Question

From the following information of a not for profit organisation, show the 'sports material' items in the 'Income and Expenditure Account' for the year ending 31st March, 2017 and the Balance Sheets as at 31st March 2016 and 31st March 2017 :

$\begin{array}{ccc}& \text{31-3-2016}& \text{31-3-2017}\\ & \text{Rs}& \text{Rs}\\ \text{Stock of sports material}& 2,200& 5,800\\ \text{Creditors for sports material}& 7,800& 9,200\\ \text{Advance to Suppliers for sports material}& 15,000& 25,000\end{array}$

Payment to suppliers for the sports material during the year was Rs 1,20,000, there were no cash purchases made.

Answer 1

Income and Expenditure Account
for the year ending on 31st March, 2017 Dr. Cr.
$\begin{array}{cccc}\text{Expenditure}& \text{Rs}& \text{Income}& \text{Rs}\\ \text{Sports Materials Consumed}& & & \\ \text{(See Working Notes)}& 1,07,800& & \end{array}$

Balance Sheet
as at 31st March, 2016
$\begin{array}{cccc}\text{Liabilities}& \text{Rs}& \text{Assets}& \text{Rs}\\ \text{Creditors for Sports Material}& 7,800& \text{Stock of Sports Material}& 2,200\\ & & \text{Advance to Suppliers}& 15,000\end{array}$

Balance Sheet
as at 31st March, 2017
$\begin{array}{cccc}\text{Liabilities}& \text{Rs}& \text{Assets}& \text{Rs}\\ \text{Creditors for Sports Material}& 9,200& \text{Stock of Sports Material}& 5,800\\ & & \text{Advance to Suppliers}& 25,000\end{array}$

Working Notes :

$\begin{array}{ccc}& & \text{Rs}\\ \text{Payment made for purchase of sports material}& & 1,20,000\\ \text{Less :}\text{Creditors in the beginning}& & 7,800\\ \text{Advance to suppliers of sports material on 31-3-2017}& \underset{–}{25,000}& \underset{–}{32,800}\\ & & 87,200\\ \text{Add :}\text{Creditors at the end}& & 9,200\\ \text{Advance to suppliers of sports material on 31-3-2016}& \underset{–}{15,000}& \underset{–}{24,200}\\ \text{Purchases of sports material during the year 2016-17}& & 1,11,400\\ \text{Add :}\text{Stock in the beginning}& & \underset{–}{2,200}\\ & & 1,13,600\\ \text{Less :}\text{Stock at the end}& & 5,800\\ \text{Sports Material Consumed during 2016-17 to be taken}& & \\ \text{to the Dr. side of Income}\&\text{Expenditure A/c}& & \underset{–}{\overline{1,07,800}}\end{array}$

Alternatively, amount of sports material consumed during 2016-17 can be calculated by preparing the following two accounts :

(i)

Creditors for Sports Material Account Dr. Cr.
$\begin{array}{cccc}& \text{Rs}& & \text{Rs}\\ \text{Balance b/d}& & \text{Balance b/d}& \\ \text{(Advance in the beginning)}& 15,000& \text{(Creditors in the beginning)}& 7,800\\ \text{Bank A/c (payment made}& & \text{Stock of Sports Material A/c}& \\ \text{for sports material during}& & \text{(Balancing figure, being}& \\ \text{2016-17)}& 1,20,000& \text{purchases of Sports Material}& \\ \text{Balance c/d}& & \text{during the year 2016-17)}& 1,11,400\\ \text{(Creditors at the end)}& 9,200& \text{Balance c/d}& \\ & & \text{(Advance at the end)}& 25,000\\ & \underset{–}{\overline{1,44,200}}& & \underset{–}{\overline{1,44,200}}\end{array}$

Stock of Sports Material Account Dr. Cr.
$\begin{array}{cccc}& \text{Rs}& & \text{Rs}\\ \text{Balance b/d}& 2,200& \text{Income}\&\text{Expenditure A/c}& \\ \text{Creditors for Sports Material}& & \text{(Balancing figure, being}& \\ \text{A/c (Purchases transferred}& & \text{Sports Material consumed}& \\ \text{from Creditors A/c)}& 1,11,400& \text{during the year 2016-17)}& 1,07,800\\ & & \text{Balance c/d}& 5,800\\ & \underset{–}{\overline{1,13,600}}& & \underset{–}{\overline{1,13,600}}\end{array}$