Question

Following is the receipts and payments account of Modern Club, New Delhi for the year ending 31st March, 2014 :

$\begin{array}{cccc}\text{Receipts}& \text{Rs}& \text{Payments}& \text{Rs}\\ \text{Balance b/d on 1-4-2013}& 2,300& \text{Match Expenses}& 6,800\\ \text{Subscriptions}& 56,400& \text{Rent}& 9,600\\ \text{Interest}& 300& \text{Salaries}& 24,000\\ \text{Donation}& 6,000& \text{Sundry Expenses}& 3,600\\ \text{Donations for Building Fund}& 50,000& \text{Investments Purchased}& 30,000\\ \text{Match Fund}& 10,000& \text{Newspapers}& 750\\ \text{Miscellaneous receipts}& 430& \text{Sports Equipments}& 32,000\\ \text{Sale of Grass}& 100& \text{Balance c/d on 31-3-2014}& 18,780\\ & \underset{–}{\overline{1,25,530}}& & \underset{–}{\overline{1,25,530}}\end{array}$

Subscriptions outstanding on 31st March, 2013 were Rs 4,000 and on 31st March, 2014 were Rs 6,000. Salaries outstanding on 31st March, 2013 and on 31st March, 2014 were Rs 2,000 and Rs 2,500 respectively.

On 31st March, 2013, the Club had Investments worth Rs 12,000; Furniture Rs 10,000 and sports equipments valued at Rs 20,000.

Prepare Income & Expenditure A/c for the year ended 31st March, 2014 and a Balance Sheet as at that date after depreciating furniture by 20% and sports equipments by 25%.

Answer 1

Balance Sheet
as at 31st March, 2013
$\begin{array}{cccc}\text{Liabilities}& \text{Rs}& \text{Assets}& \text{Rs}\\ \text{Outstanding Salaries}& 2,000& \text{Cash in hand}& 2,300\\ \text{Capital Fund (Balancing figure)}& 46,300& \text{Outstanding Subscriptions}& 4,000\\ & & \text{Investments}& 12,000\\ & & \text{Furniture}& 10,000\\ & & \text{Sports Equipments}& 20,000\\ & \underset{–}{\overline{48,300}}& & \underset{–}{\overline{48,300}}\end{array}$

Income and Expenditure Account
for the year ending 31st March, 2014 Dr. Cr.
$\begin{array}{cccccc}\text{Expenditure}& & \text{Rs}& \text{Income}& & \text{Rs}\\ \text{Rent}& & 9,600& \text{Subscriptions}& 56,400& \\ \text{Salaries}& 24,000& & \text{Less : Outstanding}& & \\ \text{Less : Outstanding}& & & \text{Subscriptions for 2013}& \underset{–}{4,000}& \\ \text{Salaries for 2013}& \underset{–}{2,000}& & & 52,400& \\ & 22,000& & \text{Add : Outstanding Subs-}& & \\ \text{Add : Outstanding}& & & \text{criptions for 2014}& \underset{–}{6,000}& 58,400\\ \text{Salaries for 2014}& \underset{–}{2,500}& 24,500& \text{Interest}& & 300\\ \text{Sundry Expenses}& & 3,600& \text{Donation}& & 6,000\\ \text{Newspapers}& & 750& \text{Miscellaneous receipts}& & 430\\ \text{Depreciation on :}& & & \text{Sales of Grass}& & 100\\ \text{Furniture}& 2,000& & & & \\ {\text{Sports Equipments}}^{\left(1\right)}& \underset{–}{13,000}& 15,000& & & \\ \text{Excess of Income over}& & & & & \\ \text{expenditure (Surplus)}& & 11,780& & & \\ & & \underset{–}{65,230}& & & \underset{–}{65,230}\end{array}$

Balance Sheet
as at 31st March, 2014
$\begin{array}{cccccc}\text{Liabilities}& & \text{Rs}& \text{Assets}& & \text{Rs}\\ \text{Outstanding Salaries}& & 2,500& \text{Cash in hand}& & 18,780\\ \text{Match Fund}& 10,000& & \text{Outstanding Subscriptions}& & 6,000\\ \text{Less : Match Expenses}& \underset{–}{6,800}& 3,200& \text{Investments}& 12,000& \\ & & & \text{Add : Additions}& \underset{–}{30,000}& 42,000\\ {\text{Donation for Building Fund}}^{\left(3\right)}& & 50,000& \text{Furniture}& 10,000& \\ \text{Capital Fund}& 46,300& & \text{Less : Depreciation}& \underset{–}{2,000}& 8,000\\ \text{Add : Surplus}& \underset{–}{11,780}& 58,080& \text{Sports Equipments}& 20,000& \\ & & & \text{Add : Additions}& \underset{–}{32,000}& \\ & & & & 52,000& \\ & & & \text{Less : Depreciation}& \underset{–}{13,000}& 39,000\\ & & \underset{–}{\overline{1,13,780}}& & & \underset{–}{\overline{1,13,780}}\end{array}$

Notes :- (1) Since the date of purchase of Sports Equipments is not given in the question, depreciation will be charged for the full year.

(2) Since a 'Match Fund' is given in the question, 'Match Expenses' will be deducted from it and the balance will appear on the liability side of the balance sheet.

(3) 'Donation for Building Fund' will be shown on the liabilities sides, because it has been received for a specific purpose.