Calculate amount of subscriptions to be credited to Income and Expenditure Account for the year ended 31st March, 2019.

Solution:

Income and Expenditure A/c as on ended March 31st, 2019

Dr.

Cr.

Expenditure

Income

Subscription

(450 Members × Rs 200 each)

90,000

Question 14

In the year ended 31st March, 2019, subscriptions received by Kings Club, Delhi were ₹ 4,09,000 including ₹ 5,000 for the year ended 31st March, 2018 and ₹ 10,000 for the year ended 31st March, 2020. At the end of the year ended 31st March, 2019, subscriptions outstanding for the year ended 31st March, 2019 were ₹ 15,000. The subscriptions due but not received at the end of the previous year, i.e., 31st March, 2018 were ₹ 8,000, while subscriptions received in advance on the same date were ₹ 18,000.

Calculate amount of subscriptions to be credited to Income and Expenditure Account for the year ended 31st March, 2019.

Solution:

Subscription as on March 31st, 2019

Particulars

Received subscription for the year 2018-19

4,09,000

Add: Outstanding subscription for 2018-19 (present year)

15,000

Less: Received subscription for 2017-18 (Previous year)

(5,000)

Add: Received advanced subscription in 2017-18 (Previous year)

18,000

Less: Received advanced subscription for 2019-20 (Next year)

10,000)

Credited subscription to Income and Expenditure Account

4,27,000

Question 15

From the following information, calculate amount of subscriptions to be credited to the Income and Expenditure Account for the year ended 31st March, 2019:

1st April, 2018

Subscriptions in Arrears

50,000

Subscriptions Received in Advance

30,000

31st March, 2019

Subscriptions in Arrears

25,000

Subscriptions Received in Advance

70,000

Subscriptions received during the year ended 31st March, 2019 – ₹ 3,00,000

Subscription still in arrears for the year 2017 – 18 – ₹ 10,000.

Solution:

Particulars

Subscription received for the year 2018-19

3,00,000

Less: Subscription-in-Arrears for the year 2017-18

50,000

Add: Subscription-in-Arrears for the year 2018-19

25,000

Add: Subscription-in Advance for the year 2018-19

30,000

Less: Subscription-in Advance for the year 2019-20

70,000

Credited subscription to Income and Expenditure Account

2,35,000

Question 16

Calculate amount of subscriptions which will be treated as income for the year ended 31st March, 2019 for each of the following cases:

Particulars

Case I.

(i) Subscriptions collected during the year ended 31st March, 2019

(ii) Subscriptions in arrears for the year ended 31st March, 2019

(iii) Subscriptions received in advance for the year ended 31st March, 2020

2,50,000

6,000

5,000

Case II.

(i) Subscriptions collected during the year ended 31st March, 2019

(ii) Subscriptions for the year ended 31st March, 2019 collected in the year ended 31st March, 2018

(iii) Subscriptions unpaid for the year ended 31st March, 2019

49,000

3,000

2,000

Case III.

(i) Subscriptions received during the year ended 31st March, 2019

(ii) Subscriptions outstanding in the beginning of the year ended 31st March, 2019

(iii) Subscriptions not yet collected for the year ended 31st March, 2019

25,000

3,000

5,000

Case IV.

(i) Subscriptions received during the year ended 31st March, 2019

(ii) Subscriptions outstanding in the beginning of the year ended 31st March, 2019

(iii) Subscriptions not yet collected for the year ended 31st March, 2019

(iv) Subscriptions received in advance for the year ended 31st March, 2020

80,000

5,000

8,000

2,000

Case V.

(i) Subscriptions received during the year ended 31st March, 2019

(ii) Subscriptions outstanding at the end of the year ended 31st March, 2018

(iii) Subscriptions received in advance on 31st March, 2018

(iv) Subscriptions received in advance on 31st March, 2019

(v) Subscriptions not yet collected for the year ended 31st March, 2019

90,000

5,000

3,000

4,000

6,000

Solution:

Case 1

Subscription statement as on March 31st, 2019

Particulars

Collected subscriptions in the year 2018-19

2,50,000

Add: Subscriptions-in-arrears for the year 2018-19

6,000

Less: Received advance subscriptions for the year 2019-20

(5,000)

Subscriptions Income for the year 2018-19

2,51,000

Case 2

Subscription statement as on March 31st, 2019

Particulars

Collected subscriptions in the year 2018-19

49,000

Add: Collected subscriptions for the year 2018-19 in 2017-18

3,000

Add: Unpaid subscriptions for the year 2018-19

2,000

Subscriptions Income for the year 2018-19

54,000

Case 3

Subscription statement as on March 31st, 2019

Particulars

Received subscriptions for the year 2018-19

25,000

Less: Outstanding subscriptions in the starting of the year 2018-19

(3,000)

Add: Subscriptions not collected for the year 2018-19

5,000

Subscriptions Income for the year 2018-19

27,000

Case 4

Subscription statement as on March 31st, 2019

Particulars

Received subscriptions for the year 2018-19

80,000

Less: Outstanding subscriptions in the starting of the year 2018-19

(5,000)

Add: Subscriptions not collected yet for the year 2018-19

8,000

Less: Received advance subscriptions for the year 2019-20

(2,000)

Subscriptions Income for the year 2018-19

81,000

Case 5

Subscription statement as on March 31st, 2019

Particulars

Received subscriptions for the year 2018-19

90,000

Less: Outstanding subscriptions at the year end 2017-18

(5,000)

Add: Received advance subscriptions on March 31st, 2018

3,000

Less: Received advance subscriptions on March 31st, 2019

(4,000)

Add: Subscriptions not collected yet for the year 2018-19

6,000

Subscriptions Income for the year 2018-19

90,000

Question 17

From the following particulars, calculate amount of subscriptions to be credited to the Income and Expenditure Account for the year ended 31st March, 2019:

(a)

Subscriptions in arrears on 31st March, 2018

500

(b)

Subscriptions received in advance on 31st March, 2018 for the year ended on 31st March, 2019

1,100

(c)

Total Subscriptions received during the year ended 31st March, 2019 (including ₹ 400 for the year ended 31st March, 2018, ₹ 1,200 for the year ended 31st March, 2020 and ₹ 300 for the year ended 31st March, 2021)

35,400

(d)

Subscriptions outstanding for year ended 31st March, 2019

400

Solution:

Subscription statement as on March 31st, 2019

Particulars

Subscriptions received during 2018-19

35,400

Less: Received subscriptions-in-arrears for the year 2017-18

(400)

Less: Received-in-advance subscriptions for the year 2019-20

(1,200)

Less: Received-in-advance subscriptions for the year 2017-18

(300)

Add: Outstanding subscriptions for the year 2018-19

400

Add: Received subscriptions in the year 2017-18 for 2018-19

1,100

Credited subscriptions to Income and Expenditure Account

35,000

Question 18

How are the following items of subscriptions shown in the Income and Expenditure Account for the year ended 31st March, 2019 and Balance Sheets as at 31st March, 2018 and 2019?

Subscriptions received during the year ended 31st March, 2019

3,58,500

Subscriptions outstanding on 31st March, 2018

30,000

Subscriptions received in Advance on 31st March,2018

22,500

Subscriptions received in Advance on 31st March, 2019

13,500

Subscriptions outstanding on 31st March, 2019

37,500

(including ​₹ 12,500 for the year ended 31st March, 2018)

Solution:

Income and Expenditure Account as on March 31, 2019

Dr.

Cr.

Expenditure

Income

Subscriptions

3,58,500

Add: Outstanding subscription at the end

37,500

Add: Advance subscription in the beginning

22,500

Less: Outstanding subscription in the beginning

30,000

Less: Advance subscription at the end

13,500

3,75,000

Balance Sheet as on March 31, 2018

Liabilities

Assets

Subscription received in Advance

2,250

Subscriptions Outstanding

3,000

Balance Sheet as on March 31, 2019

Liabilities

Assets

Received advance subscription

1,350

Outstanding subscriptions

3,750

Question 19

From the following information, calculate amount of subscriptions outstanding for the year ended 31st March, 2019:

A club has 200 members each paying an annual subscription of ₹ 1,000. The Receipts and Payments Account for the year showed a sum of ₹ 2,05,000 received as subscriptions. The following additional information is provided :

Subscriptions Outstanding on 31st March, 2018

30,000

Subscriptions Received in Advance on 31st March, 2019

40,000

Subscriptions Received in Advance on 31st March, 2018

14,000

Solution:

Dr.

Subscriptions A/c as on 31st March, 2019

Cr.

Particulars

Particulars

Income & Expenditure

(200 members × ₹ 100 each)

2,00,000

Bank (Received subscriptions)

2,05,000

In the beginning, outstanding Subscriptions

30,000

Received advance subscriptions

14,000

Received subscription in advance

40,000

At the end, outstanding subscriptions (Balancing Figure)

51,000

2,70,000

2,70,000

Question 20

From the following information, prepare Subscription Account for the year ending 31st March, 2019:

Particulars

31st March, 2018

31st March, 2019

Subscription in Arrears

20,000

18,000

Subscription in Advance

13,000

11,000

In the year ending 31st March, 2019, subscription received were ₹ 2,10,000 (including ₹ 6,000 of arrears from previous year) and subscription arrears of previous year were written off ₹ 4,000.

Solution:

Dr.

Subscriptions A/c as on 31st March, 2019

Cr.

Date

Particulars

Date

Particulars

2018

2018

April 1

To Outstanding Subscriptions A/c

20,000

April 1

By Advance received subscriptions A/c

13,000

2019

2019

March 31

To Advance received subscriptions e A/c

11,000

March 31

By Subscriptions written off (Inc. & Exp. A/c)

4,000

March 31

To Income & Expenditure A/c

(Bal. Fig.)

