NCERT Solution for Class 12 Accountancy Chapter 1 - Accounting For Not For Profit Organisation

NCERT Solutions are said to be an extremely helpful book while preparing for the CBSE Class 12 Accountancy examinations. This study material owns a deep knowledge and the Solutions collected by the subject matter wizards are no distinct.

NCERT Solution for Class 12 Accountancy Chapter 1 – Accounting For Not For Profit Organisation furnishes us with an all-inclusive data to all the concepts. As the students would have learnt the basic fundamentals about the subject of accountancy in class 11, this curriculum for class 12 is a continual part of it; which explains the concepts in a great way.

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Access the solution for class 12 Accountancy Chapter 1 – Accounting For Not For Profit Organisation

Short Questions for NCERT Accountancy Solutions Class 12 Part 1 Chapter 1

1. State the meaning of ‘Not-for-Profit’ Organisations.

Organisations that are established with the aim of providing services to society and not profit earning are called as Not-for-profit Organisations (NPO). Some organisations that come under NPO are hospitals, religious organisations and trade unions. An NPO earns income from life membership fees, subscriptions, grants, donations etc.

2. State the meaning of Receipt and Payment Account.

A receipts and payments account (R & P Account) is a summary of actual cash receipts and payments that is extracted from the cash book over a certain time period. All the cash received is recorded on the Receipts and all the cash payments gets recorded in Payments side of the R & P Account. All the cash and bank transactions are recorded in Cash Book and this book is created on the basis of all these transaction. All cash and bank transactions that are of revenue and capital nature gets recorded. It records all transactions i.e. bank receipts and cash receipts.

This account helps in determining the closing balance of bank and cash receipts and thereby assess cash position of a Not-for-profit organisation or NPO.

3. State the meaning of Income and Expenditure Account.

Income and Expenditure (I & E) account is the equivalent of P & L account (Profit and Loss Account). In an income and expenditure account, surplus and deficit is determined during the accounting period while in a P& L account the net profit or loss is determined at the running of accounting period. It is nominal account and records transactions that are of revenue nature. The closing balance is called deficit or surplus based.

4. What are the features of Receipt and Payment Account?

The receipts and payments account has the following features:

1. It is known as cash book summary for NPO (Not-for-profit organisations) as it records all the cash and cash equivalents of the organisation.

2. This account shows cash transactions that are of revenue and capital nature

3. It does not follow the double entry bookkeeping system as it is a summary of transactions.

4. It does not include transactions that do not have cash or bank items.

5. It helps in revealing the cash position of the organisation

5. What steps are taken to prepare Income and Expenditure Account from a Receipt and Payment Account?

Following steps should be followed:

1. Exclude opening cash and bank balances and also do the same for closing cash and balances

2. Exclude income of the previous period and any such income that is received in advance

3. Exclude all items involving capital receipts and payments

4. Exclude expenditures that are of the previous or coming period

5. Include all incomes of the current period which are yet to be received

6. Include expenditures of current period which are yet to be paid.

7. Provision for bad debts and fixed assets depreciation should be taken into account and charged to the account (income and expenditure account)

6. What is subscription? How is it calculated?

For a not-for-profit organisation subscription acts as one of the main sources of income. It refers to money that the members pay periodically for maintaining their membership in active state. Subscription charges can be paid in flexible options like monthly, quarterly, half-yearly or yearly. It appears on the receipt side of R & P account.

For calculating subscription for current period, add subscription received in advance meant for current period during the previous year and outstanding subscription for current year to the subscription received for the current year and deducting subscription received in advance for next year and outstanding subscription from previous year from subscription received in the current year.

Calculation of Subscription

Subscription received during the year 

(+) Subscription received (in advance) during previous year

for current year

(+) Subscription outstanding at the end of the year

(-) Subscription received in advance for the next year

(-) Subscription outstanding for the previous year

Subscription shown in Income and Expenditure Account





7. What is Capital Fund? How is it calculated?

The scenario where value of assets of NPO are more than its liabilities, it is called as capital fund. This is similar to the concept of capital for an organisation working to earn profit. If any surplus amount is received from I & E account, it gets added to capital fund, likewise any deficit will be deducted from the same and is known as Accumulated Fund.

Calculating Capital Fund

Capital Fund at the beginning of the year

**

Add: Surplus from Income and Expenditure Account

**

Add: Subscription Amount (Capitalised amount)

**

Add: Life membership fee.

**

**

Less: Deficit from Income and Expenditure Account

**

Capital Fund at the end of the year

***

Long Questions for NCERT Accountancy Solutions Class 12 Part 1 Chapter 1

1. Explain the statement: “Receipt and Payment Account is a summarised version of Cash Book”.

A receipts and payments account (R & P Account) is a summary of actual cash receipts and payments that is extracted from the cash book over a certain time period. All the cash received is recorded on the Receipts and all cash payments are recorded in Payments side of the R & P Account. All the cash and bank transactions are recorded in Cash Book and this book is created on the basis of all these transaction. All cash and bank transactions that are of revenue and capital nature gets recorded. It records all transactions i.e. bank receipts and cash receipts.

This account helps in determining the closing balance of bank and cash receipts and thereby assess cash position of a Not-for-profit organisation or NPO.

Here are some similarities between Cash Book and Receipts and Payments Account:

1. Both are real accounts.

2. Only transactions of cash and bank are recorded

3. There is no distinction between Revenue and Capital Items

4. Helps in assessing the cash position of an organisation

5. Starts with an opening balance consisting of cash and bank and concludes with closing balance of cash and bank.

Therefore, it can be said that Receipt and Payments Account is a summarised version of cash book.

2. “Income and Expenditure Account of a Not-for-Profit Organisation is akin to Profit and Loss Account of a business concern”. Explain the statement.

The account containing all expenses and losses for current accounting period prepared by a Not-for-profit organisation is called as Income and Expenditure (I & E) account, while a similar account prepared by profit earning organisation is called as Profit and Loss Account (P & L).

Here are some of the similarities between I & E and P & L accounts:

1. Accrual basis is followed for the preparation of both accounts.

2. Expenses and losses are recorded on Expenditure (debit) side and gains and income are recorded on Income (credit) side.

3. Records only revenue items related to current accounting period.

4. Both exhibit nature similar to nominal accounts

Therefore, it can be said that from the above statements that Income and Expenditure account of a Not-for-Profit Organisation is akin to Profit and Loss Account of a business concern.

3. Distinguish between Receipts and Payments Account and Income and Expenditure Account.

Basis of Comparison

Receipts and Payments Account

Income and Expenditure Account

Nature

Contains bank and cash transaction summary.

Contains summary of income and expenses of current year

Revenue and Capital

Both revenue and capital transactions are recorded

Only revenue transactions are recorded

Debit Side

Records cash and bank receipts are recorded

Records expenses and losses incurred for the current accounting year

Credit side

Records payments received in form of cash and cheques

Records incomes and gains during the current accounting year

Account Type

Real Account

Nominal Account

Accounting Period

Records receipts and payments made during the year which may be related to current, previous or next accounting year

Records only the expenditure and income made during the current accounting year

Object

Shows the cash position of NPO

Shows the net results in terms of deficits or surplus

Depreciation

Non-cash items like depreciation is not included

Includes non-cash items like depreciation, bad-debts for determining net profit or loss.

Adjustment

Before preparing financial statements the Payments and Receipts received during the year can be adjusted.

Cash and non-cash transactions can be adjusted

System

Cash basis

Accrual Basis

 4. Explain the basic features of Income and Expenditure Account and of Receipt and Payment Account.

Income and Expenditure account is similar to the P & L account (Profit and Loss Account). In an income and expenditure account surplus and deficit is determined during the accounting period while in a P& L account the net profit or loss is determined during an accounting period. It is a nominal account and records transactions that are of revenue nature. The closing balance is called deficit or surplus based.

