Question

Extracts of Receipts and Payments Account for the year ended March 31, 2016 are given below :

$\begin{array}{cccc}\text{Receipts}& \text{Rs}& \text{Payments}& \text{Rs}\\ \text{Subscriptions:}& & & \\ 2014-15& 3,000& & \\ 2015-16& 96,000& & \\ 2016-17& 2,500& & \\ & \underset{–}{\overline{1,01,500}}& & \end{array}$

Rs

Subscriptions Outstanding as on March 31, 2015: 5,000

Total Subscriptions Outstanding as on March 31, 2016: 12,000

Subscriptions received in advance as on March 31, 2015: 2,800

Calculate the amount of subscriptions to be shown on the income side of Income and Expenditure A/c and show the relevant data in the balance sheet as at 31st March 2015 and 2016.

Answer 1

Income and Expenditure Account
for the year ending March 31, 2016
Dr. Cr.
$\begin{array}{ccccc}\text{Expenditure}& \text{Rs}& \text{Income}& & \text{Rs}\\ & & \text{Subscriptions}& & \\ & & \text{(Received for 2015-16)}& 96,000& \\ & & \text{Add :}\text{Outstanding for}& & \\ & & 2015-16& & \\ & & \text{(See Note 1)}& 10,000& \\ & & \text{Add :}\text{Received in}& & \\ & & \text{advance for}& & \\ & & 2015-16& \underset{–}{2,800}& 1,08,800\end{array}$

Balance Sheet
as at 31st March, 2015
$\begin{array}{cccc}\text{Liabilities}& \text{Rs}& \text{Assets}& \text{Rs}\\ \text{Subscriptions received in advance}& 2,800& \text{Subscriptions Outstanding}& 5,000\end{array}$

Balance Sheet
as at 31st March, 2016
$\begin{array}{ccccc}\text{Liabilities}& \text{Rs}& \text{Assets}& & \text{Rs}\\ \text{Subscriptions received in advance}& 2,500& \text{Subscriptions Outstainding :}& & \\ & & \text{For 2014-15 (5,000-3,000)}& 2,000& \\ & & \text{For 2015-16}& \underset{–}{10,000}& 12,000\end{array}$

Note (1) : Total subscriptions outstanding on 31st March 2016 are Rs 12,000. This includes Rs 2,000 (i.e., Rs 5,000 - Rs 3,000) for subscriptions still outstanding for 2014-15. Hence, the subscriptions outstanding for 2015-16 are Rs 10,000 (i.e., Rs 12,000 - Rs 2,000).