2,14,000

March 31

By Bank A/c

2,10,000

March 31

By Outstanding Subscriptions A/c

18,000

2,45,000

2,45,000

Question 21

On the basis of information given below, calculate the amount of medicines to be debited to the Income and Expenditure Account of Good Health Hospital for the year ended 31st March, 2019:

Particulars

1st April, 2018

31st March, 2019

Stock of Medicines

1,75,750

1,44,650

Creditors for Medicines

15,06,900

18,20,700

Medicines purchased during the year ended 31st March, 2019 were ​​₹ 60,80,700.

Solution:

Medicine Consumed statement as on 31st March, 2019

Particulars

Purchased medicine for the year 2018-19

60,80,700

Add: Beginning stock as on April 1st, 2018

1,75,750

Less: End Stock as on March 31st, 2019

(1,44,650)

Debited medicine to Income and Expenditure Account

61,11,800

Question 22

Calculate amount of medicines consumed during the year ended 31st March, 2019:

Opening Stock of Medicines

1,00,000

Opening Creditors for Medicines

90,000

Cash purchases of Medicines during the year

3,00,000

Closing Stock of Medicines

1,50,000

Closing Creditors for Medicines

1,30,000

Solution:

Medicine Consumed statement as on 31st March, 2019

Particulars

Medicine purchases in cash during the year 2018-19

3,00,000

Add: Medicines Opening Stock

1,00,000

Less: Medicines Closing Stock

1,50,000

Add: Closing Creditors of Medicines

1,30,000

Less: Opening Creditors of Medicines

90,000

Medicines Consumed in the year 2018-19

2,90,000

Question 23

Calculate amount to be posted to the Income and Expenditure Account for the year ended 31st March, 2019:

(i)

Amount paid for stationery during the year ended 31st March, 2019 – ₹5,400; Stock of Stationery in Hand on 31st March, 2019 – ₹ 250.

(ii)

Stock of Stationery in Hand on 1st April, 2018 – ₹ 1,500; Payment made for Stationery during the year ended 31st March, 2019 – ₹ 5,400; Stock of Stationery in Hand on 31st March, 2019 – ₹ 250.

(iii)

Stock of Stationery on 1st April, 2018

1,500

Creditors for Stationery on 1st April, 2018

1,000

Amount paid for Stationery during the year

5,400

Stock of Stationery on 31st March, 2019

250

Solution:

(i)

Stationery Consumed as on March 31st, 2019

Particulars

Paid stationery amount as on 31st March, 2019

5,400

Less: Closing Stock as on March 31st, 2019

250

Stationery amount to be posted to Income and Expenditure Account

5,150

(ii)

Stationery Consumed as on March 31st, 2019

Particulars

Stationery payment as on 31st March, 2019

5,400

Add: Stock opening as on April 1st, 2018

1,500

Less: Stock Closing as on March 31st, 2019

250

Stationery amount to be recorded to Income and Expenditure Account

6,650

(iii)

Stationery Consumed as on March 31st, 2019

Particulars

Paid stationery amount as on 31st March, 2019

5,400

Add: Stock opening as on April 1st, 2018

1,500

Less: Stock Closing as on March 31st, 2019

250

Less: Creditors for Stationery at the starting (i.e April 1st, 2018)

1,000

Stationery amount to be recorded to Income and Expenditure Account

5,650

Question 24

On the basis of the following information, calculate amount that will appear against the term ‘Stationery Used’ in the Income and Expenditure Account for the year ended 31st March, 2019:

Stock of Stationery as at 1st April, 2018

12,000

Creditors for Stationery as at 1st April, 2018

25,600

Amount paid for Stationery during the year ended 31st March, 2019

1,40,000

Stock of Stationery as at 31st March, 2019

23,200

Creditors for Stationery as at 31st March,2019

24,000

Solution:

Stationery Consumed as on March 31st, 2019

Particulars

Paid stationery amount for the year 2018-19

1,40,000

Add: Stock opening as on April 1st, 2018

12,000

Less: Stock Closing as on March 31st, 2019

(23,200)

Add: Creditors at the end (i.e March 31st, 2019)

24,000

Less: Creditors in the beginning (i.e April 1st, 2018)

(25,600)

Stationery amount to be recorded to Income and Expenditure Account

1,27,200

Question 25

Calculate the amount that will be posted to the Income and Expenditure Account for the year ended March 31st, 2019:

Stock of Stationery as at 1st April, 2018

30,000

Creditors for Stationery on 1st April, 2018

20,000

Advance paid for stationery carried forward from the year ended 31st March, 2018

2,000

Amount paid for the stationary during the year ended 31st March, 2019

1,08,000

Stock of stationery on 31st March, 2019

5,000

Creditors for stationery on 31st March, 2019

13,000

Advance paid for stationery on 31st March, 2019

3,000

Solution:

Stationery Consumed as on March 31st, 2019

Particulars

Paid stationery amount for year 2018-19

1,08,000

Add: Stock opening as on April 1st, 2018

30,000

Less: Stock Closing as on March 31st, 2019

5,000

Less: Creditors in the beginning (i.e April 1st, 2018)

20,000

Add: Creditors at the end (i.e March 31st, 2019)

13,000

Add: Advance at the starting (i.e April 1st, 2018)

2,000

Less: Advance at the end (i.e March 31st, 2019)

3,000

Stationery amount to be recorded to Income and Expenditure Account

1,25,000

Question 26

Calculate the amount of sports material to be transferred to income and Expenditure Account of Raman Bhalla Sports Club, Ludhiana, for the year ended 31st March, 2018:

Particulars

(i)

Sports material sold during the year (Book Value ₹ 50,000)

56,000

(ii)

Amount paid to creditors for sports materials

91,000

(iii)

Cash purchase of sports material

40,000

(iv)

Sports material as on 31st March, 2017

50,000

(v)

Sports material as on 31st March, 2018

55,000

(vi)

Creditors for sports material as on 31st March, 2017

37,000

(vii)

Creditors for sports material as on 31st March, 2018

45,000

Solution:

Evaluation of Sports material amount consumed and to be debited to Income & Expenditure A/c

Particulars

Amount Paid to the creditors of Sports Materials

91,000

Less: Creditors of the sports material as on 31st March, 2017

37,000

Closing Stock of Sports Material as on 31st March, 2018

55,000

Sports Material sold during the year

50,000

Add: Creditors of the sports material as on 31st March, 2018

45,000

Cash purchase of Sports Material

40,000

Opening Stock of Sports Material as on 31st March, 2017

50,000

Sports Material consumed during the year to be debited to Income & Expenditure A/c

84,000

Question 27

How are the following dealt with while preparing the final accounts for the year ended 31st , 2019?

Receipt and Payments Account (An Extract)

for the year ended 31st March, 2019

Dr.

Cr.

Receipts

Payments

By Payments for Sports Material

1,40,000

Balance Sheet (as extract) as at 1st April, 2018

Liabilities

Assets

Creditors for Sports Materials

6,000

Sports Materials

8,000

Additional information :

Sports Materials in Hand on 31st March, 2019 – ₹ 22,000.

Solution:

Income and Expenditure Account as on March 31, 2019

Dr.

Cr.

Expenditure

Income

Sports Material

1,40,000

Add: Opening Stock

8,000

Less: Closing Stock

(22,000)

Less: Creditors in the beginning

(6,000)

1,20,000

Balance Sheet as on March 31, 2019

Liabilities

Assets

Stock of Sport Materials

22,000

Alternatively, Sports Material consumed can also be calculated as.

Creditors A/c

Dr.

Cr.

Expenditure

Income

Bank A/c

1,40,000

Balance b/d (Creditors in the beginning)

6,000

(Amount paid for sports materials)

Purchases A/c (Balancing Figure)

1,34,000

1,40,000

1,40,000

Sports Material Consumed = Opening Stock + Purchases – Closing Stock = ₹8,000 + ₹1,34,000 – ₹22,000 = ₹1,20,000

Question 28

How are the following dealt with while preparing the final accounts for the year ended 31st March, 2019?

Receipt and Payments Account (An Extract)

for the year ended 31st March, 2019

Dr.

Cr.

Receipts

Payments

By Payments for Medicines

1,50,000

Additional information :

As at 1st April, 2018

(₹)

As at 31st March, 2019

(₹)

Stock of Medicines

50,000

75,000

Creditors for Medicines

40,000

60,000

Solution:

Income and Expenditure Account as on March 31, 2019

Dr.

Cr.

Expenditure

Income

Medicine

1,50,000

Add: Opening Stock

50,000

Less: Closing Stock

(75,000)

Less: Creditors in the beginning

(40,000)

Add: Creditors at the end

60,000

1,45,000

Balance Sheet as on March 31, 2018

Liabilities

Assets

Creditors for Medicines

40,000

Stock of Medicines

50,000

Balance Sheet as on March 31, 2019

Liabilities

Assets

Creditors for Medicines

60,000

Stock of Medicines

75,000

Question 29

​How are the following dealt with while preparing the final accounts of a sports club for the year ended 31st March, 2019?

Dr.

Cr.

Receipts

Payments

To Sale of Sports Materials

26,000

By Creditors for Sports Materials

61,000

(Book value ₹ 20,000)

By Cash purchase of Sports Materials

10,000

Additional information :

As at 31st March, 2018

(₹)

As at 31st March, 2019

(₹)

Sports Materials

20,000

25,000

Creditors for Sports Materials

7,000

15,000

Solution:

Income and Expenditure Account as on March 31, 2019

Dr.

Cr.