Basic Features of I & E Account are:

1. It is a nominal account

2. Prepared on the basis of R & P (Receipt and Payment Account). All revenue items irrespective of income or expenditure get transferred.

3. Transactions that are of capital nature are not included in the account.

4. It is similar to P & L account

5. Records only current accounting year items and excludes any other transactions

6. Items like prepaid expenses, depreciation, income received in advance can be adjusted.

7. Balancing figure is expressed as surplus or deficit based on the status of expenses and income.

A receipts and payments account is a summary of actual cash receipts and payments that is extracted from the cash book over a certain time period. All the cash received is recorded on the Receipts and all cash payments are recorded in Payments side of the Receipts and Payments Account. This account is prepared on the basis of all the cash and bank transactions that are recorded in Cash Book. It records all cash and bank transactions that are of revenue and capital nature. It records all transactions i.e. bank receipts and cash receipts.

This account helps in determining the closing balance of bank and cash receipts and thereby assess cash position of an NPO.

Basic Features of R & P Account are:

1. It is a real account also known as summarised version of Cash Book

2. It records only bank and cash transactions.

3. Non-cash transactions like depreciation is not recorded

4. It begins with an opening balance of cash and bank and ends with closing balance of cash and bank.

5. Helps in assessing the cash position of an organisation

6. It does not distinguish between capital and revenue items

5. Show the treatment of the following items by a Not-for-Profit Organisation:

(i)

Annual subscription

(ii)

Specific donation

(iii)

Sale of fixed assets

(iv)

Sale of old periodicals

(v)

Sale of sports materials

(vi)

Life membership fee

i) Annual Subscription

1. Subscriptions that are obtained during an accounting year (it may be related to current, previous or upcoming year) are reflected on the debit side of R & P Account.

2. Subscriptions related to the present year whether yet to be received or already received reflects on the credit side of I & E account (Income and Expenditure)

3. Advance subscriptions received for the following year are reflected on Liabilities side of balance sheet.

4. Subscriptions which are due but yet to be received are shown on Assets part of Balance Sheet.

5. Subscriptions that are due but yet to receive are reflected on asset side of balance sheet.

ii) Specific donation

1. Specific donation amount is reflected on Debit side of R & P Accounts.

2. Specific donation amount is shown on Liabilities side of Balance Sheet. Because it is used for that specific purpose for which it is received.

iii) Sale of fixed assets

1. Amount received recorded on debit side of R & P Account.

2. Profit/Loss is credited/debited to I & E Account.

3. Book value of asset deducted from the respective asset on Asset side of Balance Sheet

iv) Sale of old periodicals

1. Amount received reflects on the debit side of R & P Account.

2. Sale of old periodical is counted as revenue receipts, hence reflects on credit side of I & E Account.

v) Sale of sport Materials

1. Amount received is debited to R & P Account

2. Sport material sale is revenue earned, hence reflects on credit side of I & E Account.

vi) Life Membership Fees

1. It is considered as a receipt for a NPO. Hence, debited to R & P Account

2. It is one-time fee and hence treated as Capital receipts, hence, added to Capital Fund on liabilities side of Balance Sheet

6. Show the treatment of items of Income and Expenditure Account when there is a specific fund for those items.

A NPO (Not-for-Profit organisation) has different sources of receipts in the form of subscriptions, donations, government grants etc. Of these some receipts are general while some are specific. Specific receipts are used only for the purpose for which it is received while general receipts can be used for any purpose. The specific receipts are not considered as revenue income for the Not-for-Profit organisation and therefore are reflected in I & E account.

In a way, specific receipts are considered as liabilities to the Not-for-Profit organisation as these amounts are received for specific purpose and cannot be used elsewhere. These are reflected in Liabilities side of Balance Sheet, until and unless it is completely used for the purpose it was received. If such amount is invested in the form of shares or debentures, then it is known as funds such as prize funds, match funds etc. The interest earned on such investment are not credited to I & E Account, instead it is credited to the respective fund account.

Similarly, any expense that is incurred for such funds gets debited from respective fund account. Such funds are shown in the liabilities side of Balance Sheet. If the expenses exceed the receipts of the fund, the difference gets reflected in I & E Account.

Treatment for items received for specific purpose

(Tournament/Match/Prize, etc.) Fund Account

Dr.

Cr.

Date

Particulars

L.F.

Amount

Date

Particulars

L.F.

Amount

Expenses

(expenses incurred like, match expenses, tournament expenses)

Balance b/d

Incomes

(Income or interest earned on funds invested in the form of donation, interests, dividends, etc.)

Balance c/d

(see explanation)

(a)

Income and Expenditure A/c (see explanation)

(b)

Explanation (a)

When receipts are more than expenses meant for specific purpose, that time the difference between receipts and expenses is shown on balance sheet in the liabilities side.

Balance Sheet

Specific Fund (i.e. Tournament, Match, Prize Fund, etc.)

Tournament Fund Investment

Explanation (b)

When expenses are more than receipts meant for specific purpose, that time the difference between expenses and receipts is shown in I & E account at the expenditure side.

Income and Expenditure A/c

Expenditure

Amount

Income

Amount

Expenses

(I.e. Tournament, Match, Prize Expenses etc. except capital expenditure like, i.e.  expenses on construction of building)

7. What is Receipt and Payment Account? How is it different from Income and Expenditure Account?

A receipts and payments account is a summary of actual cash receipts and payments that is extracted from the cash book over a certain time period. All the cash received is recorded on the Receipts and all cash payments are recorded in Payments side of the Receipts and Payments Account. This account is prepared on the basis of all the cash and bank transactions that are recorded in Cash Book. It records all cash and bank transactions that are of revenue and capital nature. It records all transactions i.e. bank receipts and cash receipts.

This account helps in determining the closing balance of bank and cash receipts and thereby assess cash position of an NPO.

Basis of Comparison

Receipts and Payments Account

Income and Expenditure Account

Nature

Contains bank and cash transaction summary.

Contains summary of income and expenses of current year

Revenue and Capital

Both revenue and capital transactions are recorded

Only revenue transactions are recorded

Debit Side

Records cash and bank receipts are recorded

Records expenses and losses incurred for the current accounting period

Credit side

Records payments received in form of cash and cheques

Records incomes and gains during the current accounting period

Account Type

Real Account

Nominal Account

Accounting Period

Records receipts and payments made during the year which may be related to current, previous or next accounting year

Records only the expenditure and income made during the current accounting year

Object

Shows the cash position of NPO

Shows the net results in terms of deficits or surplus

Depreciation

Non-cash items like depreciation is not included

Includes non-cash items like depreciation, bad-debts for determining net profit or loss.

Adjustment

Before preparing financial statements the Payments and Receipts received during the year can be adjusted.

Cash and non-cash transactions can be adjusted

System

Cash basis

Accrual Basis

Numerical Questions for NCERT Accountancy Solutions Class 12 Part 1 Chapter 1

1. From the following particulars taken from the Cash Book of a health club, prepare a Receipts and Payments Account.

Particulars

Opening balance:

Cash in Hand

5,000

Cash at Bank

25,000

Subscriptions

1,65,000

Donations

35,000

Investment Purchased

80,000

Rent Paid

20,000

General Expenses

21,500

Postage and stationery

2,000

Courier charges

1,000

Sundry Expenses

2,500

Closing Cash in Hand

12,000

The solution for this question is as follows:

Books of Health Club

Receipt and Payment Account

Dr.

Cr.

