Question

As at March 31,2008 the following balances have been extrated 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, 2008 (3) and a Balance Sheet as at that date.

Debit Balances	Rs	Credit Balances	Rs
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 (1.4.07)	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 31,2008 stock of restaurant consisted of Rs 900 and Rs 60 respectively. Provide depreciations Rs 60 on fixtures and fittings, Rs 390 on billiard table and Rs 560 on furniture.

Answer 1

Important Note:

1. Credit side of the Trial Balance of the question is short by Rs 60. Thus, in order to tally both sides of the Trial Balance, Suspense Account will be opened with the difference amount of Rs 60.

2. In the adjustment, Closing Stock should be Rs 960 instead of Rs 900.

Books of Indian Chartered Accountants Recreation Club Restaurant Trading Account
Dr.				Cr.
Particulars		Amount Rs	Particulars		Amount Rs
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, 2008
Dr.				Cr.
Expenditure		Amount Rs	Income	Amount Rs
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, 2008
Liabilities		Amount Rs	Assets		Amount Rs
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, 2007)	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