Expenditure

Income

Payment for Sports Material

71,000

Profit on Sale of Sports Material (26,000 – 20,000)

6,000

Add: Opening Stock

20,000

Less: Closing Stock

25,000

Less: Creditors in the beginning

7,000

Add: Creditors at the end

15,000

Less: Book Value of Material Sold

20,000

54,000

Balance Sheet as on March 31, 2018

Liabilities

Assets

Creditors for Sport Materials

7,000

Stock of Sport Materials

20,000

Balance Sheet as on March 31, 2019

Liabilities

Assets

Creditors for Sport Materials

15,000

Stock of Sport Materials

25,000

Question 30

From the following information of a Not-for-Profit Organisation, show the ‘Sports Materials’ item in the Income and Expenditure Account for the year ended 31st March, 2019 and Balance Sheets as at 31st March, 2018 and 31st March, 2019:

Particulars

31st March, 2018

31st March, 2019

Stocks of Sports Materials

Creditors for Sports Materials

CreAdvance to supplies for sports materials

6,200

9,800

11,000

4,800

7,200

19,000

Payment to suppliers for Sports Materials during the year was ​₹ 1,02,000. There were no cash purchases made.

Solution:

Income and Expenditure Account as on March 31, 2019

Dr.

Cr.

Expenditure

Income

Sports Material Consumed

92,800

Balance Sheet as on March 2018

Liabilities

Assets

Sports Materials Creditors

9,800

Sports Materials Stock

6,200

Paid Advance for Sports Materials

11,000

Balance Sheet as on March 2019

Liabilities

Assets

Sports Materials Creditors

7,200

Sports Materials Stock

4,800

Paid Advance for Sports Materials

19,000

Working Notes:

Calculation of Sports Material Consumed

Particulars

Sports Material

1,02,000

Add: Opening Stock

6,200

Less: Closing Stock

4,800

Less: Creditors in the beginning

9,800

Add: Creditors at the end

7,200

Less: Advance at the end

19,000

Add: Advance in the beginning

11,000

92,800

Creditors for Sports Material Account

Dr.

Cr.

Expenditure

Income

Balance b/d (Advance in the beginning)

11,000

Balance b/d (Creditors in the beginning)

9,800

Bank A/c (Amount paid for stationery)

1,02,000

Purchases A/c (Balancing Figure)

91,400

Balance c/d (Creditors at the end)

7,200

Balance c/d (Advance at the end)

19,000

1,20,200

1,20,200

Sports Material Consumed = Opening Stock + Purchases – Closing Stock = ₹6,200 + ₹91,400 – ₹4,800 = ₹ 92,800

Question 31

The book value of furniture on 1st April, 2018 is ₹ 60,000. Half of this furniture is sold for ₹ 20,000 on 30th September, 2018. Depreciation is to be charged on furniture @ 10% p.a.

Calculate loss on sale of furniture. Show how the loss on sale and depreciation on furniture will be shown in the Income and Expenditure Account for the year ended 31st March, 2019.

Solution:

Furniture Account

Dr.

Cr.

Date

Particulars

Date

Particulars

2018

2018

April 1

Balance b/d

September 30

Depreciation A/c Furniture 1 (for 6 Months)

1.500

Furniture 1

30,000

September 30

Bank A/c (Sale) Furniture 1

20,000

Furniture 2

30,000

60,000

September 30

Income and Expenditure (Sale Loss)

8,500

2019

March 31

Depreciation Furniture 2 (for whole year)

3,000

Balance c/d Furniture 2 (30,000 – 3,000)

27,000

60,000

60,000

Income and Expenditure Account as on March 31, 2019

Dr.

Cr.

Expenditure

Income

Depreciation on Furniture

(1,500 + 3,000)

4,500

Loss on Sale of Furniture

8,500

Working Note:

Profit or Loss Evaluation on Furniture Sale

Particulars

Furniture Sold Book Value as on 1st April, 2018

30,000

Less: 6 months Depreciation (3,000 X 10% X 6/12)

1,500

Furniture Book Value as on 30th September, 2018

28,500

Less: Sale Value

20,000

Loss on Furniture Sale

8,500

Question 32

Delhi Youth Club has furniture at a value of ₹ 2,20,000 in its book on 31st March, 2018. It sold old furniture, having a book value of ₹ 20,000 as of 1st April , 2018 at a loss of 20% on 31st December, 2018. Furniture is to be depreciated @ 10% p.a. Furniture costing ₹ 1,50,000 was also purchased on 1st October, 2018.

Prepare Furniture Account for the year ended 31st March, 2019.

Solution:

Furniture Account

Dr.

Cr.

Date

Particulars

Date

Particulars

2018

2018

April 1

To Balance b/d

December 31

Depreciation Furniture II(for 9 Months)

1,500

Furniture I (2,00,000)

December 31

Bank (Sale Furniture II)

14,800

Furniture I I (20,000)

2,20,000

December 31

Income and Expenditure (Loss on Sale)

3,700

October1

To Bank A/c Bank

Furniture I I I

1,50,000

2019

March 31

Depreciation

Furniture I (20,000)

Furniture III (7,500) (6 Months)

27,500

March 31

Balance c/d

Furniture I 1,80,000

Furniture III 1,42,500

3,22,500

3,70,000

3,70,000

Working Note:

Profit or Loss Evaluation on Furniture Sale

Particulars

Furniture I Book Value as on April 1st, 2018

20,000

Less: 9 months Depreciation (20,000 × 10% × 9/12)

(1,500)

Book Value as on 31st December, 2018

18,500

Less: Loss on Sale of Furniture (18,500 × 20%)

(3,700)

Furniture Sale Value

14,800

Question 33

In the year ended 31st March, 2019, salaries paid amounted to ₹ 2,04,000. Ascertain the amount chargeable to the Income and Expenditure Account for the year ended 31st March, 2019 from the following additional information:

Salaries Prepaid on March 31st, 2018

24,000

Salaries Prepaid on March 31st, 2019

12,000

Salaries Outstanding on March 31st, 2018

18,000

Salaries Outstanding on March 31st, 2019

15,000

Solution:

Salaries as on March 31, 2019

Particulars

Salaries paid

2,04,000

Add: Salaries prepaid as on 31st March, 2018

24,000

Less: Salaries Prepaid as on 31st March, 2019

12,000

Less: Salaries Outstanding as on 31st March, 2018

18,000

Add: Salaries Outstanding as on 31st March, 2019

15,000

Chargeable salaries to Income and Expenditure Account

2,13,000

Question 34

How are the following items dealt with while preparing Income and Expenditure Account of a club for the year ended 31st March, 2019?

1st April, 2018

31st March, 2019

Outstanding Locker Rent

₹ 4,600

₹ 6,300

Advance Locker Rent

₹ 3,000

₹ 4,000

Locker Rent received during the year ended 31st March, 2019 – ₹ 52,000.

Solution:

Dr.

Income and Expenditure Account as on 31st March, 2019

Cr.

Expenditure

Income

Locker Rent Received

52,000

Add: Outstanding at the end

6,300

Add: Advance in the beginning

3,000

Less: Outstanding in the beginning

4,600

Less: Advance at the end

4,000

52,700

Question 35

Prepare Income and Expenditure Account for the year ended 31st March, 2019 from the following:

Receipt and Payment Account

for the year ended 31st March, 2019

Dr.

Cr.

Receipts

Payments

To Balance b/d (cash)

1,80,000

By Salaries

4,80,000​

To Subscriptions

9,00,000

By Rent

50,000

To Sale of Investments

2,00,000

By Stationery

20,000

To Sale of Old Furniture (Book Value ₹ 40,000)

30,000

By Defence Bonds

3,00,000

To Donations

10,000

By Furniture

2,00,000

By Bicycles

30,000

By Balance c/d (Cash)

2,40,000

13,20,000

13,20,000

Solution:

Dr.

Income and Expenditure Account as on 31st March, 2019

Cr.

Expenditure

Income

Salaries

4,80,000

Subscriptions

9,00,000

Rent

50,000

Donation

10,000

Stationery

20,000

Loss on Old Furniture Sale

10,000

Surplus (Balancing Figure)

3,50,000

9,10,000

9,10,000

Question 36

Prepare Income and Expenditure Account from the following Receipts and Payments Account of Delhi Nursing Society for the year ended 31st March, 2019:

Receipt and Payment Account

for the year ended 31st March, 2019

Dr.

Cr.

Receipts

Payments

To Balance b/d (Cash at Bank)

2,01,000

By Salaries of Nurses

65,600

To Subscriptions

1,11,500

BY Board, Laundry, and Domestic Help

38,000

To fees from Non-members

27,000

By Rent, Rates, and Taxes

20,000

To Government Grant

1,00,000

By Cost of Car

2,00,000

To Donation for Building Fund

1,56,000

By Expenses of Car

84,000

To Interest

3,800

By Drug and Incidental Expenses

67,000

By Balance c/d (Cash at Bank)

1,24,700

5,99,300

5,99,300

Donation of ₹ 10,000 received for the Building Fund was wrongly included in the Subscriptions Account. A bill of medicines purchased during the year amounted to ​₹12,800 was outstanding. Government Grant is not for a specific purpose.

Solution:

Income and Expenditure Account as on March 31, 2019

Dr.

Cr.

Expenditure

Income

Salaries of Nurses

65,600

Subscriptions

11,1500

Board, Laundry, and Domestic Help

38,000

Less: Donation for Building

(10000)

1,01,500

Rent Rates and Taxes

20,000

Fees from Non-members

27,000

Expenses of Car

84,000

Municipal Grant

1,00,000

Drugs and Incidental Expenses

67,000

Interest

3,800

Add: Outstanding Expenses

12,800

79,800

Deficit (Balancing Figure)

55,100

2,87,400

2,87,400

Question 37

Following is the Receipts and Payments Account of You Bee Forty Club for the year ended 31st March, 2019:

Receipt and Payment A/c as on 31st March, 2019

Dr.

Cr.

Receipts

Payments

To Balance b/d (cash)

1,50,000

By Salaries and Wages

1,60,000

To Subscriptions

By Office Expenses

35,000

2016-2017

60,000

By Sports Equipments

3,40,000

2018-2019

3,50,000

By Telephone Charges

24,000

To Donations

50,000

By Electricity Charges

32,000

To Entrance Fees

80,000

By Travelling Expenses

65,000

By Balance c/d (Cash)

34,000

6,90,000

6,90,000

Additional information :

(a) Outstanding Subscriptions for the year ended 31st March, 2019 – ₹ 55,000.