Receipts

Amount

Payments

Amount

Balance b/d

Investment

80,000

Cash in Hand

5,000

Rent

20,000

Cash at Bank

25,000

30,000

General Expenses

21,500

Subscriptions

1,65,000

Postage and Stationery

2,000

Donations

35,000

Courier Charges

1,000

Sundry Expenses

2,500

Balance c/d

Cash in Hand

12,000

Cast at Bank

91,000

1,03,000

(Balancing figure)

2,30,000

2,30,000

2. The Receipt and Payment Account of Harimohan charitable institution is given:

Receipt and Payment Account for the year ending March 31, 2015

Receipts

Amount

 Payments

Amount

Balance b/d:

Furniture

3,000

Cash at Bank

22,000

Investments

55,000

Cash in Hand

 8,800

Advance for building

20,000

Donations

32,000

Charities

 60,000

Subscriptions

50,200

Salaries

10,400

Endowment Fund

 60,000

Rent and Taxes

4,000

Legacies

24,000

Printing

1,000

Interest on Investment

 3,800

Postage

300

Interest on Deposits

 800

Advertisements

1,100

Sale of old newspapers

500

Insurance

4,800

Balance c/d:

Cash at Bank

32,000

Cash in Hand

10,500

2,02,100

2,02,100

Prepare the Income and Expenditure Account for the Year ended on March 31, 2015 after considering the following:

(i)

It was decided to treat Fifty per cent of the amount received on account of Legacies and Donations as income.

(ii)

Liabilities to be provided for are:

 

Rent ₹ 800; Salaries ₹ 1,200; advertisement ₹ 200.

(iii)

₹ 2,000 due for interest on investment was not actually received.

 The solution for this question is as follows

Books of Harimohan Charitable Institution

Income and Expenditure Account

Dr.

Cr.

Expenditure

Amount

Income

Amount

Rent and Taxes

4,000

Donations

16,000

Add: Outstanding

800

4,800

Legacies

12,000

Subscriptions

50,200

Salaries

10,400

Interest on Investment

3,800

 Add: Outstanding

1,200

11,600

Add: Accrued Interest

2,000

5,800

Advertisement

1,100

Interest on Deposits

800

Add: Outstanding

200

1,300

Sale of Old Newspapers

500

Charities

60,000

Printing

1,000

Postage

300

Insurance

4,800

Surplus (Excess of Income over Expenditure)

1,500

85,300

85,300

3. From the following particulars, prepare Income and Expenditure account:

Details

Amount ₹

Fees collected, including ₹ 80,000 on account of the previous year

5,20,000

Fees for the year outstanding

30,000

Salary paid, including ₹ 5,000 on account of the previous year

68,000

Salary outstanding at the end of the year

3,000

Entertainment expenses

8,000

Tournament expenses

25,000

Meeting Expenses

18,000

Traveling Expenses

7,000

Purchase of Books and Periodicals, including ₹ 31,000 for purchase of Books

40,000

Rent

15,000

Postage, telegrams and telephones

6,000

Printing and Stationery

18,000

Donations received

25,000

 The solution for this question is as follows

Income and Expenditure Account

Dr.

Cr.

Expenditure

Amount

Income

Amount

Salaries

68,000

Fees Collected

5,20,000

Less: Previous year’s Outstanding

(5,000)

Less: Previous year’s Outstanding

(80,000)

63,000

4,40,000

Add: Current year’s Outstanding

3,000

66,000

Add: Current year’s Outstanding

30,000

4,70,000

Entertainment Expenses

8,000

Donations

25,000

Tournament Expenses

25,000

Meeting Expenses

18,000

Traveling Expenses

7,000

Purchases of Periodicals (40,000 – 31,000)

9,000

Postage, Telegrams and Telephone’s

6,000

Rent

15.000

Printing and Stationery

18,000

Surplus (Excess of Income over Expenditure)

3,23,000

4,95,000

4,95,000

NOTE: As per the solution, Excess of Income over Expenditure is ₹ 3, 23,000; however, as per the book, it is ₹ 3, 07,000.

4. 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:

Particulars

Sports Fund as on 1.4.2015

 35,000

Sports Fund Investments

35,000

Interest on Sports Fund

4,000

Donations for Sports Fund

15,000

Sports Prizes awarded

10,000

Expenses on Sports Events

4,000

General Fund

80,000

General Fund Investments

80,000

Interest on General Fund Investments

8,000

 The solution for this question is as follows

Books of Sports Club

Income and Expenditure Account

Dr.

Cr.

Expenditure

Amount

Income

Amount

Interest on General Fund Investments

8,000

Balance Sheet

Liabilities

Amount

Assets

Amount

Sports Fund

35,000

Sports Fund Investments

35,000

Add: Interest on Sports Fund

4,000

General Fund Investments

80,000

Add: Donations for Sports Fund

15,000

54,000

Less: Expenses on Sports Event

(4,000)

Less: Prize Awarded

(10,000)

40,000

General Fund

80,000

5. How will you deal with the following items while preparing for the Bombay Women Cricket Club its income and expenditure account for the year ending 31.3.2017 and its Balance Sheet as on 31.3.2017?

(a)

Donation received during the year for the construction of a permanent Pavilion

12,25,000

Expenditure incurred up to 31.3.2017 on its construction

10,80,000

The total estimated expenditure on construction of Pavilion being

25,00,000

(b)

Tournament Fund:

Balance as on 1.4.2016

10,700

Subscriptions for tournament received during the year

65,800

Expenditure incurred during the year on conducting tournaments

72,400

(c)

Life Membership fee received during the year

28,000

Give reasons for your answers

The solution for this question is as follows

(a)

Books of Bombay Women Cricket Club

Balance Sheet 

as on March 31, 2017

Liabilities

Amount

Assets

Amount

Donation for Pavilion

12,25,000

Construction of Pavilion in Progress

10,80,000

Less: Exp. on construction of Pavilion

(10,80,000)

1,45,000

Capital 

Add: Pavilion Construction

10,80,000

10,80,000

Reason:

Donation for construction of Pavilion is a donation for specific purpose.

Expenses on construction on Pavilion is a capital expenditure.

(b)

Balance Sheet 

as on March 31, 2017

Liabilities

Amount

Assets

Amount

Tournament Fund

10,700

Add: Subscription for Tournament

65,800

76,500

Less: Tournament Expenses

(72,400)

4,100

Reason

All funds received are treated as capital receipts and expenses related to any fund are deduced from the concerned funds.

(c)

Balance Sheet 

as on March 31, 2017

Liabilities

Amount

Assets

Amount

Life Membership Fees

28,000

Reason

When there is no specific information on treatment of Life Membership fees, it is shown on liabilities side of Balance sheet as it is considered as capital receipt. On treated as revenue, it is shown in credit side of I & E Account.

6. From the following receipts and payments and information given below, Prepare Income and Expenditure Account and opening Balance Sheet of Adult Literacy Organisation as on December 31, 2017.

Receipt and Payment Account for the year ending 

as on December 31, 2017

Receipts

Amount

Payments

Amount

Balance b/d

General Expenses

3,200

Cash in hand

4,000

News paper

1,850

Cash at Bank

 15,550

Electricity

3,000

Subscriptions

Fixed deposit with bank

(on 31.06.2017) @ 10% p.a.

18,000

2016

1,200

2017

26,500

Books

7,000

2018

500

28,200

Salary

3,600

Sale of old newspapers

1,250

Rent

6,500

Govt. grant

12,000

Postage charges

300

Sale of old furniture (book value ₹ 5, 000)

 3,700

Furniture (purchased)

10,500

Interest received on FD

 450

Balance c/d

Cash in Hand

 3,000

Cash at Bank

8,200

65,150

65,150

Information:

(i)    Subscription outstanding as on 31.12.2016 ₹ 2,000 and on December 31, 2017 ₹ 1,500.

