Question

From the following Receipt and Payment Account of a club, prepare Income and Expenditure Account for the year ended December 31, 2006 and the Balance Sheet as on that date.

Receipt and Payment Account for the year ending December 31, 2006
Receipts		Amount Rs	Payments	Amount Rs
Balance b/d		3,500	General expenses	900
Subscription: 2005 2006 2007	1,800 70,000 3,000	75,000	Salary Postage Electricity charges Furniture	16,000 1,300 7,800 26,500
Sale of old Books		2,000	Books	13,000
(Costing Rs 3,200)			Newspapers	600
Rent from use of hall		17,000	Meeting expenses	7,200
Sale of newspapers		400	T.V. set	16,000
Profit from entertainment		7,300	Balance c/d	15,900
		1,05,200		1,05,200

Additional Information:

(a)	The club has 100 members each paying an annual subscription of Rs900. Subscriptions outstanding on December 31, 2005 were Rs 3,600.
(b)	On December 31, 2006 , salary outstanding amounted to Rs 1,000, Salary paid included Rs 1,000 for the year 2005.
(c)	On January 1, 2006 the club owned land and building Rs 25,000, furniture Rs 2,600 and books Rs 6,200.

Answer 1

Income and Expenditure Account as on December 31, 2006
Dr.					Cr.
Expenditure		Amount Rs	Income		Amount Rs
General Expenses		900	Subscription	70,000
Salary	16,000		Add: Outstanding for 2006	20,000	90,000
Add: Outstanding for 2006	1,000		(100 members at Rs 900 each)
17,000			Rent from use of hall		17,000
Less: Outstanding for 2005	(1,000)	16,000	Sale of Old News Papers		400
			Profit from Entertainment		7,300
Loss on Sale of Old Books		1,200
Electricity Charges		7,800
Newspapers		600
Meeting Expenses		7,200
Postage		1,300
Surplus (Balancing figure)		79,700
		1,14,700			1,14,700

Balance Sheet as on December 31, 2005
Liabilities	Amount Rs	Assets	Amount Rs
Salary Outstanding	1,000	Subscription Outstanding	3,800
Capital Fund (Balancing figure)	40,100	Furniture	2,600
		Books	6,200
		Cash and Bank	3,500
		Building	25,000
	41,100		41,100

Balance Sheet as on December 31, 2006
Liabilities		Amount Rs	Assets		Amount Rs
Advance Subscription		3,000	Subscription Outstanding
Salary Outstanding		1,000	2006	20,000
			Add: 2005 (Still Outstanding)	1,800	21,800
Capital Fund	40,100		Building		25,000
Add: Surplus	79,700	1,19,800	Furniture	2,600
			Add: Purchases	26,500	29,100
			Books	6,200
			Add: Purchases	13,000
			19,200
			Less: Sales	3,200
			T.V. Set
			Cash and Bank
		1,23,800			1,23,800

NOTE: In order to match the answer with that of given in the book, Subscription Outstanding on December 31, 2005 has been taken as Rs 3,800 instead of Rs 3,600.