(b) Outstanding Salaries and Wages – ₹ 40,000.

(c) Depreciate Sports Equipment by 25%.

Prepare Income and Expenditure Account of the Club from the above particulars.

Solution:

Income and Expenditure Account as on March 31, 2019

Dr.

Cr.

Expenditure

Income

Salaries and Wages

1,60,000

Subscriptions

3,50,000

Add: Outstanding

40,000

2,00,000

Add: Outstanding for the year 2018-19

55,000

4,05,000

Office Expenses

35,000

Donations

50,000

Telephone Charges

24,000

Entrance Fees

80,000

Electricity Charges

32,000

Travelling Expenses

65,000

Sports Equipments Depreciation (34,0000 × 25%)

85,000

Surplus (Balancing Figure)

94,000

5,35,000

5,35,000

Question 38

From the following Receipts and Payments Account of Jaipur Sports Club, prepare Income and Expenditure Account for the year ended 31st March, 2019:

Receipt and Payment A/c on 31st March, 2019

Dr.

Cr.

Receipts

Payments

To Balance b/d

2,00,000

By Rent

60,000

To Entrance Fees:

(including ₹15,000 for 2017 – 18)

2017 – 18

10,000

By Insurance Premium

60,000

2018 – 19

50,000

60,000

(including ₹15,000 for 2019 – 20)

To Subscriptions:

By Sports Equipments

50,000

2017 – 18

10,000

By Furniture

60,000

2018 – 19 (90%)

90,000

(Purchased on 31st March, 2019)

2019 – 20

5,000

1,05,000

By 8% Fixed Deposit

1,20,000

To Life Membership Fees

20,000

(Made on 1st October, 2018)

To Donations

1,20,000

By Tournament Expenses

10,000

To Donation for Tournament

50,000

By Books

20,000

To Subscription for Governor’s Party

15,000

By Newspapers

1,000

To Interest on 8% Fixed Deposit

2,400

By Printing and Stationery

19,000

To Sale of Old Newspapers

300

By Balance c/d

1,80,000

To Sale of Old Sports Materials

500

(Book Value ₹ 1,200)

To Locker Rent

6,800

(including ₹ 600 for 2017 – 18)

5,80,000

5,80,000

Solution:

Income and Expenditure Account as on March 31, 2019

Dr.

Cr.

Expenditure

Income

Rent

60,000

Entrance Fees (2018-19)

50,000

Less: For 2017-18

(15,000)

45,000

Subscription 2018-19

90,000

Add: Outstanding for 2018-19 (9,000 × 10/9 )

10,000

1,00,000

Insurance Premium

60,000

Donations

1,20,000

Less: For 2019-20

(15,000)

45,000

Interest on Fixed Deposits

2,400

Printing and Stationery

20,000

Add: Accrued Interest

2,400

4,800

Loss on Sale of Sports Material (1200 -500)

700

Sale of Old Newspapers

300

Surplus (Balancing Figure)

1,70,600

Locker Rent

6,800

Less: For 2017-18

600

6200

2,81,300

2,81,300

Working Notes:

Evaluation of Investment Interest

Interest on Investment for 6 Months (1,20,000 × 8% × 6/12)

4,800

Less: Interest Received₹

2,400

Accrued Interest on Investment

2,400

Question 39

Following is the information given in respect of certain items of a Sports Club. Show these items in the Income and Expenditure Account and the Balance Sheet of the Club as at 31st March, 2019:

Particulars

Sports Fund as on 1st April, 2018

3,50,000

Sports Fund Investments

3,50,000

Interest on Sports Fund Investments

40,000

Donations for Sports Fund

1,50,000

Sports Prizes awarded

1,00,000

Expenses on Sports Events

40,000

General Fund

8,00,000

General Fund Investments

8,00,000

Interest on General Fund Investments

80,000

Solution:

Dr.

Income and Expenditure A/c as on 31st March, 2019

Cr.

Expenditure

Income

By Interest on General Fund Investments

80,000

Dr.

Balance Sheet as on 31st March, 2019

Cr.

Liabilities

Assets

Sports Fund

4,00,000

Sports Fund Investment

3,50,000

General Fund

8,00,000

General Fund Investment

8,00,000

Working Notes:

1)

Calculation of Sports Fund Balance

Sports Fund as on April 1st, 2018

3,50,000

Add: Sports Fund Donations

1,50,000

Sports Fund Investment Interest

40,000

Less: Sports Prizes Awarded

1,00,000

Sports Fund Expenses

40,000

Sports Fund Balance posted as Liabilities on the Balance Sheet as on 31st March, 2019

4,00,000

Question 40

Prepare Income and Expenditure Account from the following particulars of Youth Club for the year ended on 31st March, 2018:

Receipt and Payment A/c on 31st March, 2019

Dr.

Cr.

Receipts

Payments

To Balance b/d (Cash)

32,500

By Salaries

31,500

To Subscription:

By Postage

1,250

2016-17

1,500

By Rent

9,000

2017-18

60,000

By Printing and Stationery

14,000

2018-19

1,800

63,300

By Sports Material

11,500

To Donations (Billiards Table)

90,000

Bu Miscellaneous Expenses

3,100

To Entrance Fees

1,100

By Furniture (1st October, 2017)

20,000

To Sale of Old Magazines

450

By 10% Investment (1st October, 2017)

70,000

By Balance c/d (31st March, 2018)

27,000

1,87,350

1,87,350

Additional Information:

(i) Subscription outstanding as at 31st March, 2018 ₹ 16,200.

(ii) ₹ 1,200 is still in arrears for the year 2016-17 for subscription.

(iii) Value of sports material at the beginning and at the end of the year was ₹ 3,000 and ₹ 4,500 respectively.

(iv) Depreciation to be provided @ 10% p.a. on furniture.

Solution:

In the books of Youth Club

Dr.

Income and Expenditure A/c for the year ended 31st March, 2018

Cr.

Expenditure

Amount

(₹)

Income

Amount

(₹)

To Salaries

31,500

By Subscriptions

60,000

To Postage

1,250

Add: Outstanding Subscriptions (16,200 – 1,200)

15,000

75,000

To Rent

9,000

To Printing and Stationery

14,000

By Entrance fees

1,100

To Consumed Sports Material (WN1)

10,000

By Old Magazines sale

450

To Miscellaneous Expenses

3,100

By Interest Investments

3,500

To Furniture Depreciation (20,000 × 10/100 × 6/12)

1,000

(70,000 × 10/100 × 6/12)

To Surplus

10,200

80,050

80,050

Working Notes:

(i) Sports Material Consumed

=

Opening Stock + Purchases – Closing Stock

=

₹ (3,000 + 11,500 – 4,500) = ₹ 10,000

(ii) Furniture Depreciation 20,000

=

20,000 X \(\frac{6}{12}\) X \(\frac{10}{100}\) = ₹1,000

(iii) Investment Interest

=

70,000 X \(\frac{10}{100}\) X \(\frac{6}{12}\) = 3,500

Question 41

Following is the Receipts and Payments Account of Delhi Football Club for the year ended 31st March, 2019:

RECEIPTS AND PAYMENTS ACCOUNT

for the year ended 31st March, 2019

Dr.

Cr.

Receipts

Payments

To Balance b/d (Cash)

18,000

​By Building

4,00,000

To Donations for Building

4,50,000

By Project Expenses

90,000

To Donations

50,000

(Young Talent Search and Development)

To Government Grant

1,00,000

By Match Expenses

90,000

(Young Talent Search and Development)

By Furniture

1,21,000

To Life Membership Fees

40,000

By 10% Investments

1,60,000

To Match Fund

80,000

(Purchased on 1st July, 2018)

To Subscriptions

52,000

By Salaries

70,000

To Locker Rent

4,000

By Insurance

3,500

To Interest on Investments

10,000

By Sundry Expenses

4,700

To Sale of Furniture

1,00,000

By Closing c/d (Cash)

4,800

(Book value ₹ 80,000)

By Bank (Young Talent

10,000

To Entrance Fees

50,000

Search and Development

9,54,000

9,54,000

Additional Information:

(i) During the year ended 31st March, 2019, the club had 550 members and each paying an annual subscription of ₹ 100.

(ii) Salaries Outstanding as at 1st April, 2018 were ₹ 10,000 and as at 31st March, 2019 were ₹ 5,000.

Prepare Income and Expenditure Account of the Club for the year ended 31st March, 2019.

Solution:

Income and Expenditure Account as on March 31, 2019

Dr.

Cr.

Expenditure

Income

To Salaries

70,000

Subscriptions (550 members × Rs 100 each)

55,000

Add: Outstanding at the end

5,000

Entrance Fees

50,000

Less: Outstanding in the beginning

(10,000)

65,000

To Insurance

3,500

Donations

50,000

To Sundry Expenses

4,700

Locker Rent

4,000

To Match Expenses

90,000

Profit on Furniture Sale (1,00,000 – 80,000)

20,000

Less: Match Fund

(80,000)

10,000

Investment Interest

10,000

Surplus (Balancing Figure)

1,07,800

Add: Interest

2,000

12,000

1,91,000

1,91,000

Working Notes: Evaluation of Investment Interest

Investment Interest for 9 Months (1,60,000 × 10% × 9/12)

12,000

Less: Interest Received

(10,000)

Accrued Interest on Investment

2,000

Question 42

Following is the summary of cash transactions of the Royal Club for the year ended 31st March, 2019:

RECEIPTS AND PAYMENTS ACCOUNT

for the year ended 31st March, 2019

Dr.

Cr.

