Question

From the following Receipts and Payments Account of Mumbai Theatre Club, prepare Income and Expenditure Account for the year ended 31st March, 2019 and Balance Sheet as at that date:

RECEIPTS AND PAYMENTS ACCOUNT
Dr.					Cr.
Receipts		(₹)	Payments		(₹)
To Balance b/d:			By Salary		20,000
Cash and Bank		1,40,000	By Repair Expenses		5,000
To Donations		50,000	By Furniture		60,000
To Subscriptions		1,20,000	By Miscellaneous Expenses		5,000
To Entrance Fees		10,000	By Investments		60,000
To Interest on Investments		1,000	By Insurance Premium		2,000
To Interest Received from Bank		4,000	By Billiard Table		80,000
To Sale of Old Newspapers		1,500	By Paper, lnk, etc.		1,500
To Sale of Drama Tickets		10,500	By Drama Expenses		5,000
			By Balance c/d:
			Cash and Bank		98,500
		3,37,000			3,37,000

Additional Information:
(i) Subscriptions in arrear for the year ended 31st March, 2019 ₹ 9,000 and subscriptions in advance for the year ending 31st March, 2020 ₹ 3,500.
(ii) Insurance Premium outstanding ₹ 400.
(iii) Miscellaneous expenses prepaid ₹ 900.
(iv) 8% interest has accrued on investment for five months.
(v) Billiard Table costing ₹ 3,00,000 was purchased during last year and ₹ 2,20,000 were paid for it.

Answer 1

In the books of Mumbai Theatre Club
Dr.	Income and Expenditure A/c for the year ended 31st March, 2019					Cr.
Expenditure			Amount (₹)	Income			Amount (₹)
To Salary			20,000	By Donations			50,000
To Repair Expenses			5,000	By Subscriptions	1,20,000
To Miscellaneous Expenses		5,000		Add: Subscriptions Outstanding	9,000
Less: Prepaid Expenses		900	4,100	Less: Advance Subscriptions	3,500		1,25,500
To Insurance Premium		2,000		By Entrance Fees			10,000
Add: Outstanding Premium		400	2,400	By Interest on Investments	1,000
To Paper, Ink, etc.			1,500	Add: Accrued Interest (WN1)	2,000		3,000
To Drama Expenses			5,000	By Interest received from Bank			4,000
To Surplus- Excess of Income over Expenditure			1,66,500	By Sale of Old Newspapers			1,500
				By Sale of Drama Tickets			10,500
			2,04,500				2,04,500

Working Notes: 1)

Interest on Investments Accrued for 5 months	=	₹ (60,000 × 8/100 × 5/12)
	=	₹ 2,000

2)

Balance Sheet of Mumbai Theatre Club
as at 1st April, 2018
Liabilities	Amount (₹)	Assets	Amount (₹)
Capital Fund (Balancing Figure)	3,60,000	Billiard Table	3,00,000
		Cash and Bank	1,40,000
Creditors for Billiard Table	80,000
	4,40,000		4,40,000

Balance Sheet of Mumbai Theatre Club
as at 31st March, 2019
Liabilities		Amount (₹)	Assets	Amount (₹)
Capital Fund (WN2)	3,60,000		Furniture	60,000
Add: Surplus	1,66,500	5,26,500	Investments	60,000
			Billiard Table	3,00,000
Outstanding Insurance Premium		400	Prepaid Miscellaneous Expenses	900
Advance Subscriptions		3,500	Accrued Interest on Investments	2,000
			Outstanding Subscriptions	9,000
			Cash and Bank	98,500
		5,30,400		5,30,400