Question

From the following information and Receipts and Payments Account of Delhi Medical Society, prepare Income and Expenditure Account for the year ended 31st March, 2018 and Balance Sheet as at that date.

RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31st March, 2018
Dr.					Cr.
Receipts		(₹)	Payments	(₹)
To Balance b/d		31,900	​By Rent	16,800
To Entrance Fees		5,500	By Wages	24,500
To Subscriptions		1,80,000	By Lighting Charges	7,200
To Donations		16,500	By Books	24,800
To Life Membership Fees		25,000	By Medicines (Polio Eradication Project)	1,00,000
To Government Grant (Polio Eradication Project)		2,00,000	By Salaries to Doctors(Polio Eradication Project)	80,000
To Proceeds of Seminar		23,200	By Office Expenses	45,000
To Interest on Deposits		2,400	By 8% Fixed Deposits	1,20,000
			(On 1st October, 2017)
			By Seminar Expenses	20,200
			By Cash in Hand	26,000
			By Bank A/c (Polio Eradication Project)	20,000
		4,84,500		4,84,500

Other information:
On 31st March, 2017, the club possessed books of ​₹ 2,00,000 and Furniture of ₹ 85,000. Provide depreciation on these assets @ 10% including the purchases during the year.
Subscriptions in arrears in the beginning of the year amounted to ₹ 3,500 and at the end of the year ₹ 5,500 were outstanding.
​The Club paid three months' rent in advance both in the beginning and at the end of the year.

Answer 1

Books of Delhi Medical Society Income and Expenditure Account for the year ended March 31, 2018
Dr.							Cr.
Expenditure			Amount (₹)	Income			Amount (₹)
Rent		16,800		Entrance Fees			5,500
Add: Advance in the beginning		4,200		Subscriptions		1,80,000
Less: Advanced at the end		(4,200)	16,800	Add: Arrears at the end		5,500
Wages			24,500	Less: Arrears in the beginning		(3,500)	1,82,000
Lighting Charges			7,200	Donations			16,500
Office Expenses			45,000	Interest on Deposits		2,400
Depreciation on:				Add: Accrued Interest		2,400	4,800
Furniture		8,500		Profit from Seminar:
Books		22,480	30,980	Proceeds		23,200
Surplus (Balancing Figure)			87,320	Less: Expenses		(20,200)	3,000
			2,11,800				2,11,800

Balance Sheet as on April 01, 2017
Liabilities	Amount (₹)	Assets	Amount (₹)
		Advance Rent	4,200
		Subscription-in-Arrears	3,500
		Books	2,00,000
Capital Fund (Balancing Figure)	3,24,600	Furniture	85,000
		Cash in Hand	31,900
	3,24,600		3,24,600

Balance Sheet as on March 31, 2018
Liabilities		Amount (₹)	Assets		Amount (₹)
			Subscription-in-Arrears		5,500
			Advance Rent		4,200
			Books	2,00,000
Government Grant	2,00,000		Add: Purchase	24,800
Less: Medicines	1,00,000			2,24,800
Less: Salaries	80,000	20,000	Less: 10% Depreciation	(22,480)	2,02,320
Capital Fund	3,24,600		Furniture	85,000
Add: Surplus	87,320		Less: 10% Depreciation	8,500	76,500
Add: Life Membership	25,000	4,36,920	Cash in Hand		26,000
			Cash at Bank		20,000
			8% Fixed Deposit	1,20,000
			Add: Accrued Interest	2,400	1,22,400
		4,56,920			4,56,920

Working Note:

Calculation of Interest Accrued on Fixed Deposits

Interest on Fixed Deposits (1,20,000 × 8% × 6/12)	4,800
Less: Interest Received	(2,400)
Interest Accrued on Fixed Deposits	2,400