Receipts

Payments

To Balance b/d

By Rent

16,800

Cash in Hand

10,000

By Wages

24,500

Cash at Bank

21,900

31,900

By Electricity Charges

7,200

To Entrance Fees

25,500

By Honorarium

43,500

To Subscriptions

1,60,000

By Books

21,300

To Donations

16,500

By Office Expenses

45,000

To Life Membership Fees

25,000

By 3% Fixed Deposit

80,000

To Profit on Entertainment

5,600

(1st October, 2018)

By Balance c/d:

24,200

By Balance c/d

2,000

Cash in Hand

2,000

Cash at Bank

24,200

26,200

2,64,500

2,64,500

In the beginning of the year, the club possessed Books of ​₹ 2,00,000 and Furniture of ₹ 85,000. Subscriptions in arrears in the beginning of the year amounted to ₹ 3,500 and at the end of the year ₹ 4,500 and six months Rent was due both in the beginning of the year and at the end of the year.

​Prepare Income and Expenditure Account of the club for the year ended 31st March, 2019 and its Balance Sheet as at that date after writing off ₹ 5,000 and ₹ 11,300 on Furniture and books respectively.

Solution:

Income and Expenditure Account as on March 31, 2019

Dr.

Cr.

Expenditure

Income

Rent

16,800

Entrance Fees

25,500

Less: Outstanding Rent in the beginning (WN1)

8,400

Subscriptions

1,60,000

Add: Outstanding Rent at the end

8,400

16,800

Less: Outstanding in the beginning

3,500

Wages

24,500

Add:Outstanding

4,500

1,61,000

Lighting Charge

7,200

Donations

16,500

Lecturer’s Fee

43,500

Profit on Entertainment

5,600

Office Expenses

45,000

Interest Accrued on Fixed Deposits

1,200

Depreciation on:

(80,000 × 3% × 6/12)

Books

11,300

Furniture

5,000

16,300

Surplus (Balancing Figure)

56,500

2,09,800

2,09,800

Balance Sheet as on 31st March, 2018

Liabilities

Assets

Outstanding Rent

6,000

Books

2,00,000

Capital Fund (Balancing Fig.)

3,14,400

Furniture

85,000

Subscriptions Outstanding

3,500

Cash and Bank

31,900

3,20,400

3,20,400

Balance Sheet

as on 31st March 2019

Liabilities

Assets

Rent Outstanding

6,000

Subscriptions Outstanding

4,500

Capital Fund

3,14,400

Books

2,00,000

Add : Life Membership Fees

25,000

Add : Purchases

21,300

Add : Surplus

56,500

3,95,900

Less : Deprecation

(11,300)

2,10,000

Furniture

85000

Less : Depreciation

(5,000)

80,000

Fixed Deposits

80,000

Add : Interest

1,200

81,200

Cash at Bank

24,200

Cash in hand

2,000

4,01,900

4,01,900

Question 43

From the following Receipts and Payments Account of Social Club and the information supplied, prepare Income and Expenditure Account for the year ended 31st March, 2019 and Balance Sheet as at that date:

RECEIPTS AND PAYMENTS ACCOUNT

for the year ended 31st March ,2019

Dr.

Cr.

Receipts

(₹)

Payments

(₹)

To Balance b/d

7,000

By Salaries

28,000

To Subscriptions:

By General Expenses

6,000

2017-18

5,000

By Electricity Charges

4,000

2018-19

20,000

By Books

10,000

2019-20

4,000

29,000

By Newspapers

8,000

To Hire of Ground

14,000

By Balance c/d

4,000

To Surplus from Entertainment Events

8,000

To Sale of Old Newspapers

2,000

60,000

60,000

(a) The club has 50 members each paying an annual subscription of ₹ 500. Subscriptions Outstanding on 31st March,2018 were ₹ 6,000.

(b) On 31st March, 2019, Salaries Outstanding amounted to ₹ 2,000. Salaries paid in the year ended 31st March, 2019 included ₹ 6,000 for the year ended 31st March, 2018.

(c) On 1st April, 2018, the club owned Building valued at ₹ 2,00,000; Furniture ₹ 20,000 and Books ₹ 20,000.

(d) Provide depreciation on Furniture at 10%.

Solution:

Income and Expenditure Account as on March 31, 2019

Dr.

Cr.

Expenditure

Income

Salaries

28,000

Subscription (50 members × ₹ 500 each)

25,000

Add: Outstanding for 2018-19

2,000

Received Rent from the use of hall

14,000

Less: Outstanding for 2017-18

6,000

24,000

Entertainment Profit

8,000

General Expenses

6,000

Sale of Old Newspapers

2,000

Electricity Charges

4,000

Newspapers

8,000

Depreciation on Furniture (2,000 × 10%)

2,000

Surplus (Balancing Figure)

5,000

49,000

49,000

Balance Sheet as on April 01, 2018

Liabilities

Assets

Salaries Outstanding

6,000

Subscriptions Outstanding

6,000

Capital Fund

2,47,000

Building

2,00,000

(Balancing Figure)

Furniture

20,000

Books

20,000

Cash and Bank

7,000

2,53,000

2,53,000

Balance Sheet as on April 01, 2019

Liabilities

Assets

Advance Subscription

4,000

Outstanding Subscription

Outstanding Salaries

2,000

For the year 2018-19 (25,000 – 20,000)

5,000

Capital Fund

2,47,000

For the year 2017-18 (6,000 – 5,000)

1,000

6,000

Add: Surplus

5,000

2,52,000

Building

2,00,000

Furniture

20,000

Less: 10% Depreciation

2,000

18000

Books

20,000

Add: Purchases

10,000

30,000

Cash and Bank

4,000

2,58,000

2,58,000

Question 44

From the following Receipts and Payments Account and additional information given below, prepare Income and Expenditure Account and Balance Sheet of Rural Literacy Society as on 31st March, 2019:

RECEIPTS AND PAYMENTS ACCOUNT

for the year ended 31 st March, 2019

Dr.

Cr.

Receipts

Payments

To Balance b/d:

By General Expenses

32,000

Cash in Hand

40,000

By Newspaper

18,500

Cash at Bank

1,55,500

By Electricity

30,000

To Subscriptions:

By Fixed Deposit with Bank

1,80,000

2017-18

12,000

(On 30th September, 2018 @ 10% p.a.)

2018-19

2,65,000

By Books

70,000

2019-20

5,000

2,82,000

By Salary

36,000

To Legacy

12,500

By Rent

65,000

To Government Grant

1,20,000

By Postage Charges

3,000

To Sale of Old Furniture

37,000

By Furniture (purchased)

1,05,000

(Book value ₹ 50,000)

By Balance c/d:

To Interest received on Fixed Deposit

4,500

Cash in Hand

30,000

Cash at Bank

82,000

6,51,500

6,51,500

Additional information:

(i) Subscription outstanding as on 31st March, 2018 ₹ 20,000 and on 31st March, 2019 ₹ 15,000.

(ii) On 31st March, 2019, salary outstanding ₹ 6,000 and one month rent paid in advance.

(iii) On 1st April, 2018, society owned furniture ₹ 1,20,000 and books ₹ 50,000.

Solution:

Income and Expenditure Account as on March 31, 2019

Dr.

Cr.

Expenditure

Income

General Expenses

32,000

Subscriptions

2,65,000

Newspaper

18,500

Add: Current O/s

7,000

2,72,000

Electricity

30,000

Old NewsPaper Sale

12,500

Salary

36,000

Grant from Government

1,20,000

Add: Outstanding

6,000

42,000

Interest on Fixed Deposit

9,000

Rent

65,000

(18,000 for 6 months @ 10%)

Less: Prepaid

5,000

60,000

Postage Charges

3,000

Loss on Sale of Furniture

13,000

Surplus

2,15,000

4,13,500

4,13,500

Balance Sheet as on March 31, 2019

Liabilities

Assets

Capital Fund

Books

50,000

Opening Balance

3,85,500

Add: Purchases

70,000

1,20,000

Add: Surplus

2,15,000

6,00,500

Rent Prepaid

5,000

Salary Outstanding

6,000

Furniture

1,20,000

Received Subscription in Advance

5,000

Add: Purchases

1,05,000

Less: Sale

50,000

1,75,000

Fixed Deposit

1,80,000

Add: Interest

4,500

1,84,500

Subscriptions Outstanding

15,000

Cash

30,000

Bank

82,000

6,11,500

6,11,500

Working Notes 1: Ascertainment of Capital Fund

Balance Sheet as on March 31, 2018

Liabilities

Assets

Capital Fund

3,85,500

Outstanding Subscriptions

20,000

Books

50,000

Furniture

1,20,000

Cash

40,000

Bank

1,55,500

3,85,500

3,85,500

Question 45

Glaxo Club’s Balance Sheet as at 1st April, 2018 was as under:

Liabilities

(₹)

Assets

(₹)

Capital Fund

2,00,000

Sports Equipments

50,000

Tournament Fund

60,000

Grounds

1,20,000

Subscriptions in Advance

6,000

Billiards Tables

60,000

Salaries Unpaid

11,000

Subscriptions Outstanding

8,000

Cash and Bank Balances

39,000

2,77,000

2,77,000

Receipts and Payments Account for the year ended 31st March, 2019 was:

RECEIPTS AND PAYMENTS ACCOUNT

for the year ended 31st March, 2019

Dr.

Cr.

Receipts

(₹)

Payments

(₹)

To Opening Balance

39,000

By Wages and Salaries

60,000

To Subscriptions

1,81,000

By Upkeep of Grounds

10,000

To Sale of Old Materials

1,500

By Stationery

15,000

To Sale of Sports Equipment

6,000

By Audit Fee

2,000

(Book value ₹ 10,000)

By Expenses on Tournament

65,000

To Entrance Fees

2,000

By Sports Equipments

20,000

To Life Membership Fees

50,000

By 5% Investments

40,000

To Donations for Tournament

20,000

(On 1st October, 2018)

By Cash and Bank Balances

87,500

2,99,500

2,99,500

Subscriptions still to be received are ₹ 5,500 but subscriptions already received include ₹ 4,000 for next year. Salaries still unpaid are ₹ 6,000. Sports Equipments are now valued at ₹ 45,000. Prepare Income and Expenditure Account and the Balance Sheet, after charging 10% depreciation on Billiards Tables.

