Question

​How are the following dealt with while preparing the final accounts of a sports club for the year ended 31st March , 2018?

RECEIPTS AND PAYMENTS ACCOUNT ( AN EXTRACT ) for the year ended 31ST March, 2018
Dr.				Cr.
Receipts		₹	Payments	₹
To Sale of Sports Materials		26,000	​By Creditors for Sports Materials	61,000
(Book value ₹ 20,000)			By Cash purchase of Sports Materials	10,000

Additional information :

	As at 1st April, 2017 (₹)	As at 31st March, 2018 (₹)
Sports Materials	20,000	25,000
Creditors for Sports Materials	7,000	15,000

Answer 1

Income and Expenditure Account for the year ended March 31, 2016
Dr.						Cr.
Expenditure			Amount (Rs)	Income	Amount (Rs)
Payment for Sports Material		71,000		Profit on Sale of Sports Material (26,000 – 20,000)	6,000
Add: Opening Stock		20,000
Less: Closing Stock		(25,000)
Less: Creditors in the beginning		(7,000)
Add: Creditors at the end		15,000
Less: Book Value of Material Sold		(20,000)	54,000

Balance Sheet as on March 31, 2015
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Creditors for Sport Materials	7,000	Stock of Sport Materials	20,000

Balance Sheet as on March 31, 2016
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Creditors for Sport Materials	15,000	Stock of Sport Materials	25,000