Question

From the following Receipts and Payments Account of Mumbai Club, prepare Income and Expenditure Account for the year ended 31-12-2012 and its balance Sheet as on that date.

RECEIPTS AND PAYMENT ACCOUNT

for the year ending on 31st December, 2012

$\begin{array}{cccc}\text{Receipts}& \text{Amount}& \text{Payments}& \text{Amount}\\ & \left(\text{Rs}\right)& & \left(\text{Rs}\right)\\ \text{Cash in Hand}& 4,000& \text{Salary}& 2,000\\ \text{Cash at Bank}& 10,000& \text{Repair Expenses}& 500\\ \text{Donations}& 5,000& \text{Purchase of Furniture}& 6,000\\ \text{Subscriptions}& 12,000& \text{Miscellaneous Expenses}& 500\\ \text{Entrance Fees}& 1,000& \text{Purchase of Investments}& 6,000\\ \text{Interest on Investments}& 100& \text{Insurance Premium}& 200\\ \text{Interest Received from Bank}& 400& \text{Billiard Table}& 8,000\\ \text{Sale of Old Newspapers}& 150& \text{Paper, Ink, etc.}& 150\\ \text{Sale of Drama Tickets}& 1,050& \text{Drama Expenses}& 500\\ & & \text{Cash in Hand}\left(\text{Closing}\right)& 2,650\\ & & \text{Cash at Bank}\left(\text{Closing}\right)& 7,200\\ & \overline{33,700}& & \overline{33,700}\end{array}$

Information :

(a) Subscriptions in arrears for 2012 Rs 900 and subscription in advance for 2013 Rs 350.

(b) Insurance premium outstanding Rs 40.

(c) Miscellaneous expenses prepaid Rs 90. (d) 50$\%$ of donation is to be capitalised.

(e) Entrance fees are to be treated asrevenue income.

(f) 8$\%$ interest has accrued on investment for five months.

(g) Billiard table costing Rs 30,000 was purchased during the last year and Rs 22,000 were paid for it.

Answer 1

~~~~~~~~~~~~~~~~~~~~~~~~~INCOME AND EXPENDITURE ACCOUNT\\
\text{Dr}~~~~~~~~~~~~~~~~~for the year ended 31st December, 2012~~~~~~~~~~~~~~~~~~~~~~~~\text{Cr}\\
$\begin{array}{cccc}\text{Expenditure}& \text{Amount}& \text{Income}& \text{Amount}\\ & \left(\text{Rs}\right)& & \left(\text{Rs}\right)\\ \text{To Salary}& 2,000& \text{By Subscriptions}12,000& \\ \text{To Repair Expenses}& 500& \text{Add}:\text{Outstanding}900& \\ \text{To Misc. Expenses}500& & \text{in beginning}\overline{12,900}& \\ \text{Less:Prepaid}90& 410& \text{Less:Advance at end}\underset{–}{350}& 12,550\\ \text{To Insurance Premium}\overline{200}& & \text{By Entrance Fees}& 1,000\\ \text{Add:Outstanding}\underset{–}{40}& 240& \text{By interest on Investment}& 300\\ \text{To Paper, Ink, etc.}& 150& (\text{Rs}100+\text{Rs}200)& \\ \text{To Drama Expenses}& 500& \text{By Sale of Drama Tickets}& 1,050\\ \text{To Surplus-Excess of Income}& & \text{By Interest received from}& \\ \text{over Expenditure}& 14,150& \text{Bank}& 400\\ & & \text{By Sale of Newspaper}& 150\\ & & \text{By Donation}5,000& \\ & & \text{Less : Capitalised}\left(50\%\right)\underset{–}{2,500}& \underset{–}{2,500}\\ & \overline{17,950}& & \underset{–}{17,950}\end{array}$

BALANCE SHEET OF MUMBAI CLUB

as at 31st December, 2012

$\begin{array}{cccc}\text{Liabilities}& \text{Amount}& \text{Assets}& \text{Amount}\\ & \left(\text{Rs}\right)& & \left(\text{Rs}\right)\\ \text{Outstanding Expenses}& 40& \text{Billiards Table}& 30,000\\ \text{Subscription in Advance}& 350& \text{Furniture}& 6,000\\ \text{Capital Fund}36,000& & \text{Prepaid Expenses}(Misc.)& 90\\ \text{Add:Surplus}14,150& & \text{Subscription Receivable}& 900\\ \text{Donations}\overline{2,500}& 52,650& \text{Investments}& 6,000\\ & & \text{Interest Accrued}& 200\\ & & \text{Bank Balance}& 7,200\\ & & \text{Cash in Hand}& 2,650\\ & \overline{53,040}& & \overline{53,040}\end{array}$

Working Note:

Calculation of Poening Capital Fund.

BALANCE SHEET OF MUMBAI CLUB
as at 1st January, 2012
$\begin{array}{cccc}\text{Liabilities}& \text{Amount}& \text{Assets}& \text{amount}\\ & \left(Rs\right)& & \left(Rs\right)\\ \text{Creditors for Billiards Table}& 8,000& \text{Billiards Table}& 30,000\\ \text{Capital Fund (Balancing Figure)}& 36,000& \text{Bank Balance}& 10,000\\ & & \text{Cash in Hand}& 4,000\\ & \overline{44,000}& & \overline{44,000}\end{array}$