Following Receipt and Payment Account was prepared from the cash book of Delhi CharitableTrust for the year ending December 31, 2007.

Prepare Income andexpenditure account for the year ended December 31, 2007, and balance sheet as on that date after the following adjustments:
(a) It was decided to treat one-third of the amount received on account of donation as income.
(b) Insurance premium was paid in advance for three months. (c) Interest on investment Rs1,100 accrued was not received.
(d) Rent Rs600: salary Rs900 and advertisement expenses Rs1,000 outstanding as on December 31, 2007.

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Solution

Note:
1. As per the solution, Surplus and the total of the Closing Balance Sheet are Rs 21,400 and Rs 72,000 respectively; however as per the answer given in the book is Rs 21,500 and Rs 72,100. Thus, in order to match the answer with that of the book, Rent paid of Rs 2,000 is assumed for 12 months instead of 15 months.
2. The question asks us to prepare Income and Expenditure Account for the year ended December 31, 2006; however, the solution has been prepared according to the date of Receipt and Payment Account which is December 31, 2007.

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Following Receipt and Payment Account was prepared from the cash book of Delhi Charitable Trust for the year ending December 31, 2007

Receipt and Payment Account for the year ending December 31, 2007
Receipts	Amount Rs	Payments	Amount Rs
Balance b/d		Charity	11,500
Cash in Hand	11,500	Rent and taxes	3,200
Cash at Bank	12,600	Salary	6,000
Donation	9,000	Printing	600
Subscription	42,800	Postage	300
Legacies	18,000	Advertisements	4,500
Interest on investment	4,500	Insurances	2,000
Sale of old newspapers	200	Furniture	21,600
		Investment	23,000
		Balance c/d:
		Cash in Hand	9,900
		Cash at Bank	16,000
	98,600		98,600

Prepare Income and expenditure account for the year ended December 31, 2006, and a balance sheet as on that date after the following adjustments:

(a)	It was decided to treat one-third of the amount received on account of donation as income.
(b)	Insurance premium was paid in advance for three months.
(c)	Interest on investment Rs1,100 accrued was not received.
(d)	Rent Rs600: salary Rs900 and advertisement expenses Rs1,000 outstanding as on December 31, 2007.

Q. Following Receipts and Payments Account was prepared from the Cash Book of Delhi Charitable Trust for the year ending 31st March , 2018:

RECEIPTS AND PAYMENTS ACCOUNT
Dr.				Cr.
Receipts	₹	Payments	₹
To Balance b/d:		By Charity	1,15,000
Cash in Hand	1,15,000	By Rent and Taxes	32,000
Cash at Bank	1,26,000	By Salary	60,000
To Donations	90,000	By Printing	6,000
To Subscriptions	4,28,000	By Postage	3,000
To Legacies	1,80,000	By Advertisements	45,000
To Interest on Investment	45,000	By Insurance	20,000
To Sale of old Newspaper	2,000	By Furniture	2,16,000
		By Investment	2,30,000
		By Balance c/d:
		Cash in Hand	99,000
		Cash at Bank	1,60,000


	9,86,000		9,86,000

Prepare Income and Expenditure Account for the year ended 31st March , 2018 , and Balance Sheet as on that date after the following adjustments:
(i) Insurance premium was paid in advance for three months.
(ii) Interest on investment ₹ 11,000 accrued was not received.
(iii) Rent ₹6,000; Salary ₹9,000 and advertisement expenses ₹ 10,000 outstanding as on 31st March, 2018.

Prepare Income and Expenditure Account and Balance Sheet for the year ended December 31, 2006 from the following Receipt and Payment Account and Balance Sheet of culture club:

Receipt and Payment Account for the year ending December 31, 2006
Receipts		Amount Rs	Payments	Amount Rs
Opening cash balance		12,000	Furniture	4,000
Subscription			Telephone expenses	800
2005	2,000		Salary
2006	22,000	24,000	2005	1,000
Entrance fees		2,800	2006	4,000
Locker rent		1,000	Newspapers	700
Life membership fee		1,200	Sundry expenses	1,000
Government grant		11,000	Defence bonds	18,000
			Land	20,000
			Closing cash balance	2,500
		52,000		52,000

Balance Sheet for the year ending December 31, 2005
Liabilities	Amount Rs	Assets	Amount Rs
Advance locker rent	200	Cash in hand	12,000
Subscription Received in Advance	1,000	Outstanding Expenses	3,000
Outstanding salary	2,000	Building	35,000
Loan	10,000
Capital fund	36,800
	50,000		50,000

Following is the Receipt and Payment Account of Women’s Welfare Club for the year ended December 31, 2007:

Receipt and Payment Account for the year ending December 31, 2007
Receipts	Amount Rs	Payments	Amount Rs
Balance b/d	7,250	Salary	12,500
Subscriptions	81,750	Stationery	1,700
Donations	3,000	Electricity charges	9,550
Grant from Government	15,000	Insurance	7,500
Sale of newspapers	300	Equipments	30,000
Proceeds of charity show	16,500	Petty expenses	500
Interest on investments @ 10% for full year	7,000	Expenses on charity show	12,900
Sundries income	400	Newspapers	1,000
		Lectures fee	16,500
		Honorarium to Secretary	12,000
		Balance c/d	27,050
	1,31,200		1,31,200

Additional Information:

	01.01.2007 Rs	31.12.2007 Rs
Outstanding salaries	1,200	1,800
Insurance prepaid	700	300
Subscription outstanding	3,750	2,500
Subscription received in advanced	1,750	1,000
Electricity charges outstanding	—	1,250
Stock of stationery	2,250	700
Equipments	25,600	50,200
Building	1,20,000	1,14,000

Prepare Income and Expenditure Account for the year ended December 31, 2007 and Balance Sheet as on that date.

Following is the Receipt and Payment Account of Indian Sports Club, prepared Income and Expenditure Account, Balance Sheet as on December 31, 2006:

Receipt and Payment Account for the year ending December 31, 2006
Receipts	Amount Rs	Payments	Amount Rs
Balance b/d	7,890	Salary	11,000
Subscriptions	52,000	Electric charges	5,500
Life member ship fee	2,200	Billiard Table	17,500
Entrance fee	3,200	Office expenses	4,100
Tournament fund	26,000	Printing and Stationery	2,300
Locker Rent	1,250	Tournament expenses	18,500
Sale of old sports goods (Costing Rs 2,200)	2,500	Repair of ground	2,000
Sale of Old Newspaper	750	Furniture purchased	7,700
Legacy	37,500	Sports equipments	12,000
		Cash in Hand	12,690
		Cash at Bank	10,000
		Fixed Deposit (on 1.10.06 for 10% p.a)	30,000

	1,33,290		1,33,290

Other Information:

Subscription outstanding was on December 31, 2005 Rs 1,200 and Rs 3,200 on December 31, 2006. Locker rent outstanding on December 31, 2006 Rs 250. Salary outstanding on December 31, 2006 Rs 1,000.

On January 1, 2006, club has Building Rs 36,000, furniture Rs 12,000, Sports equipments Rs 17,500. Depreciation charged on these items @ 10% (including Purchase).

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