At the start of the year, the balance sheet contained a balance for rent received in advance of Rs. 1,000. Rs. 15,000 was received throughout the year and at the year end, it was clear that Rs. 2,000 was still receivable for the year. Which of the following is the correct entry in the profit and loss account?

Rent Income of Rs. 15,000

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Rent Income of Rs. 16,000

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Rent Income of Rs. 17.000

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Rent Income of Rs. 18,000

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Solution

The correct option is D
Rent Income of Rs. 18,000

Rent Income
= Rent received + Rent outstanding + Opening rent received in advance

= Rs. 15,000 + Rs. 2,000 + Rs. 1,000

= Rs. 18,000

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Similar questions

Prepare a Trading and Profit and loss account for year ending December 31, 2010 from the balances extracted to M/s Rahul Sons. Also prepare a balance sheet at the end of the year.

$\begin{matrix} Account Title & Amt. (Rs.) & Account Title & Amt.(Rs) Opening Stock & 50, 000 & Sales & 1, 80, 000 Wages & 3, 000 & Purchase Return & 2, 000 Salary & 8, 000 & Discount Received & 500 Purchase & 1, 75, 000 & Provision for Bad Debts & 2, 500 Sales Return & 3, 000 & Capital & 3, 00, 000 Sundry Debtors & 82, 000 & Bills Payable & 22, 000 Discount Allowed & 1, 000 & Commission Received & 4, 000 Insurance & 3, 200 & Rent & 6, 000 Rent, Rates and Taxes & 4, 300 & Loan & 34, 800 Fixtures and Fittings & 20, 000 Trade Expenses & 1, 500 Bad Debts & 2, 000 Drawings & 32, 000 Repair and Renewals & 1, 600 Travelling Expenses & 4, 200 Postage & 300 Telegram Expenses & 200 Legal Fees & 500 Bills Receivable & 50, 000 Building & 1, 10, 000 ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 5, 51, 800 - -------- - - -------- - & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 5, 51, 800 - -------- - - -------- - \end{matrix}$

Adjustments:

1. Commission received in advance Rs. 1,000.

2. Rent received Rs. 2,000.

3. Salary outstanding Rs. 1,000 and insurance prepaid Rs. 800.

4. Further bad debts Rs. 1,000 and provision for bad debts @5% on debtors and discount on debtors @ 2%.

5. Closing stock Rs. 32,000.

6. Depreciation on building @ 6% pa.

Subscription received in cash during the year amounted to Rs. 60,000; subscription received in advance for next year was Rs. 3,000 and received in advance during the previous year was Rs. 2,000. Subscription in arrear at the end of the current year was Rs. 5,400. The amount credited to Income and Expenditure Account will be:

Subscription received in cash during the year amounted to Rs. 40,000; subscription outstanding at the end of the previous year was Rs. 1,500 and outstanding at the end of the current year was Rs. 2,000. Subscription received in advance for next year was Rs. 800. The amount credited to Income and Expenditure Account will be:

From the following trial balance of Varshney and Sons, prepare trading account and profit and loss account for the year ending 31st December, 2016 and a balance sheet as on that date.

$\begin{matrix} Particulars & Amt. (Rs.) & Particulars & Amt. (Rs.) Opening Stock & 10, 400 & Capital & 32, 000 Purchases & 31, 000 & Creditors & 4, 000 Sales Return & 600 & Sales & 40, 000 Debtors & 8, 000 & Commission & 5, 480 Building & 10, 000 & Rent & 4, 000 Machinery & 7, 200 Furniture & 3, 200 Bills Receivable & 4, 000 Salaries & 3, 200 Tax & 400 Insurance & 600 Carriage on Purchases & 1, 800 Trade Expenses & 600 Travelling Expenses & 880 Wages & 2, 000 Cash & 1, 600 ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 85, 480 - ------ - & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 85, 480 - ------ - \end{matrix}$

Adjustments:

(i) Closing stock Rs. 24,000

(ii) Rent due but not received Rs. 200.

(iii) Commission to the extent of Rs. 280 received in advance.

Following is the Receipt and Payment account of Rohatgi Trust :

Receipt and Payment Account for the year ending December 31, 2006
Receipts		Amount Rs	Payments	Amount Rs
Cash in hand		14,000	Rent	6,000
Cash at Bank		60,000	Salary	12,000
Subscriptions: 2005 2006 2007	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 old furniture (book value Rs 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, 2006, and a balance sheet as on that date after the following adjustments: Subscription for 2006, still owing were Rs 7,000. Interest due on defence

bonds was Rs7,000, Rent still owing was Rs 1,000. The Book value of investment sold was Rs 80,000, Rs 30,000 of the investment were still in hand. Subscription received in 2006 included Rs 400 from a life member. The total furniture on January 1, 2006 was worth Rs 12,000. Salary paid for the year 2007 is Rs 2,000.

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The correct option is D Rent Income of Rs. 18,000 Rent Income = Rent received + Rent outstanding + Opening rent received in advance = Rs. 15,000 + Rs. 2,000 + Rs. 1,000 = Rs. 18,000

The correct option is D
Rent Income of Rs. 18,000

Rent Income
= Rent received + Rent outstanding + Opening rent received in advance

= Rs. 15,000 + Rs. 2,000 + Rs. 1,000

= Rs. 18,000