(ii)   On December 31, 2017 Salary outstanding ₹ 600, and one month Rent paid in advance.

(iii)  On Jan. 01, 2016 organisation owned Furniture ₹ 12,000, Books ₹ 5,000.

The solution for this question is as follows:


Books of Adult Literacy Organisation

Income and Expenditure Account 

as on Dec. 31, 2017

Dr.

Cr.

Expenditure

Amount

Income

Amount

Loss on Sale of Old Furniture

1,300

Subscription

26,500

General Expenses

3,200

Add: Outstanding for 2017

1,500

28,000

Newspapers

1,850

Electricity

3,000

Sale of Old Newspapers

1,250

Salary

3,600

Government Grant

12,000

Add: Outstanding for 2017

600

4,200

Interest received on F.D.

450

Add: Accrued Interest

450

900

Rent

6,500

Less: Prepaid for 2018 {6,500×(1/13)}

(500)

6,000

Postages Charges

300

Surplus (Excess of Income over Expenditure)

22,300

42,150

42,150

Balance Sheet 

as on Dec. 31, 2016

Liabilities

Amount

Assets

Amount

Capital Fund on Dec. 31, 2016 (Balancing Figure)

38,550

Subscription Outstanding

2,000

Cash in Hand

4,000

Cash at Bank

15,550

Furniture

12,000

Books

5,000

38,550

38,550

 

Balance Sheet 

as on Dec. 31, 2017

Liabilities

Amount 

Assets

Amount 

Capital

38,550

Prepaid Rent

500

Add: Surplus

22,300

60,850

Books

5,000

Add: Purchases

7,000

12,000

Salary Outstanding

600

Subscription  Received in Advance for 2018

 500

Furniture

12,000


 

Add: Purchases

10,500

22,500

Less: Sale

(5,000)

17,500

Fixed Deposit

18,000

Add: Accrued Interest

450

18,450

Cash in Hand

3,000

Cash at Bank

8,200

Subscription Outstanding for 2017

1,500

Add: Outstanding for 2016

800

2,300

61,950

61,950

7. The following is the account of cash transactions of the Nari Kalayan Samittee for the year ended December 31, 2017:

Receipts

Amount

Payments

Amount

Balance from last year

2,270

Rent 

6,600

Subscriptions

32,500

Electric charges

3,200

Life membership fee

3,250

 Lecturer’s fee

730

Donation

2,500

Office expenses

1,480

Profit from entertainment

7,250

Printing and Stationery

1,050

Sale of old Books (books value ₹ 1,000)

750

Legal fee

1,870

Interest

350

Books

6,500

Furniture purchased

 8,600

Expenses on nukar drama

1,300

Cash in hand

8,040

Cash at bank

9,500

48,870

48,870

You are required to prepare an Income and Expenditure Account after the following adjustments:

(a) Subscription still to be received are ₹ 750, but subscription include ₹ 500 for the year 2018.

(b)  In the beginning of the year the Sangh owned building ₹ 20,000 and furniture ₹ 3,000 and Books ₹ 2,000.

(c) Provide depreciation on furniture @ 5% (including purchase), books @ 10% and building @ 5%.

The solution for this question is as follows:

Books of  Nari Kalyan Samittee

Income and Expenditure Account 

as on Dec. 31, 2017

Dr.

Cr.

Expenditure

Amount

Income

Amount

Rent

6,600

Subscription

32,500

Electric Charges

3,200

Add: Outstanding for 2017

750

Lecturer’s fee

730

33,250

Office Expenses

1,480

Less: Advance for 2018

(500)

32,750

Printing and Stationery

1,050

Donation

2,500

Legal Fee

1,870

Profit from Entertainment

7,250

Depreciation on:

Interest

350

Books

750

Furniture

580

Building

1,000

2,330

Expenses on Nukar Drama

1,300

Loss on Sale of Books

250

Surplus

24,040

42,850

42,850

Balance Sheet 

as on Dec. 31, 2016

Liabilities

Amount

Assets

Amount

Capital Fund as Dec. 31, 2016

27,270

Building

20,000

(Balancing Figure)

Furniture

3,000

Books

2,000

Cash and Bank

2,270

27,270

27,270

Balance Sheet 

as on Dec. 31, 2017

Liabilities

Amount

Assets

Amount

Capital Fund

27,270

Building

20,000

Add: Life Membership Fees

3,250

Less: 5% Depreciation

(1,000)

 19,000

Add: Surplus

24,040

 54,560

Furniture

3,000

Advance Subscription for 2018

500

Add: Purchases

8,600

11,600

Less: 5% Depreciation

580

11,020

Books

2,000

Add: Purchases

6,500

 8,500

Less: Sales

1,000

7,500

Less: 5% Depreciation

750

6,750

Cash in Hand

8,040

Cash at Bank

9,500

Subscription Outstanding

750

55,060

55,060

8. Following is the Receipt and Payment Account of Indian Sports Club, prepared Income and Expenditure Account, Balance Sheet as on December 31, 2017:

Receipt and Payment Account 

for the year ending December 31, 2017

Receipts

Amount

Payments

Amount

Balance b/d

7,890

Salary

11,000

Subscriptions

52,000

Electric charges

5,500

Life member ship fee

2,200

Billiard Table

17,500

Entrance fee

3,200

Office expenses

4,100

Tournament fund

26,000

Printing and Stationery

 2,300

Locker Rent

 1,250

Tournament expenses

18,500

Sale of old sports goods (Costing ₹ 2,200)

2,500

Repair of ground

 2,000

Sale of Old Newspaper

 750

Furniture purchased

 7,700

Legacy

37,500

Sports equipment’s

12,000

Cash in Hand

12,690

Cash at Bank

 10,000

Fixed Deposit (on 1.10.17 for 10% p.a)

30,000

1,33,290

1,33,290

Other Information:

Subscription outstanding was on December 31, 2016 ₹ 1,200 and ₹ 3,200 on December 31, 2017. Locker rent outstanding on December 31, 2017 ₹ 250. Salary outstanding on December 31, 2017 ₹ 1,000.

On January 1, 2017, club has Building ₹ 36,000, furniture ₹ 12,000, and Sports equipment’s ₹ 17,500. Depreciation charged on these items @ 10% (including Purchase).

 

The solution for this question is as follows:

Indian Sports Club

Income and Expenditure Account 

as on Dec. 31, 2017

Dr.

Cr.

Expenditure

Amount

Income

Amount

Salary

11,000

Subscriptions

52,000

Add: Outstanding for 2017

1,000

12,000

Add: Outstanding for 2017

3,200

Electric Charges

5,500

55,200

Office Expenses

4,100

Less: Outstanding for 2016

(1,200)

54,000

Printing and Stationery

 2,300

Repair of Ground

 2,000

Locker Rent

1,250

Depreciation on:

Add: Outstanding for 2017

250

 1,500

Furniture

1,970

Building

3,600

Entrance Fees

 3,200

Sports Equipments

2,730

 8,300

Profit on Sale of Sports

Surplus

26,300

Equipments (₹ 2,500 – ₹ 2,200)

300

Sale of Old Newspapers

750

Accrued Interest

750

60,500

60,500

Balance Sheet 

as on January 01, 2016

Liabilities

Amount

Assets

Amount

Capital Fund (Balancing Figure)

74,590

Subscription Outstanding

1,200

Building

36,000

Furniture

12,000

Sports Equipments

17,500

Cash and Bank

7,890

74,590

74,590

Balance Sheet 

as on Dec. 31, 2017

Liabilities

Amount

Assets

Amount

Salary Outstanding 

1,000

Subscripting Outstanding

3,200

Tournament Fund

26,000

Locker Rent Outstanding

250

Less: Tournament Expenses

18,500

7,500

Building

36,000

Less: 10% Depreciation

(3,600)

32,400

Capital fund

74,590

Add: Life Membership Fee

2,200

Furniture

12,000

Add: Legacy

37,500

Add: Purchases

7,700

Add: Surplus

26,300

1,40,590

19,700

Less: 10% Depreciation

(1,970)

17,730

Sports Equipments

17,500

Add: Purchases

12,000

29,500

Less: Sales

(2,200)

27,300

Less: 10% Depreciation

(2,730)

24,570

Billiard Table 

17,500

Cash in hand

12,690

Cash at Bank

10,000

Fixed Deposit

30,000

Add: Accrued Interest

750

30,750

1,49,090

1,49,090

9. From the following Receipt and Payment Account of Jan Kalyan Club, prepare Income and Expenditure Account and Balance Sheet for the year ending March 31, 2017.      

