TS Grewal Solutions Class 12 Accountancy Vol 1 Chapter 1 - Company Accounts Financial Statements of Not-for-Profit Organisations

TS Grewal Solutions Class 12 Volume 1 Accountancy Chapter 1

TS Grewal Solutions for Class 12 Accountancy Chapter 1 Company Accounts 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 Accountancy solutions for class 12.

Class 12 TS Grewal Solutions Accountancy 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

3 Comments

  1. Thanks a lot Byju’s !

  2. I liked The answers and I am quite satisfied

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