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Question

How will you deal with the Entrance Fees while preparing the final accounts of New Delhi Sports Club for the year ended 31st March, 2017 in each of the following cases:

Case 1. During the year 2016-17, Entrance Fees received Rs
1,20,000.

Case 2. During the year 2016-17, Entrance Fees received Rs 1,20,000. It is the policy of the club to treat the Entrance Fees as ' Revenue Receipt'.

Case 3. During the year 2016-17, Entrance Fees received Rs 1,20,000. It is the policy of the club to treat the Entrance Fees as 'Capital Receipt'.

Case 4. During the year 2016-17, Entrance Fees received Rs 1,20,000. According to the policy of the club, 30% of the Entrance Fees is to be capitalised.

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Solution

Case 1. Income and Expenditure Account
for the year ended 31st March, 2017
Dr. Cr.
ExpenditureRs Income RsEntrance Fees1,20,000

Case 2. Income and Expenditure Account
for the year ended 31st March, 2017
Dr. Cr.
ExpenditureRs Income RsEntrance Fees1,20,000

Case 3. Balance Sheet
as at 31st March, 2017
LiabilitiesRsAssetsRsCapital Fund ........Add : Entrance Fees 1,20,000––––––––.......

Case 4. Income and Expenditure Account
for the year ended 31st March 2017
Dr. Cr.
ExpenditureRs Income RsEntrance Fees (70% of Rs 1,20,000)84,000

Balance Sheet
as at 31st March, 2017
Liabilities RsAssetsRsCapital Fund ........Add : Entrance Fees (30% of Rs 1,20,000) 36,000––––––........


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