Receipt and Payment Account 

for the year ending March 31, 2017

Receipts

Amount

Payments

Amount

Cash in hand as on 1.4.16

6,800

Salaries

24,000

Subscription

60,200

Traveling Expenses

6,000

Donation

3,000

Stationery

2,300

Sale of furniture (Book value ₹ 6000)

4,000

Rent

16,000

Entrance fee

800

Repair

700

Life membership fee

7,000

Books purchased

 6,000

Interest on investment (@ 5% for full year)

5,000

Building purchased

30,000

Cash in hand as 31.3.2017

1,800

86,800

86,800

Additional Information:

As on

1.04.2016

As on

31.03.2017

(i)

Subscription received in advance

1,000

 3,200

(ii)

Outstanding subscription

2,000

3,700

(iii)

Stock of stationery

 1,200

 800

(iv)

Books

13,500

16,500

(v)

Furniture

16,000

8,000

(vi)

Outstanding rent

1,000

2,000

 The solution for this question is as follows:

Books of Jan Kalyan Club

Income and Expenditure Account 

as on 31 March 2017

Dr.

Cr.

Expenditure

Amount

Income

Amount

Loss on Sale of Furniture (₹ 6,000 – ₹ 4,000)

2,000

Subscription

60,200

Salaries

24,000

Less: Outstanding for 2016

(2,000)

Traveling Expenses

6,000

58,200

Stationery

2,300

Add: Outstanding for 2017

3,700

Add: Opening Stock

1,200

61,900

3,500

Add: Advance in 2016

1,000

Less: Closing Stock

(800)

2,700

62,900

Less: Advance in 2017

(3,200)

59,700

Repairs

700

Rent

16,000

Donation

 3,000

Less: Outstanding for 2016

(1,000)

Entrance Fees

800

15,000

Interest on Investments  

5,000

Add: Outstanding for 2017

2,000

17,000

Depreciation on Books

3,000

Depreciation on Furniture

2,000

Surplus

11,100

68,500

68,500

Balance Sheet 

as on April 01, 2016

Liabilities

Amount

Assets

Amount

Advance Subscription

1,000

Cash in Hand

6,800

Outstanding Rent

1,000

Investment {5,000 × (100/5)}

1,00,000

Capital Fund (Balancing figure)

1,37,500

Subscription Outstanding

2,000

Stock of Stationery

1,200

Books

13,500

Furniture

16,000

1,39,500

1,39,500

Balance Sheet 

as on March 31, 2017

Liabilities

Amount

Assets

Amount

Advance Subscription

3,200

Subscription Outstanding

3,700

Outstanding Rent

2,000

Stock of Stationery

800

Capital Fund

1,37,500

Investments

1,00,000

Add: Life Membership Fees

7,000

Add: Surplus

11,100

1,55,600

Books

13,500

Add: Purchases

6,000

19,500

Less: Depreciation

(3,000)

16,500

Building

30,000

Cash in Hand

1,800

Furniture

16,000

 Less: Sales

6,000

10,000

 Less: Depreciation

(2,000)

8,000

1,60,800

1,60,800

10. Receipt and Payment Account of Shankar Sports club is given below, for the year ended March 31, 2017

Receipt and Payment Account 

for the year ending March 31, 2017

Receipts

Amount

Payments

Amount

Opening Cash in hand

2,600

Rent

18,000

Entrance fees

3,200

Wages

7,000

Donation for building

23,000

Billiard table

 14,000

Locker rent

 1,200

Furniture

 10,000

Life membership fee

7,000

Interest

 2,000

Profit from entertainment

3,000

Postage

1,000

Subscription

40,000

Salary

24,000

Cash in hand

4,000

80,000

 80,000

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

Subscription outstanding on March 31, 2016 is ₹ 1, 200 and ₹ 2,300 on March 31, 2017, opening stock of postage stamps is ₹ 300 and closing stock is ₹ 200, Rent ₹ 1,500 related to 2015 and ₹ 1,500 is still unpaid.

On April 01, 2016 the club owned furniture ₹ 15,000, Furniture valued at ₹ 22,500

On March 31, 2017. The club took a loan of ₹ 20,000 (@ 10% p.a.) in 2017.

The solution for this question is as follows:

Books of Shankar Sports Club

Income and Expenditure Account 

as on 31 Dec. 2017

Dr.

Cr.

Expenditure

Amount

Income

Amount

Rent

18,000

Entrance Fees

3,200

Add: Outstanding for 2017

1,500

Locker Rent

1,200

19,500

Profit from Entertainment

3,000

Less: Outstanding for 2016

(1,500)

18,000

Subscription

40,000

Wages

7,000

Less: Outstanding for 2016

(1,200)

Depreciation on Furniture

2,500

38,800

Interest

2,000

Add: Outstanding for 2017

2,300

41,100

Postage

1,000

Deficit (Balancing Figure)

6,100

Add: Opening Stock

300

1,300

Less: Closing Stock

(200)

1,100

Salaries

24,000

54,600

54,600

Balance Sheet 

as on  December 31, 2016

Liabilities

Amount

Assets

Amount

Rent Outstanding

1,500

Cash in Hand

2,600

10%  Loan

20,000

Subscription Outstanding

1,200

Furniture

15,000

Stock of Postage Stamps

300

Capital fund Deficit (Balancing figure)

2,400

21,500

21,500

Balance Sheet 

as on December 31, 2017

Expenditure

Amount

Income

Amount

Rent Outstanding

1,500

Subscription Outstanding

2,300

10%  Loan

20,000

Stock of Postage Stamps

200

Donation for Building

23,000

Billiard Table

14,000

Capital Fund

(2,400)

Furniture

15,000

Add: Life Membership Fee

7,000

Add: Purchases

10,000

Less: Deficit

(6,100)

25,000

Less: Depreciation

(2,500)

22,500

Cash in Hand

4,000

Capital Fund (Deficit)

1500

44,500

44,500

* NOTE 1:

Capital Fund

(2,400)

Add:

Life Membership Fees

7,000

Less:

Deficit

(6,100)

Net Deficit

(1,500)

11. Prepare Income and Expenditure Account and Balance Sheet for the year ended March 31, 2016 from the following Receipt and Payment Account and Balance Sheet of culture club:
 

Receipt and Payment Account 

for the year ending March 31, 2016

Receipts

Amount

(₹)

Payments

Amount

(₹)

Opening cash balance

12,000

Furniture

4,000

Subscription

Telephone expenses

800

2014-15

2,000

Salary

2015-16

22,000

24,000

2014-15

1,000

Entrance fees

2,800

2015-16

4,000

Locker rent

1,000

Newspapers

700

Life membership fee

1,200

Sundry expenses

 1,000

Government grant

11,000

Defence bonds

18,000

Land

20,000

Closing cash balance

2,500

52,000

52,000

Balance Sheet 

for the year ending March 31, 2016

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Advance locker rent

200

Cash in hand

12,000

Subscription received in Advance

1,000

Outstanding subscription

3,000

Outstanding salary

 2,000

Building

35,000

Loan

10,000

Capital fund

 36,800

50,000

50,000

The solution for this question is as follows:

Books of Culture Club

Income and Expenditure Account 

as on March 31, 2016

Dr.

