Question

Following is the Receipts and Payments Account of M.B. Club and from the given information, show how the item will be shown in Income and Expenditure Account and in Balance Sheet.

RECEIPTS AND PAYMENTS ACCOUNT
Dr. for the year ending 31st March, 2018 Cr.
$\begin{array}{cccccc}\text{Receipts}& \text{Amount}& \text{Payments}& & & \text{Amouont}\\ & \text{(Rs)}& & & & \text{(Rs)}\\ & & \text{By Salaries}& & & \\ & & & 2016-17& 30,000& \\ & & & 2017-18& 3,00,000& \\ & & & 2018-19& 18,000& 3,48,000\end{array}$

Additional Information :

(i) Salaries outstanding on 31st March, 2017 Rs 35,000.

(ii) Salaries for the year to be paid Rs 3,45,000.

(iii) Salaries paid in advance on 1-04-2017 Rs 10,000.

Answer 1

BALANCE SHEET
as at 31-03-2017
$\begin{array}{cccc}\text{Liabilities}& \text{Amount}& \text{Assets}& \text{Amount}\\ & \text{(Rs)}& & \text{(Rs)}\\ \text{Outstanding Salary}& 35,000& \text{Prepaid Salary}& 10,000\end{array}$

INCOME AND EXPENDITURE ACCOUNT
Dr. for the year ending 31-03-2018 Cr.
$\begin{array}{cccc}\text{Expenditure}& \text{Amount}& \text{Income}& \text{Amount}\\ & \text{(Rs)}& & \text{(Rs)}\\ \text{To Salary}3,48,000& & & \\ \text{(-)Outstanding of 2017}(30,000)& & & \\ \text{(+)Outstanding of 2018}45,000& & & \\ \text{(+) Advance of 2017}10,000& & & \\ \text{(-) Advance of 2018}\underset{–}{(18,000)}& \underset{–}{3,55,000}& & \underset{–}{}\\ & & & \end{array}$

BALANCE SHEET
as at 31-03-2018
$\begin{array}{ccccc}\text{Liabilities}& & \text{Amount}& \text{Assets}& \text{Amount}\\ & & \text{(Rs)}& & \text{(Rs)}\\ \text{Outstanding Salary 2017}& 5,000& & \text{Advance Salary}& 18,000\\ \text{(+)Outstanding Salary of 2018}& 45,000& 50,000& & \end{array}$