Question

From the following information, show the salaries item in the Income and Expenditure Account for the year ending 31st March, 2015 and in the Balance Sheet as at 31st March, 2014 and 31st March, 2015 :

An Extract of Receipts and Payments Account for the year ending 31st March, 2015
$\begin{array}{cccc}\text{Receipts}& \text{Rs}& \text{Payments}& \text{Rs}\\ & & \text{Salaries}& 2,00,000\end{array}$

Additional Information

Rs

(i) Salaries Outstanding on 31st March, 2014 18,000

(ii) Salaries Outstanding on 31st March, 2015 24,000

(iii) Salaries paid in advance on 31st March 2014 10,000

(iv) Salaries paid in advance on 31st March, 2015 15,000

Answer 1

Balance Sheet
as at 31st March, 2014
$\begin{array}{cccc}\text{Liabilities}& \text{Rs}& \text{Assets}& \text{Rs}\\ \text{Outstanding Salaries}& 18,000& \text{Prepaid Salaries (Paid in advance)}& 10,000\end{array}$

Income and Expenditure Account for the year ending 31st March, 2015
Dr. Cr.
$\begin{array}{ccccc}\text{Expenditure}& & \text{Rs}& \text{Income}& \text{Rs}\\ \text{Salaries}& 2,00,000& & & \\ \text{Less : Outstanding on}& & & & \\ \text{31st March, 2014}& \underset{–}{18,000}& & & \\ & 1,82,000& & & \\ \text{Add : Outstanding on}& & & & \\ \text{31st March 2015}& \underset{–}{24,000}& & & \\ & 2,06,000& & & \\ \text{Add : Paid in Advance}& & & & \\ \text{on 31st March, 2014}& \underset{–}{10,000}& & & \\ & 2,16,000& & & \\ \text{Less : Paid in Advance on}& & & & \\ \text{31st March, 2015}& \underset{–}{15,000}& 2,01,000& & \end{array}$

Balance Sheet
as at 31st March, 2015
$\begin{array}{cccc}\text{Liabilities}& \text{Rs}& \text{Assets}& \text{Rs}\\ \text{Outstanding Salaries}& 24,000& \text{Prepaid Salaries (Paid in advance)}& 15,000\end{array}$