Cr.

Expenditure

Amount

Income

Amount

Telephone Expenses

800

Subscription

22,000

Salary

4,000

Add: Advance Received in 2015

1,000

23,000

Newspapers

700

Sundry Expenses

1,000

Entrance Fees

2,800

Locker Rent

1,000

Surplus (Balancing figure)

31,500

Add: Advance Received in 2015

200

1,200

Government Grants

11,000

38,000

38,000

Balance Sheet 

as on March 31, 2016

Liabilities

Amount

Assets

Amount

Capital Fund

36,800

Subscription Still Outstanding for 2015

1,000

Add: Life Membership Fees

1,200

(₹ 3,000 – ₹ 2,000)

Add: Surplus

31,500

69,500

Furniture

4,000

Defence Bonds

18,000

Salary Still Outstanding for 2015

1,000

Land 

20,000

Loan

10,000

Building

35,000

Cash in Hand

2,500

80,500

80,500

12. From the following Receipt and Payment Account prepare final accounts of a Unity Club for the year ended March 31, 2017.

Receipt and Payment Accounts 

for the year ending March 31, 2017

Receipts

Amount

Payments

Amount

Balance b/d

15,000

Furniture

18,000

Sale of Old furniture (costing ₹ 6,000)

4,000

Library books

10,000

Subscriptions:

Salaries

 72,000

2015–16

 18,000

General expenses

18,000

2016–17

60,000

Electric charges

12,000

2017–18

12,000

 90,000

Newspapers

33,800

Sale of old newspapers

10,800

Postage

 3,000

Profit from entertainment

44,000

Stationery

 40,000

Rent

84,000

Audit fee

 8,000

Balance c/d

33,000

2,47,800

2,47,800

Balance Sheet 

as on March 31, 2016

Liabilities

Amount

Assets

Amount

Outstanding Salary

6,000

Cash

15,000

Capital Fund

6,94,000

Outstanding subscription

18,000

Library Books

30,000

Furniture

37,000

Land and Building

6,00,000

7,00,000

7,00,000

Additional Information:

1.

The Club had 500 members each paying an annual subscription of ₹ 150.

2.

On 31.3.2016 salaries outstanding amounted to ₹ 1,200 and salaries paid included ₹ 6,000 for the year 2015–16.

3.

Provide 5% depreciation on Land and Building.

The solution for this question is as follows:

Books of Unity Club

Income and Expenditure Account 

as on March 31, 2017

Dr.

Cr.

Expenditure

Amount 

Income

Amount

Loss on Sale of Old Furniture (4,000 – 6,000)

 2,000

Subscription

500 members at ₹ 150 each

75,000

Salaries

72,000

Sale of Old Newspapers

10,800

Add: Outstanding for 2015–16

1,200

Profit from Entertainment

44,000

73,200

Rent

84,000

Less: Outstanding for 2016–17

(6,000)

67,200

General Expenses

18,000

Deficit (Balancing figure)

200

Electric Charges

12,000

Newspapers

33,800

Postage

3,000

Stationery

40,000

  Audit Fees

8,000

Depreciation on Land and Building

30,000

2,14,000

2,14,000

Balance Sheet 

as on 31 March 2017

Liabilities

Amount 

Assets

Amount 

Advance Subscription (for 2017–18)

12,000

Subscription Outstanding

15,000

Salaries Outstanding

1,200

Furniture

37,000

Capital Fund

6,94,000

Add: Purchases

18,000

Less: Deficit

(200)

6,93,800

55,000

Less: Sales

(6,000)

49,000

Library Books

30,000

Add: Purchases

10,000

40,000

Land and Building

6,00,000

Less: 5% Depreciation

(30,000)

5,70,000

Cash and Bank

33,000

7,07,000

7,07,000

13. Following is the information in respect of certain items of a Sports Club. You are required to show them in the Income and Expenditure Account and the Balance Sheet.

Details

Amount

Sports Fund as on April 1, 2016

80,000

Sports Fund Investments

80,000

Interest on Sports Fund Investments

8,000

Donations for Sports Fund

30,000

Sports Prizes awarded

16,000

Expenses on Sports Events

7,000

General Fund

2,00,000

General Fund Investments

2,00,000

Interest on General Fund Investments

 20,000

 The solution for this question is as follows:

Income and Expenditure Account 

as on March 31, 2016

Dr.

Cr.

Expenditure

Amount

Income

Amount

Interest on General Fund Investments

20,000

Balance Sheet 

as on March 31, 2016

Liabilities

Amount

Assets

Amount

Sports Fund

80,000

Sports Fund Investments

80,000

Add: Interest on Sports Fund

General Fund Investments

2,00,000

Investments

8,000 

Add: Donation for Sports Fund

30,000

1,18,000

Less: Sports Prizes Awarded

(16,000)

Less: Expenses on Sports Events

(7,000)

95,000

General Fund

 2,00,000

14. Receipt and Payment Account of Maitrey Sports Club showed that ₹ 68,500 were received by way of subscriptions for the year ended on March 31, 2017.

The additional information was as under:

1. Subscription Outstanding as on March 31, 2016 were ₹ 6,500,

2. Subscription received in advance as on March 31, 2016 were ₹ 4,100,

3. Subscription Outstanding as on March 31, 2017 were ₹ 5,400,

4. Subscription received in advance as on March 31, 2017 were ₹ 2,500.

Show how that above information would appear in the final accounts for the year ended on March 31, 2017 of Maitrey Sports Club.

The solution for this question is as follows:

Books of Maitrey Sports Club

Income and Expenditure Account 

as on March 31, 2017

Dr.

Cr.

Expenditure

Amount

 ₹

Income

Amount

Subscription

68,500

Less: O/s on Mar. 31, 2016

(6,500)

62,000

Add: Advance on Mar. 31, 2016

4,100

Add: O/s on Mar. 31, 2017

5,400

71,500

Less: Advance on Mar. 31, 2017

(2,500)

69,000

Balance Sheet 

as on  March 31, 2016

Liabilities

Amount

Assets

Amount

Subscription in Advance

4,100

Subscription Outstanding

6,500

Balance Sheet 

as on March 31, 2017

Liabilities

Amount

Assets

Amount

Subscription in Advance

2,500

Subscription Outstanding

5,400

15. Following is the Receipt and Payment account of Rohatgi Trust:

Receipt and Payment Account 

for the year ending December 31, 2017

Receipts

Amount

Payments

Amount

Cash in hand

14,000

Rent

6,000

Cash at Bank

60,000

Salary

12,000

Subscriptions:

2016

2017

2018

5,000

83,000

3,000

91,000

Postage

Electricity charges

Purchase of furniture

Books

300

6,000

20,000

3,000

Sale of Investment

90,000

Defence Bonds

1,50,000

Interest on investment

2,000

Help to needy students

22,000

Sale of furniture (book value ₹ 3,000)

 3,200

Cash in hand

Cash at bank

10,900

30,000

2,60,200

2,60,200

Prepare Income and expenditure account for the year ended December 31, 2017, and a balance sheet as on that date after the following adjustments: Subscription for 2017, still owing were ₹ 7,000. Interest due on defence bonds was ₹7,000, Rent still owing was ₹ 1,000. The Book value of investment sold was ₹ 80,000, ₹ 30,000 of the investment were still in hand. Subscription received in 2017 included ₹ 400 from a life member. The total furniture on January 1, 2017 was worth ₹ 12,000. Salary paid for the year 2018 is ₹ 2,000.

