Question

Following is the Receipt and Payment Account of Indian Sports Club for the year ended 31-3-2014 :

$\begin{array}{cccc}\text{Receipts}& \text{Rs}& \text{Payments}& \text{Rs}\\ \text{Balance b/d}& 10,000& \text{Salary}& \text{15,000}\\ \text{Subscriptions}& 52,000& \text{Billiard Table}& 20,000\\ \text{Entrance Fee}& 5,000& \text{Office Expenses}& 6,000\\ \text{Tournament Fund}& 26,000& \text{Tournament Expenses}& 31,000\\ \text{Sale of old newspapers}& 1,000& \text{Sports Equipment}& 40,000\\ \text{Legacy}& 37,000& \text{Balance c/d}& 19,000\\ & \underset{–}{\overline{1,31,000}}& & \underset{–}{\overline{1,31,000}}\end{array}$

Other Information :

On 31-3-2014 Subscription outstanding was Rs 2,000 and on 31-3-2013 subscription outstanding was Rs 3,000 Salary outstanding on 31-3-2014 was Rs 1,500.

On 1-4-2013 the club had building Rs 75,000, furniture Rs 18,000, 12% investment Rs 30,000 and sports equipment Rs 30,000. Depreciation charged on these items including Billiard Table was 10%.

Prepare Income and Expenditure Account of the Club for the year ended 31-3-2014 and a Balance Sheet as at that date.

Answer 1

Income and Expenditure Account for the year ended March 31, 2014
Dr. Cr.
$\begin{array}{cccccc}\text{Expenditure}& & \text{Rs}& \text{Income}& & \text{Rs}\\ \text{Salary}& 15,000& & \text{Subscriptions}& 52,000& \\ \text{Add : Outstanding}& & & \text{Less : Subscription}& & \\ \text{(31-3-2014)}& \underset{–}{1,500}& 16,500& \text{Outstanding}& & \\ \text{Office Expenses}& & 6,000& \text{(31-3-2013)}& \underset{–}{3,000}& \\ \text{Tournament Expenses}& & & & 49,000& \\ {\text{(31,000 - 26,000)}}^{\left(1\right)}& & 5,000& \text{Add : Subscription}& & \\ \text{Depreciation on :}& & & \text{Outstanding}& & \\ \text{Building (}10\%\text{of}& & & \text{(31-3-2014)}& \underset{–}{2,000}& 51,000\\ \text{Rs 75,000)}& 7,500& & \text{Entrance Fees}& & 5,000\\ \text{Furniture(}10\%\text{of}& & & \text{Sale of Old Newspapers}& & 1,000\\ \text{Rs 18,000}& 1,800& & \text{Accrued Interest on}& & \\ \text{Billiard Table (}10\%& & & \text{Investment @}12\%\text{on}& & \\ \text{Rs 20,000)}& 2,000& & \text{Rs 30,000}& & 3,600\\ \text{Sports Equipment}& & & & & \\ \text{(}10\%\text{of Rs 70,000)}& \underset{–}{7,000}& 18,300& & & \\ \text{Excess of Income Over}& & & & & \\ \text{Expenditure, i.e., Surplus}& & 14,800& & & \\ & & \underset{–}{\overline{60,600}}& & & \underset{–}{\overline{60,600}}\end{array}$

Note (1) Funds available in Tournament Fund are Rs 26,000 whereas Tournament expenses are Rs 31,000. Hence, the excess of Tournament expenses over Tournament Fund, i.e., Rs 5,000 are debited to Income and Expenditure Account.

Balance Sheet
as at March 31, 2013
$\begin{array}{cccc}\text{Liabilities}& \text{Rs}& \text{Assets}& \text{Rs}\\ \text{Capital Fund (Balancing figure)}& 1,66,000& \text{Cash in Hand}& 10,000\\ & & \text{Subscription Outstanding}& 3,000\\ & & \text{Building}& 75,000\\ & & \text{Furniture}& 18,000\\ & & 12\%\text{Investment}& 30,000\\ & & \text{Sports Equipment}& 30,000\\ & \underset{–}{\overline{1,66,000}}& & \underset{–}{\overline{1,66,000}}\end{array}$

Balance sheet
as at March 31, 2014
$\begin{array}{cccccc}\text{Liabilities}& & \text{Rs}& \text{Assets}& & \text{Rs}\\ \text{Outstanding Salary}& & 1,500& \text{Cash in Hand}& & 19,000\\ \text{Legacy}& & 37,000& \text{Subscription Outstanding}& & 2,000\\ \text{Capital Fund}& 1,66,000& & \text{Building}& 75,000& \\ \text{Add : Surplus}& \underset{–}{14,800}& 1,80,800& \text{Less : Depreciation}& \underset{–}{7,500}& 67,500\\ & & & \text{Furniture}& 18,000& \\ & & & \text{Less : Depreciation}& \underset{–}{1,800}& 16,200\\ & & & \text{Billiard Table}& 20,000& \\ & & & \text{Less : Depreciation}& \underset{–}{2,000}& 18,000\\ & & & 12\%\text{Accrued Interest on Investment}& & 3,600\\ & & & \text{Sports Equipment}& & \\ & & & \text{(30,000 + 40,000)}& 70,000& \\ & & & \text{Less : Depreciation}& \underset{–}{7,000}& 63,000\\ & & \underset{–}{\overline{2,19,300}}& & & \underset{–}{\overline{2,19,300}}\end{array}$