Question

Glaxo Club's Balance Sheet as at 1st April, 2018 was as under:

Liabilities		(₹)	Assets	(₹)
Capital Fund		2,00,000	Sports Equipments	50,000
Tournament Fund		60,000	Grounds	1,20,000
Subscriptions in Advance		6,000	Billiards Tables	60,000
Salaries Unpaid		11,000	Subscriptions Outstanding	8,000
			Cash and Bank Balances	39,000
		2,77,000		2,77,000

Receipts and Payments Account for the year ended 31st March, 2019 was:

RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31st March, 2019
Dr.					Cr.
Receipts		(₹)	Payments		(₹)
To Opening Balance		39,000	By Wages and Salaries		60,000
To Subscriptions		1,81,000	By Upkeep of Grounds		10,000
To Sale of Old Materials		1,500	By Stationery		15,000
To Sale of Sports Equipment		6,000	By Audit Fee		2,000
(Book value ₹ 10,000)			By Expenses on Tournament		65,000
To Entrance Fees		2,000	By Sports Equipments		20,000
To Life Membership Fees		50,000	By 5% Investments		40,000
To Donations for Tournament		20,000	(On 1st October, 2018)
			By Cash and Bank Balances		87,500
		2,99,500			2,99,500

Subscriptions still to be received are ₹ 5,500 but subscriptions already received include ₹ 4,000 for next year. Salaries still unpaid are ₹ 6,000. Sports Equipments are now valued at ₹ 45,000. Prepare Income and Expenditure Account and the Balance Sheet, after charging 10% depreciation on Billiards Tables.

Answer 1

In the books of Glaxo Club
Dr.	Income and Expenditure A/c for the year ended 31st March, 2019					Cr.
Expenditure		Amount (₹)	Income		Amount (₹)
To Loss on Sale of Sports Equipment		4,000	By Subscriptions	1,81,000
To Sports Equipments used (WN1)		15,000	Add: Advance Subscriptions (Prev. Year)	6,000
To Wages and Salaries [60,000 – 5,000 (Prev. Year)]		55,000	Less: Advance Subscriptions (Next Year)	4,000
To Upkeep of Ground		10,000	Subscriptions Received (Prev. Year)	2,500	1,80,500
To Stationery		15,000	By Sale of Old Materials		1,500
To Audit Fees		2,000	By Entrance Fees		2,000
To Depreciation on Billiards Table (60,000 × 10/100)		6,000	By Interest Accrued on 5% Investments		1,000
To Surplus- Excess of Income over Expenditure		78,000	(40,000 × 5/100 × 6/12)
		1,85,000			1,85,000

Note: If nothing is mentioned, Entrance fee is to be treated as a revenue receipt.

Working Notes:

Sports Material Consumed	=	Opening Stock + Purchases – Closing Stock - Sales
	=	₹ (50,000 + 20,000 – 45,000 – 10,000) = ₹ 15,000

Balance Sheet of Glaxo Club
as at 31st March, 2019
Liabilities		Amount (₹)	Assets		Amount (₹)
Capital Fund	2,00,000		Sports Equipment		45,000
Add: Life Membership fee	50,000		Grounds		1,20,000
Add: Surplus	78,000	3,28,000	Billiards Table	60,000
			Less: Depreciation	6,000	54,000
Tournament Fund	60,000
Add: Donations	20,000		5% Investments		40,000
Less: Expenses on Tournament	65,000	15,000	Accrued Interest on Investments		1,000
			Subscriptions Outstanding		5,500
Subscriptions Received in Advance		4,000	Cash and Bank Balances		87,500
Salaries Unpaid		6,000
		3,53,000			3,53,000