The solution for this question is as follows:

Books of Rohatgi Trust

Income and Expenditure Account 

as on December 31, 2017

Dr.

Cr.

Expenditure

Amount

 ₹

Income

Amount

 ₹

Rent

6,000

Subscription

83,000

Add: Outstanding

1,000

7,000

Add: Outstanding for 2017

7,000

90,000

Salary

12,000

Less: Life Membership Fees

(400)

89,600

Less: Advance for 2018

(2,000)

10,000

Interest Accrued on Defence Bonds

7,000

Postage

300

Profit on Sale of Investment

(₹ 90,000 – ₹ 80,000)

10,000

Electricity Charges

6,000

Profit on Sale of Furniture

(₹ 3,200 – ₹ 3,000)

200

Help to Needy Students

22,000

Interest on Investments

2,000

Surplus (Balancing Figure)

63,500

1,08,800

1,08,800

Balance Sheet 

as on December 31, 2016

Liabilities

Amount

Assets

Amount

Capital fund (Balancing Figure)

2,01,000

Subscription Outstanding

5,000

Investment (₹ 80,000 + ₹ 30,000)

1,10,000

Furniture

12,000

Cash in hand

14,000

Cash at bank

60,000

2,01,000

2,01,000

Balance Sheet 

as on December 31, 2017

Expenditure

Amount

 ₹

Income

Amount

 ₹

Advance Subscription 

3,000

Subscription Outstanding

7,000

Rent Outstanding

1,000

Defence Bonds

1,50,000

Capital Fund

2,01,000

Add: Accrued Interest on Defence Bonds

7,000

1,57,000

Add: Surplus

63,500

Add: Life Membership Fees

400

 2,64,900

Investment

30,000

Advance Salaries

2,000

Furniture

12,000

Add: Purchases

20,000

32,000

Less: Sales

(3,000)

29,000

Books

3,000

Cash in Hand

10,900

Cash at Bank

30,000

2,68,900

2,68,900

16. Following Receipt and Payment Account was prepared from the cash book of Delhi Charitable Trust for the year ending December 31, 2017

Receipt and Payment Account 

for the year ending December 31, 2017

Receipts

Amount

Payments

Amount

Balance b/d

Charity

11,500

Cash in hand

11,500

Rent and taxes

3,200

Cash at bank

12,600

Salary

6,000

Donation

9,000

Printing

600

Subscription

42,800

Postage

300

Legacies

18,000

Advertisements

4,500

Interest on investment

4,500

Insurances

2,000

Sale of old newspapers

200

Furniture

21,600

Investment

23,000

Balance c/d:

Cash in hand

9,900

Cash at bank

16,000

98,600

98,600

Prepare Income and expenditure account for the year ended December 31, 2017, and a balance sheet as on that date after the following adjustments:

(a)

It was decided to treat one-third of the amount received on account of donation as income.

(b)

Insurance premium was paid in advance for three months.

(c)

Interest on investment ₹1,100 accrued was not received.

(d)

Rent ₹600: salary ₹900 and advertisement expenses ₹1,000 outstanding as on December 31, 2017.

The solution for this question is as follows:

Books of Delhi Charitable Trust

Income and Expenditure Account 

as on December 31, 2017

Dr.

Cr.

Expenditure

Amount

 ₹

Income

Amount

 ₹

Insurance

2,000

Donation {9,000 × (1/3)}

3,000

Less: Prepaid {2,000 × (3/15)}

(400)

1,600

Interest on Investments

4,500

Add: Accrued Interest

1,100

5,600

Charity

11,500

Rent and Taxes

3,200

Subscription

42,800

Add: Outstanding

600

3,800

Sale of Old Newspapers

200

Salary

6,000

Add: Outstanding

900

6,900

Printing

600

Postage

300

Advertisements

4,500

Add: Outstanding

1,000

5,500

Surplus (Balancing figure)

21,400

51,600

51,600

Balance Sheet 

as on December 31, 2016

Liabilities

Amount

Assets

Amount

Capital Fund (Balancing figure)

24,100

Cash in Hand

11,500

Cash at Bank

12,600

24,100

24,100

Balance Sheet 

as on December 31, 2017

Liabilities

Amount

Assets

Amount

Capital Fund

24,100

Prepaid Insurance {2,000 × (3/15)}

400

Add: Donation {9,000 × (2/3)

6,000

Investment

23,000

Add: Legacies

18,000

Add: Accrued Interest

1,100

24,100

Add: Surplus

21,400

69,500

Furniture

21,600

Rent Outstanding

600

Cash in Hand

9,900

Salary Outstanding

900

Cash at Bank

16,000

Advertisement Expenses Outstanding

1,000

72,000

72,000

 17. From the following Receipt and Payment Account of a club, prepare Income and Expenditure Account for the year ended March 31, 2017 and the Balance Sheet as on that date.

Receipt and Payment Account 

for the year ending March 31, 2017

Receipts

Amount

Payments

Amount

Balance b/d

3,500

General expenses

900

Subscription:

2015-16

2016-17

2017-18

2,000

70,000

3,000

75,000

Salary

Postage

Electricity charges

Furniture

16,000

1,300

7,800

26,500

Sale of old Books

2,000

Books

13,000

(Costing ₹ 3,200)

Newspapers

600

Rent from use of hall

17,000

Meeting expenses

7,200

Sale of newspapers

400

T.V. set

16,000

Profit from entertainment

7,300

Balance c/d

15,900

1,05,200

1,05,200

Additional Information:

(a)

The club has 100 members each paying an annual subscription of ₹ 900. Subscriptions outstanding on March 31, 2016 were ₹ 3,600.

(b)

On March 31, 2017, salary outstanding amounted to ₹ 1,000, Salary paid included ₹ 1,000 for the year 2012.

(c)

On April 1, 2017 the club owned land and building ₹ 25,000, furniture ₹ 2,600 and books ₹ 6,200.

 

The solution for this question is as follows:

Income and Expenditure Account 

as on December 31, 2017

Dr.

Cr.

Expenditure

Amount

 ₹

Income

Amount

 ₹

General Expenses

900

Subscription

70,000

Salary

16,000

Add: Outstanding for 2017

20,000

90,000

Add: Outstanding for 2017

1,000

(100 members at ₹ 900 each)

17,000

Rent from use of hall

17,000

Less: Outstanding for 2016

(1,000)

16,000

Sale of Old News Papers

400

Profit from Entertainment

7,300

Loss on Sale of Old Books

1,200

Electricity Charges

7,800

Newspapers

600

Meeting Expenses

7,200

Postage

1,300

Surplus (Balancing figure)

79,700

1,14,700

1,14,700

Balance Sheet as on March 31, 2016

Liabilities

Amount

Assets

Amount

Salary Outstanding

1,000

Subscription Outstanding

3,600

Capital Fund (Balancing figure)

39,900

Furniture

2,600

Books

6,200

Cash and Bank

3,500

Building

25,000

40,900

40,900

Balance Sheet 

as on March 31, 2017

Liabilities

Amount

 ₹

Assets

Amount

 ₹

Advance Subscription

3,000

Subscription Outstanding

Salary Outstanding

1,000

2017

20,000

Add: 2016 (Still Outstanding)