Answer:

Dr.

Income and Expenditure A/c as on 31st March, 2019

Cr.

Expenditure

Income

To Loss on Sale of Sports Equipment

4,000

By Subscriptions

1,81,000

To Sports Equipments used (WN1)

15,000

Add: Advance Subscriptions (Prev. Year)

6,000

To Wages and Salaries [60,000 – 5,000 (Prev. Year)]

55,000

Less: Advance Subscriptions (Next Year)

4,000

To Upkeep of Ground

10,000

Subscriptions Received (Prev. Year)

2,500

1,80,500

To Stationery

15,000

By Sale of Old Materials

1,500

To Audit Fees

2,000

By Entrance Fees

2,000

To Depreciation on Billiards Table (60,000 × 10/100)

6,000

By Interest Accrued on 5% Investments

1,000

To Surplus

78,000

(40,000 × 5/100 × 6/12)

1,85,000

1,85,000

Working Notes:

Sports Material Consumed

=

Opening Stock + Purchases – Closing Stock – Sales

=

₹ (50,000 + 20,000 – 45,000 – 10,000) = ₹ 15,000

Balance Sheet of Glaxo Club as at 31st March, 2019

Liabilities

Assets

Capital Fund

2,00,000

Sports Equipment

45,000

Add: Life Membership fee

50,000

Grounds

1,20,000

Add: Surplus

78,000

3,28,000

Billiards Table

60,000

Less: Depreciation

6,000

54,000

Tournament Fund

60,000

Add: Donations

20,000

Investments 5%

40,000

Less: Tournament Expenses

65,000

15,000

Investments Interest

1,000

Outstanding Subscriptions

5,500

Advance Subscriptions Received

4,000

Cash and Bank Balances

87,500

Unpaid Salaries

6,000

3,53,000

3,53,000

Question 46

From the following Receipts and Payments Account and additional information relating to the star Cricket Club, prepare Income and Expenditure Account for the year ended 31st March, 2019 and Balance Sheet as at that date:

RECEIPTS AND PAYMENTS ACCOUNT

Dr.

Cr.

Receipts

(₹)

Payments

(₹)

To Balance b/d:

By Upkeep of Fields

20,000

Cash in Hand 1st April, 2018

10,000

By Tournament Expenses

7,000

Cash at Bank as per Pass Book

20,000

30,000

By Rates and Insurance

2,000

To Members’ Subscriptions

50,000

By Telephone

500

To Admission Fee

3,000

By Stationery

1,000

To Sale of Old Bats, etc.

500

By General Charges

500

To Hire of Ground

3,000

By Secretary’s Honorarium

2,000

To Subscriptions for Tournament

10,000

By Bats, Balls, etc.

7,000

To Donations

75,000

By Balance c/d:

To Legacy Donations

25,000

Cash in Hand 31st March, 2019

1,00,000

Cash at Bank as per Pass Book

56,500

1,56,500

1,96,500

1,96,500

Assets on 1st April, 2018:

Stock of Bats and Balls

15,000

Stationery

2,000

Subscriptions Due

5,000

Subscriptions due on 31st March, 2019 amounted to ₹ 7,500. Write off 50% of Bats, Balls (not considering sale) and 25% of Stationery.

Solution

Dr.

Income and Expenditure A/c for the year ended 31st March, 2019

Cr.

Expenditure

Income

To Upkeep of fields

20,000

By Member’s Subscriptions

50,000

To Rates and Insurance

2,000

Add: Outstanding Subscriptions (7,500 – 5,000)

2,500

52,500

To Telephone

500

By Admission fee

3,000

To General Charges

500

By Donations

75,000

To Secretary’s Honorarium

2,000

By Legacy Donations

25,000

To Bats and Balls written off (WN1)

11,000

By Hire of Ground

3,000

To Stationery written off (WN2)

750

By Sale of Old bats, etc.

500

To Surplus

1,22,250

1,59,000

1,59,000

Working Note

1) Bats and Balls Amount

=

Opening Stock + Purchases

=

₹ (15,000 + 7,000) = ₹ 22,000

Bats and Balls written off

=

₹ (22,000×50/100) = ₹ 11,000

2) Stationery Amount

=

Opening Stock + Purchases

=

₹(2,000 + 1,000)= ₹3,000

Stationery written off

=

₹(3,000×25/100)= ₹750

3)

Balance Sheet as on 1st April, 2018

Liabilities

Assets

Capital Fund (Balancing Figure)

52,000

Bats and Balls

15,000

Stationery

2,000

Subscriptions due

5,000

Cash in Hand

10,000

Cash at Bank

20,000

52,000

52,000

Balance Sheet as on 31st March, 2019

Liabilities

Assets

Capital Fund (WN3)

52,000

Bats and Balls stock

15,000

Add: Surplus

1,22,250

1,74,250

Add: Purchases

7,000

Less: Written off

11,000

11,000

Tournament Subscriptions

10,000

Less: Expenses of Tournament

7,000

3,000

Stationery

2,000

Add: Purchases

1,000

Less: Written off

750

2,250

Outstanding Subscriptions

7,500

Cash in Hand

1,00,000

Cash at Bank

56,500

1,77,250

1,77,250

Question 47

From the following Receipts and Payments Account of Mumbai Theatre Club, prepare Income and Expenditure Account for the year ended 31st March, 2019 and Balance Sheet as at that date:

RECEIPTS AND PAYMENTS ACCOUNT

Dr.

Cr.

Receipts

(₹)

Payments

(₹)

To Balance b/d:

By Salary

20,000

Cash and Bank

1,40,000

By Repair Expenses

5,000

To Donations

50,000

By Furniture

60,000

To Subscriptions

1,20,000

By Miscellaneous Expenses

5,000

To Entrance Fees

10,000

By Investments

60,000

To Interest on Investments

1,000

By Insurance Premium

2,000

To Interest Received from Bank

4,000

By Billiard Table

80,000

To Sale of Old Newspapers

1,500

By Paper, lnk, etc.

1,500

To Sale of Drama Tickets

10,500

By Drama Expenses

5,000

By Balance c/d:

Cash and Bank

98,500

3,37,000

3,37,000

Additional Information:

(i) Subscriptions in arrear for the year ended 31st March, 2019 ₹ 9,000 and subscriptions in advance for the year ending 31st March, 2020 ₹ 3,500.

(ii) Insurance Premium outstanding ₹ 400.

(iii) Miscellaneous expenses prepaid ₹ 900.

(iv) 8% interest has accrued on investment for five months.

(v) Billiard Table costing ₹ 3,00,000 was purchased during last year and ₹ 2,20,000 were paid for it.

Solution:

Dr.

Income and Expenditure A/c fas on 31st March, 2019

Cr.

Expenditure

Income

To Salary

20,000

By Donations

50,000

To Repair Expenses

5,000

By Subscriptions

1,20,000

To Miscellaneous Expenses

5,000

Add: Subscriptions Outstanding

9,000

Less: Prepaid Expenses

900

4,100

Less: Advance Subscriptions

3,500

1,25,500

To Insurance Premium

2,000

By Entrance Fees

10,000

Add: Outstanding Premium

400

2,400

By Interest on Investments

1,000

To Paper, Ink, etc.

1,500

Add: Accrued Interest (WN1)

2,000

3,000

To Drama Expenses

5,000

By Interest received from Bank

4,000

To Surplus- Excess of Income over Expenditure

1,66,500

By Sale of Old Newspapers

1,500

By Sale of Drama Tickets

10,500

2,04,500

2,04,500

Working Notes 1:

5 months Interest on Investments

=

₹ (60,000 × 8/100 × 5/12)

=

₹ 2,000

Working Notes 2:

Balance Sheet as on 1st April, 2018

Liabilities

Assets

Capital Fund (Balancing Figure)

3,60,000

Billiard Table

3,00,000

Cash and Bank

1,40,000

Billiard Table Creditors

80,000

4,40,000

4,40,000

Balance Sheet as on 31st March, 2019

Liabilities

Assets

Capital Fund (WN2)

3,60,000

Furniture

60,000

Add: Surplus

1,66,500

5,26,500

Investments

60,000

Billiard Table

3,00,000

Insurance Premium

Outstanding

400

Prepaid Miscellaneous Expenses

900

Advance Subscriptions

3,500

Investments Interest

2,000

Subscriptions Outstanding

9,000

Cash and Bank

98,500

5,30,400

5,30,400

Question 48

Following Receipts and Payments Account was prepared from the Cash Book of Delhi Charitable Trust for the year ending 31st March, 2019:

Receipt and Payment A/c as on 31st March, 2019

Dr.

Cr.

Receipts

Payments

To Balance b/d:

By Charity

1,15,000

Cash in Hand

1,15,000

By Rent and Taxes

32,000

Cash at Bank

1,26,000

By Salary

60,000

To Donations

90,000

By Printing

6,000

To Subscriptions

4,28,000

By Postage

3,000

To Legacies Donations

1,80,000

By Advertisements

45,000

To Interest on Investment

45,000

By Insurance

20,000

To Sale of old Newspaper

2,000

By Furniture

2,16,000

By Investment

2,30,000

By Balance c/d:

Cash in Hand

99,000

Cash at Bank

1,60,000

9,86,000

9,86,000

Prepare Income and Expenditure Account for the year ended 31st March, 2019, and Balance Sheet as on that date after the following adjustments:

(i) Insurance premium was paid for insurance taken w.e.f. 1st July, 2018.

(ii) Interest on investment ₹ 11,000 accrued was not received.

(iii) Rent ₹ 6,000; Salary ₹ 9,000 and advertisement expenses ₹ 10,000 outstanding as on 31st March, 2019.

