Question

Following is the Receipts and Payments Account of the Sumit Club and Resorts for the year ending 31st March, 2018.

$\begin{array}{cccc}\text{Receipts}& \text{Amount}& \text{Payments}& \text{Amount}\\ & \left(\text{Rs}\right)& & \left(\text{Rs}\right)\\ \text{To Balance b/d}& 44,000& \text{By Salaries}& 4,40,000\\ \text{To Subscription}& 9,80,000& \text{By Furniture puchased on}& \\ \text{To Entrance Fees}& 80,000& \text{1st October, 2017}& 1,00,000\\ \text{To Sports Fund}& 80,000& \text{By Sports Expenses}& 60,000\\ \text{To Sale of Drama Tickets}& 2,70,000& \text{By Drama Expenses}& 1,84,000\\ \text{To Sale of Waste Paper}& 2,500& \text{By Newspapers}& 2,500\\ \text{To Interest on Investment}& 20,000& \text{By Refreshments}& 32,000\\ (10\%on2,00,000)& & \text{By Lighting and Heating}& 60,000\\ & & \text{By Medicines Purchased}& 40,000\\ & & \text{By Balance c/d}& 5,58,000\\ \text{Total}& 14,76,500& \text{Total}& 14,76,500\end{array}$

Prepar Income and Expenditure Account for the year ending 31-03-2018, after taking into account the following adjustments :

(i) The Club has 2,000 members each paying an annual subscription of Rs 500 and the subscription of eighty members are still in arrears.

(ii) Stock of medicines as on 31st March, 2018 was Rs 10,000.

(iii) Salaries are paid @ Rs 40,000 per month.

(iv) Entrance fees is to be capitalised.

(v) Depreciate Furniture @ 10$\%$ p.a. ( taking into account Furniture on 1st April, 2017 was Rs 4,00,000).

Answer 1

INCOME AND EXPENDITURE ACCOUNT

for the year ending 31st March, 2018

$DrCr$
$\begin{array}{cccc}\text{Expenditure}& \text{Amount}& \text{Income}& \text{Amount}\\ & \left(\text{Rs}\right)& & \left(\text{Rs}\right)\\ \text{To Salaries}4,40,000& & \text{By Subscription}9,80,000& \\ Add:\text{Outstanding of}& & Add:\text{Outstanding of}& \\ \text{Current year}\underset{–}{40,000}& 4,80,000& \text{Current year}\underset{–}{20,000}& 10,00,000\\ \text{To Drama Expenses}& 1,84,000& \text{By Sale of Drama Tickets}& 2,70,000\\ \text{To Refreshments}& 32,000& \text{By Sale of Waste Paper}& 2,500\\ \text{To Lighting and Heating}& 60,000& \text{By Interest of Investment}& 20,000\\ \text{To Medicine Consumed}:& & & \\ \text{Purchased}40,000& & & \\ Less:\text{Closing Stock of}& & & \\ \text{Medicine}\underset{–}{10,000}& 30,000& & \\ \text{To Newspapers}& 2,500& & \\ \text{To Depreciation on}& & & \\ \text{Furniture}(1,00,000for& & & \\ 6months+4,00,000)\times 10\%& 45,000& & \\ \text{To Surplus}& & & \\ (\text{Excess of income over}& & & \\ \text{expenditure)}& 4,59,000& & \\ \text{Total}& 12,92,500& \text{Total}& 12,92,500\end{array}$