1,600

21,600

Capital Fund

39,900

Building

25,000

Add: Surplus

79,700

1,19,600

Furniture

2,600

Add: Purchases

26,500

29,100

Books

6,200

Add: Purchases

13,000

19,200

Less: Sales

3,200

16,000

T.V. Set

16,000

Cash and Bank

15,900

1,23,600

1,23,600

18. Following is the Receipt and Payment Account of Women’s Welfare Club for the year ended December 31, 2017:

The solution for this question is as follows:

Receipt and Payment Account 

for the year ending December 31, 2017

Receipts

Amount

Payments

Amount

Balance b/d

7,250

Salary

12,500

Subscriptions

81,750

Stationery

1,700

Donations

 3,000

Electricity charges

9,550

Grant from Government

15,000

Insurance

7,500

Sale of newspapers

300

Equipments

30,000

Proceeds of charity show

16,500

Petty expenses

500

Interest on investments @ 10% for full year

7,000

Expenses on charity show

12,900

Sundries income

400

Newspapers

1,000

Lectures fee

16,500

Honorarium to Secretary

12,000

Balance c/d

27,050

1,31,200

1,31,200

Additional Information:

01.01.2017

31.12.2017

Outstanding salaries

1,200

1,800

Insurance prepaid

700

300

Subscription outstanding

3,750

2,500

Subscription received in advanced

1,750

1,000

Electricity charges outstanding

1,250

Stock of stationery

2,250

 700

Equipments

25,600

50,200

Building

1,20,000

1,14,000

Prepare Income and Expenditure Account for the year ended December 31, 2017 and Balance Sheet as on that date.

The solution for this question is as follows:

Books of Women Welfare Club

 Income and Expenditure Account 

as on December 31, 2017

Dr.

Cr.

Expenditure

Amount

Income

Amount

 ₹

Salary

12,500

Subscriptions

81,750

Add: O/s on Dec. 31, 2017

1,800

Add: O/s on Dec. 31, 2017

2,500

14,300

84,250

Less: O/s on Dec. 31, 2016

(1,200)

13,100

Less: O/s on Dec. 31, 2016

(3,750)

80,500

Stationery

1,700

Add: Advance on Dec. 31, 2016

1,750

Add: Opening Stock

2,250

82,250

3,950

Less: Advance on Dec.31, 2017

(1,000)

81,250

Less: Closing Stock

(700)

3,250

Donations

3,000

Electric Charges

9,550

Grant from Government

15,000

Add: O/s on Dec. 31, 2017

1,250

10,800

Sale of Newspapers

300

Profit from Charity show (16,500–12,900)

3,600

Insurance

7,500

Interest on Investments

7,000

Add: Prepaid in 2016

700

Sundries Income

400

8,200

Less: Prepaid in 2017

(300)

7,900

Depreciation on Equipments

5,400

Petty Expenses

500

Newspapers

1,000

Lectures Fee

16,500

Honorarium to Secretary

12,000

Depreciation on Building

6,000

Surplus (Balancing Figure)

34,100

1,10,550

1,10,550

Balance Sheet 

as on December 31, 2016

Liabilities

Amount

Assets

Amount

Outstanding Salaries

1,200

Insurance Prepaid

700

Subscription in Advance

1,750

Subscription Outstanding

3,750

Stock of Stationery

2,250

Capital Fund (Balancing Figure)

2,26,600

Equipments

25,600

Building

1,20,000

Cash and Bank

7,250

Investments {7,000 × (100/10)}

70,000

2,29,550

2,29,550

Balance Sheet 

as on December 31, 201

Liabilities

Amount

Assets

Amount

Outstanding Salaries

1,800

Equipments

25,600

Subscription in Advance

1,000

Add: Purchases

30,000

Electricity Charges Outstanding

1,250

55,600

Capital Fund

2,26,600

Less: Depreciation

(5,400)

50,200

Add: Surplus

34,100

2,60,700

Insurance Prepaid

300

Subscription Outstanding

2,500

Stock of Stationery

700

Building

1,20,000

Less: Depreciation

(6,000)

1,14,000

Cash and Bank

27,050

Investments

70,000

2,64,750

2,64,750

19. As at March 31, 2017 the following balances have been extracted from the books of the Indian Chartered Accountants Recreation Club and you are asked to prepare (1) Trading Account for ascertaining gross profit derived from running restaurant and dining room and (2) Income and Expenditure Account for the year ended March 31, 2017 (3) and a Balance Sheet as at that date.

Debit Balances

Credit Balances

Stock-in-hand

1170

Receipts Dining Room

87,660

Purchases

24,660

Subscriptions

9,450

Dining Room

32,370

Billiard’s Receipts

7,300

Rent

10,470

Sunday Receipts

410

Wages

18,690

Interest on Fixed Deposit

270

Repairs and Renewals

5,400

Sundry Creditors

 5310

Fuel and Light

5,280

Grant from Institute (permanent)

42,000

Misc. Expenses

4,050

Income and Exp. A/c (1.4.16)

1,380

Cash in hand

560

Suspense A/c (See note)

60

Cash at bank

2,760

Fixed Deposit

8,500

Sundry Debtors

2,250

China glass, cutlery and linen

600

Billiard Table

2,070

Fixtures and Fittings

870

Furniture

4,140

Club Premises

30,000

1,53,840

1,53,840

On March 31, 2016 stock of restaurant consisted of ₹ 900 and ₹ 60 respectively. Provide depreciations ₹ 60 on fixtures and fittings, ₹ 390 on billiard table and ₹ 560 on furniture.

The solution for this question is as follows:

Books of Indian Chartered Accountants Recreation Club

Restaurant Trading Account

Dr.

Cr.

Particulars

Amount

Particulars

Amount

Opening Stock

1,170

Receipts from Dining Room

87,660

Purchases

24,660

Closing Stock

960

Dining Room Exp.

32,370

Profit from Restaurant

30,420

88,620

88,620

Income and Expenditure Account 

as on March 31, 2017

Dr.

Cr.

Expenditure

Amount

 ₹

Income

Amount

Rent

10,470

Subscriptions

9,450

Wages

18,690

Sundry Receipts

410

Repairs an Renewals

5,400

Interest on Fixed Deposits

270

Fuel and Light

5,280

Profit from Restaurant

30,420

Misc. Expenses

4,050

Billiards Receipts

7,300

Depreciation on

Fixtures and Fittings

60

Billiards Table

390

Furniture

560

1,010

Surplus (Excess of Income over Expenditure)

2,950

47,850

47,850

Balance Sheet 

as on March 31, 2017

Liabilities

Amount

Assets

Amount

Sundry Creditors

5,310

Cash in Hand

560

Grant from Institute

42,000

Cash at Bank

2,760

Suspense

60

Fixed Deposit

8,500

Capital Fund (Income and Exp. A/c

as on Apr.01, 2016)

1,380

Sundry Debtors

2,250

Add: Surplus

2,950

4,330

China Glass, Cutlery and Linen

600

Billiards Table

2,070

Less: Depreciation

(390)

1,680

Fixture and Fittings

870

Less: Depreciation

(60)

810

Furniture

4,140

Less: Depreciation

(560)

3,580

Club Premises

30,000

Stock of Restaurant

960

51,700

51,700


Concepts covered in this chapter –

  • Meaning and characteristics of Non profit organisation
  • Accounting records of NPO
  • Balance sheet
  • Incidental trading activity
  • Income and expenditure account based on the trial balance
  • Income and Expenditure account

Conclusion

NCERT solutions for class 12 Accountancy chapter 1 provides a wide degree of illustrative examples; which assists the students to comprehend and learn quickly. The above mentioned are the illustrations for class 12 CBSE syllabus. For more solutions and study materials of NCERT solutions for class 12 Accountancy visit BYJU’S or download the app for more information.

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