(iv) Legacy Donation is towards construction of Library Block.

Solution:

Income and Expenditure Account as on March 31st, 2019

Dr.

Cr.

Expenditure

Income

Charity

1,15,000

Donation

90,000

Rent

32,000

Subscription

4,28,000

Add: Outstanding

6,000

38,000

Interest on Investments (45,000 + 11,000)

56,000

Salary

60,000

Sale of Old Newspapers

2,000

Add: Outstanding

9,000

69,000

Advertisement

45,000

Add: Outstanding

10,000

55,000

Insurance

20,000

Less: Prepaid

5,000

15,000

Printing

6,000

Postage

3,000

Surplus

2,75,000

5,76,000

5,76,000

Balance Sheet as on March 31, 2019

Liabilities

Assets

Capital Fund

Cash

99,000

Opening Balance

2,41,000

Bank

1,60,000

Add: Legacy

1,80,000

Insurance Prepaid

5,000

Add: Surplus

2,75,000

6,96,000

Furniture

2,16,000

Rent Outstanding

6,000

Investment

2,30,000

Add: Interest

11,000

2,41,000

7,21,000

7,21,000

Working Notes 1: Ascertainment of Capital Fund

Balance Sheet as on March 31, 2018

Liabilities

Assets

Capital Fund

2,41,000

Cash

1,15,000

Banks

1,26,000

2,41,000

2,41,000

Question 49

Given Below is the Receipts and Payments Account of a Mayur Club for the year ended 31st March, 2019:

Receipt and Payment A/c

Dr.

Cr.

Receipts

Payments

To Balance b/d

1,02,500

By Salaries

60,000

To Subscriptions:

By Expenses

7,500

2017-18

4,000

By Drama Expenses

45,000

2018-19

2,05,000

By Newspapers

15,000

2019-20

6,000

2,15,000

By Municipal Taxes

4,000

To Donations

54,000

By Charity

35,000

To Proceeds of Drama Tickets

95,000

By Investments

2,00,000

To Sale of Waste Paper

4,500

By Electricity Charges

14,500

By Balance c/d

90,000

4,71,000

4,71,000

Prepare club’s Income and Expenditure Account for the year ended 31st March, 2019 and Balance Sheet as at that date after taking the following information into account:

(i) There are 500 members, each paying an annual subscription of ₹ 500, ₹​ 5,000 are still in arrears for the year ended 31st March, 2018.

(ii) Municipal Taxes amounted to ₹​ 4,000 per year is paid up to 30th June and ₹ ​5,000 are outstanding of salaries.

(iii) Building stands in the books at ₹​ 5,00,000.

(iv) 6% interest has accrued on investments for five months.

Solution:

Income and Expenditure Account as on March 31, 2019

Dr.

Cr.

Expenditure

Income

Municipal Taxes

4,000

Subscription (500 members × Rs 500)

2,50,000

Add: Prepaid in 2017-18

1,000

Interest Accrued on Investment

(2,00,000 X \(\frac{6}{100}\) X \(\frac{5}{12}\))

5,000

Less: Prepaid in 2018-19

1,000

4,000

Profit from Drama:

Salaries

60,000

Proceeds

95,000

Add: Outstanding

5,000

65,000

Less: Drama Expenses

45,000

50,000

Expenses

7,500

Sale of Waste Paper

4,500

Newspapers

15,000

Donations

54,000

Charity

35,000

Electricity Charges

14,500

Surplus (Balancing Figure)

2,22,500

3,63,500

3,63,500

Balance Sheet as on April 01, 2018

Liabilities

Assets

Subscriptions Outstanding (4,000 + 5,000)

9,000

Capital Fund (Balancing Figure)

6,12,500

Municipal Taxes Prepaid

1,000

Building

5,00,000

Cash and Bank

1,02,500

6,12,500

6,12,500

Balance Sheet as on April 01, 2018

Liabilities

Assets

Subscription Advance

6,000

Outstanding Subscriptions

Outstanding Salaries

5,000

For 2018-19 (2,50,000 – 2,05,000)

45,000

For 2017-18

5,000

50,000

Capital Fund

6,12,500

Prepaid Municipal Taxes

1,000

Add: Surplus

2,22,500

8,35,000

Building

5,00,000

Investments

2,00,000

Add: Accrued Interest

5,000

2,05,000

Cash at Bank

90,000

8,46,000

8,46,000

Question 50

From the following Receipts and Payments Account of Kapil Dev Club and from the given additional information, prepare Income and Expenditure Account for the year ending 31st December, 2019 and the Balance Sheet as at that date:

Receipt and Payment A/c as on 31st March, 2019

Dr.

Cr.

Receipts

Payments

To Balance b/d

1,90,000

By Salaries

3,30,000

To Subscriptions

6,60,000

By Sports Material

4,00,000

Investment Interest

40,000

By Balance c/d

1,60,000

@ 8% p.a. for full year

8,90,000

8,90,000

Additional Information:

(i) The club had received ₹ 20,000 for subscription in 2017-18 for 2018-19.

(ii) Salaries had been paid only for 11 months.

(iii) Stock of sports materials on 31st March, 2018 was ₹ 3,00,000 and on 31st March, 2019 ₹ 6,50,000.

Solution:

Income and Expenditure Account as on 31st March,2019

Dr.

Cr.

Expenditure

Income

Salary

3,30,000

Subscription

6,60,000

Add: Outstanding Salaries (WN3)

30,000

3,60,000

Add: Advance in the beginning

20,000

6,80,000

Sports Materials Consumed

50,000

Investments Interest

40,000

Surplus

3,10,000

7,20,000

7,20,000

Balance Sheet as on 31st March,2019

Liabilities

Assets

Outstanding Salaries

30,000

Investments (WN4)

5,00,000

Capital Fund

9,70,000

Stock of Sports Material

6,50,000

Add: Surplus

3,10,000

12,80,000

Cash

1,60,000

13,10,000

13,10,000

Working Notes 1: Sports Material Consumed Evaluation

Particulars

Sports Material Purchased

4,00,000

Add: Opening Stock of Sports Material

3,00,000

Less: Closing Stock of Sports Material

6,50,000

Sports Material Consumed

50,000

Working Notes 2: Capital Fund Evaluation

Balance Sheet as on April 01,2018

Liabilities

Assets

Subscription Received in Advance

20,0000

Investments

5,00,000

Capital Fund (Balancing Figure)

9,70,000

Stock of Sports Material

3,00,000

Cash

1,90,000

9,90,000

9,90,000

Working Notes 3: Outstanding Salaries Evaluation

Outstanding Salaries = 3,30,000 X \(\frac{1}{11}\) = ₹ 30,000

Working Notes 3: Investments Evaluation

Investments = 40,000× \(\frac{100}{8}\) = ₹ 5,00,000

Question 51

From the following information and Receipts and Payments Account of Delhi Medical Society, prepare Income and Expenditure Account for the year ended 31st March, 2019 and Balance Sheet as at that date.

Receipt and Payment A/c as on 31st March, 2019

Dr.

Cr.

Receipts

Payments

To Balance b/d

31,900

​By Rent

16,800

To Entrance Fees

5,500

By Wages

24,500

To Subscriptions

1,80,000

By Lighting Charges

7,200

To Donations

16,500

By Books

24,800

To Life Membership Fees

25,000

By Medicines

1,00,000

To Government Grant

2,00,000

By Doctors Salaries

80,000

To Proceeds of Seminar

23,200

By Office Expenses

45,000

To Interest on Deposits

2,400

By 8% Fixed Deposits

1,20,000

(On 1st October, 2018)

By Seminar Expenses

20,200

By Cash in Hand

26,000

By Bank A/c

20,000

4,84,500

4,84,500

Other information:

On 31st March, 2018, the Club possessed books of ​₹ 2,00,000 and Furniture of ₹ 85,000. Provide depreciation on these assets @ 10% including the purchases during the year.

Subscriptions in arrears in the beginning of the year amounted to ₹ 3,500 and at the end of the year ₹ 5,500 were outstanding.

​The Club paid three months’ rent in advance both in the beginning and at the end of the year.

Solution:

Income and Expenditure Account as on March 31, 2019

Dr.

Cr.

Expenditure

Income

Rent

16,800

Entrance Fees

5,500

Add: Advance in the beginning

4,200

Subscriptions

1,80,000

Less: Advanced at the end

(4,200)

16,800

Add: Arrears at the end

5,500

Wages

24,500

Less: Arrears in the beginning

(3,500)

1,82,000

Lighting Charges

7,200

Donations

16,500

Office Expenses

45,000

Deposits Interest

2,400

Depreciation on:

Add: Interest

2,400

4,800

Furniture

8,500

Profit from Seminar:

Books

22,480

30,980

Proceeds

23,200

Surplus (Balancing Figure)

87,320

Less: Expenses

(20,200)

3,000

2,11,800

2,11,800

Balance Sheet as on April 01, 2018

Liabilities

Assets

Advance Rent

4,200

Subscription-in-Arrears

3,500

Books

2,00,000

Capital Fund (Balancing Figure)

3,24,600

Furniture

85,000

Cash in Hand

31,900

3,24,600

3,24,600

Balance Sheet as on April 01, 2018

Liabilities

Assets

Subscription-in-Arrears

5,500

Advance Rent

4,200

Books

2,00,000

Government Grant

2,00,000

Add: Purchase

24,800

Less: Medicines

1,00,000

2,24,800

Less: Salaries

80,000

20,000

Less: Depreciation @ 10%

(22,480)

2,02,320

Capital Fund

3,24,600

Furniture

85,000

Add: Surplus

87,320

Less: 10% Depreciation

8,500

76,500

Add: Life Membership

25,000

4,36,920

Cash in Hand

26,000

Cash at Bank

20,000

Fixed Deposit @ 8%

1,20,000

Add: Interest on deposit

2,400

1,22,400

4,56,920

4,56,920

Working Note: Fixed Deposits Interest Evaluation

Interest on Fixed Deposits (1,20,000 × 8% × \(\frac{6}{12}\))

4,800

Less: Received Interest

(2,400)

Interest on Fixed Deposits

2,400

Question 52

Receipts and Payments Account of Shankar Sports Club is given below for the year ended 31st March, 2019:

Receipt and payment A/c as on 31st March, 2019

Dr.

