Question

How are the following dealt with while preparing the final accounts for the year ended 31st , 2019?

RECEIPTS AND PAYMENTS ACCOUNT (AN EXTRACT) for the year ended 31st March, 2019
Dr.				Cr.
Receipts		₹	Payments	₹
			By Payments for Sports Material	1,40,000

BALANCE SHEET (AN EXTRACT) as at 1st April, 2018
Liabilities		₹	Assets	₹
Creditors for Sports Materials		6,000	Sports Materials	8,000

Additional information :
Sports Materials in Hand on 31st March, 2019 – ₹ 22,000.

Answer 1

Income and Expenditure Account for the year ended March 31, 2019
Dr.						Cr.
Expenditure			Amount (₹)	Income	Amount (₹)
Sports Material		1,40,000
Add: Opening Stock		8,000
Less: Closing Stock		(22,000)
Less: Creditors in the beginning		(6,000)	1,20,000

Balance Sheet as on March 31, 2019
Liabilities	Amount (Rs)	Assets	Amount (Rs)
		Stock of Sport Materials	22,000

Alternatively, Sports Material consumed can also be calculated as.

Creditors for Sports Material Account
Dr.					Cr.
Expenditure		Amount (₹)	Income	Amount (₹)
Bank A/c		1,40,000	Balance b/d (Creditors in the beginning)	6,000
(Amount paid for sports materials)			Purchases A/c (Balancing Figure)	1,34,000
		1,40,000		1,40,000

Sports Material Consumed = Opening Stock + Purchases – Closing Stock = 8,000 + 1,34,000 – 22,000 = Rs 1,20,000