Cr.

Receipts

Payments

To Cash in Hand (Opening)

2,600

By Rent

18,000

To Entrance Fee

3,200

By Wages

7,000

To Donation for Building

23,000

By Billiard Table

14,000

To Locker Rent

1,200

By Furniture

10,000

To Life Membership Fee

7,000

By Interest

2,000

To Profit from Entertainment

3,000

By Postage

1,000

To Subscription

40,000

By Salary

24,000

By Cash In Hand (Closing)

4,000

80,000

80,000

Prepare Income and Expenditure Account and Balance Sheet with the help of following information:

Subscription outstanding on 31st March, 2018 is ₹ 1,200 and ₹ 2,300 on 31st March, 2019; opening stock of postage stamps is ₹ 300 and closing stock is ₹ 200; Rent ₹ 1,500 related to the year ended 31st March, 2018 and ₹ 1,500 is still unpaid. On 1st April, 2018 the club owned furniture ₹ 15,000, Furniture valued at ₹ 22,500 on 31st March, 2019. The club has a loan of ₹ 20,000 (@ 10% p.a.) which was taken, in the year ended 31st March, 2018.

Solution:

Dr.

Income and Expenditure A/c as on 31st March, 2019

Cr.

Expenditure

Amount

(₹)

Income

Amount

(₹)

To Rent

18,000

By Entrance Fess

3,200

To Wages

7,000

By Locker Rent

1,200

To Interest

2,000

By Profit from Entertainment

3,000

To Postage Consumed (WN1)

1,100

By Subscriptions

40,000

To Depreciation on Furniture (WN2)

2,500

Less: Outstanding Sub. (31st March, 2018)

1,200

To Salary

24,000

Add: Outstanding Sub. (31st March, 2019)

2,300

41,100

By Deficit- Excess of Expenditure over Income

6,100

54,600

54,600

Working Notes :

1. Postage Consumed

=

Opening Stock + Purchases – Closing Stock – Sales

=

₹ (300 + 1,000 – 200) = ₹ 1,100

2. Depreciation on Furniture

=

Opening Value + Purchases – Closing Value

=

₹ (15,000 + 10,000 – 22,500) = ₹ 2,500

3.

Balance Sheet of Shankar Sports Club as at 1st April, 2018

Liabilities

Assets

Loan @ 10% p.a.

20,000

Furniture

15,000

Outstanding Rent

1,500

Postage

300

Outstanding Subscriptions

1,200

Cash in Hand

2,600

Capital Fund Deficit (Balancing Figure)

2,400

21,500

21,500

Balance Sheet of Shankar Sports Club as at 1st April, 2019

Liabilities

Assets

Loan @10% p.a.

20,000

Capital Fund Deficit

2,400

Donation for Building

23,000

Add: Deficit

6,100

8,500

Rent Outstanding

1,500

Furniture

22,500

Fees for Life Membership

7,000

Billiard Table

14,000

Postage

200

Outstanding Subscriptions

2,300

Cash in Hand

4,000

Furniture

22,500

51,500

51,500

Question 53

From the following particulars relating to the Ramakrishna Mission Charitable Hospital, prepare Income and Expenditure Account for the year ended 31st March, 2019 and Balance Sheet as at that date.

Receipt and Payment A/c as on 31st March, 2019

Dr.

Cr.

Receipts

Payments

To Cash in Hand on 1st April, 2018

71,300

By Medicines

​3,05,900

To Subscriptions

4,79,960

By Doctor’s Honorarium

90,000

To Donations

1,45,000

By Salaries

2,75,000

To Interest Investment @ 7%

70,000

By Petty Expenses

4,610

To Proceeds from Charity Show

1,04,500

By Equipments

1,50,000

By Expenses on Charity Show

7,500

By Cash in Hand on 31st March, 2018

37,750

8,70,760

8,70,760

Additional Information:

As at 1st April, 2018

(₹)

As at 31st March, 2019

(₹)

Subscriptions Due

2,400

2,800

Subscriptions Received in Advance

640

1,000

Stock of Medicines

88,100

97,400

Estimated value of Equipments

2,12,000

3,16,000

Building (cost less depreciation)

4,00,000

3,80,000

Solution:

Income and Expenditure Account as on March 31, 2019

Dr.

Cr.

Expenditure

Income

Medicine

30,590

Subscription

47,996

Add: Opening Stock

8,810

Add: Due for 2018-19

280

Less: Closing Stock

(9,740)

29,660

Less: Due for 2017-18

(240)

Doctor’s Honorarium

9,000

Less: Advance for 2019-20

(100)

Salaries

27,500

Add: Advance for 2018-19

64

48,000

Petty Expenses

461

Donations

14,500

Charity Show Expenses

750

Investments Interest

7,000

Equipments Depreciation

4,600

Proceeds from Charity Show

10,450

Building Depreciation

2,000

Surplus (Balancing Figure)

5,979

79,950

79,950

Balance Sheet as on April 01, 2018

Liabilities

Assets

Subscription Advance

64

Due Subscription

240

Capital Fund (Balancing Figure)

1,77,316

Medicines Stock

8,810

Equipments

21,200

Building

40,000

Cash in Hand

7,130

Investments

1,00,000

1,77,380

1,77,380

Balance Sheet as on April 01, 2019

Liabilities

Assets

Advance Subscription

100

Subscription Due

280

Capital Fund

1,77,316

Medicines Stock

9,740

Add: Surplus

5,979

1,83,295

Equipments

21,200

Add: Purchases

15,000

36,200

Less: Depreciation

(4,600)

31,600

Building

40,000

Less: Depreciation

(2,000)

38,000

Cash in Hand

3,775

Investments @ 7%

1,00,000

1,83,395

1,83,395

Working Note: Investment Evaluation

= Interest X \(\frac{100}{Rate of Return}\)

= 7,000 X \(\frac{100}{7}\) = ₹ 1,00,000

Question 54

Following is the Receipt and Payment Account of Women’s Welfare Club for the year ended 31st March, 2019:

Receipt and Payment A/c as on 31st March, 2019

Dr.

Cr.

Receipts

Payments

To Cash in Hand

22,500

Salary

1,25,000

To Cash at Bank

50,000

By Stationery

17,000

To Subscriptions

8,17,500

By Electric Charges

95,500

To Donations

30,000

By Insurance

75,000

To Government Grant

1,50,000

By Equipments

3,00,000

To Sale of Newspapers

3,000

By Petty Expenses

5,000

To Proceeds of Charity Show

1,65,000

By Expenses on Charity Show

1,29,000

To Interest Investments @ 10%

70,000

By Newspapers

10,000

To Income Sundries

4,000

By Lectures Fee

1,65,000

By Honorarium to secretary

1,20,000

By Cash in Hand

20,500

By Cash at Bank

2,50,000

13,12,000

13,12,000

Additional Information:

Particulars

1st April, 2018

(₹)

31st March, 2019

(₹)

Outstanding Salaries

12,000

18,000

Insurance Prepaid

7,000

3,000

Subscription Outstanding

37,500

25,000

Subscription received in advance

17,500

10,000

Electricity Charges outstanding

12,500

Stock of Stationery

22,500

7,000

Equipments

2,56,000

5,02,000

Building

12,00,000

11,40,000

Prepare Income and Expenditure Account for the year ended 31st March, 2019,and Balance Sheet as on that date.

Solution:

Income and Expenditure Account as on March 31, 2019

Dr.

Cr.

Expenditure

Income

Stationery

32,500

Donation

30,000

Electricity Charges

95,500

Government Grant

1,50,000

Add: Outstanding

12,500

1,08,000

Sale of Old Newspapers

3,000

Salary

1,25,000

Proceeds of Charity Show (Net)

36,000

Add: Current O/s

18,000

Interest on Investments

70,000

Less: Previous O/s

12,000

1,31,000

Sundries Income

4,000

Insurance

75,000

Subscription

8,17,500

Add: Previous

7,000

Add: Current O/s

25,000

Less: Current

3,000

79,000

Add: Previous Adv.

17,500

Petty Expenses

5,000

Less: Previous O/s

37,500

Newspaper

10,000

Less: Current Adv.

10,000

8,12,500

Lectures Fees

1,65,000

Honorarium to Secretary

1,20,000

Depreciation on Equipment

54,000

Depreciation on Building

60,000

Surplus

3,41,000

11,05,500

11,05,500

Balance Sheet as on March 31, 2019

Liabilities

Assets

Capital Fund

Prepaid Insurance

3,000

Opening Balance

22,66,000

Outstanding Subscription

25,000

Add: Surplus

3,41,000

26,07,000

Investments

7,00,000

Salary Outstanding

18,000

Equipment

2,56,000

Received Advance Subscription

10,000

Add: Purchases

3,00,000

Outstanding Electricity Charges

12,500

Less: Depreciation

54,000

5,02,000

Cash

20,500

Bank

2,50,000

Building

12,00,000

Less: Depreciation

60,000

11,40,000

Stock of Stationery

7,000

26,47,500

26,47,500

Working Notes 1: Capital Fund Evaluation

Balance Sheet as on March 31, 2018

Liabilities

Assets

Outstanding Salary

12,000

Prepaid Insurance

7,000

Subscription Received in Advance

17,500

Subscription Outstanding

37,500

Capital Fund

22,66,000

Stock of Stationery

22,500

Equipment

2,56,000

Building

12,00,000

Cash

22,500

Bank

50,000

Investments

7,00,000

22,95,500

22,95,500

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