Question

How will you deal with the following items while preparing the final accounts of a club :

$\begin{array}{ccc}& \text{April 1, 2016}& \text{March 31, 2017}\\ & \text{Rs}& \text{Rs}\\ \text{Stock of Stationery}& 4,000& 3,000\\ \text{Creditors for Stationery}& 7,200& 5,400\end{array}$

Amount paid for stationery during the year 2016-17 Rs 25,000

Answer 1

Income and Expenditure Account
for the year ending 31st March, 2017 Dr. Cr.
$\begin{array}{ccccc}\text{Expenditure}& & \text{Rs}& \text{Income}& \text{Rs}\\ \text{Stationery Consumed :}& & & & \\ \text{Payment made for}& & & & \\ \text{Stationery}& 25,000& & & \\ \text{Less : Creditors in the}& & & & \\ \text{beginning (i.e.,}& & & & \\ \text{payment made}& & & & \\ \text{for last year)}& \underset{–}{7,200}& & & \\ & 17,800& & & \\ \text{Add : Creditors at the}& & & & \\ \text{end (i.e.,}& & & & \\ \text{payment not}& & & & \\ \text{yet made)}& \underset{–}{5,400}& & & \\ \text{Purchase of Stationery}& 23,200& & & \\ \text{during the year}& & & & \\ \text{2016-17}& & & & \\ \text{Add : Stock in the}& & & & \\ \text{beginning}& \underset{–}{4,000}& & & \\ & 27,200& & & \\ \text{Less : Stock at end}& \underset{–}{3,000}& 24,200& & \end{array}$

Balance Sheet
as at 31st March, 2017
$\begin{array}{cccc}\text{Liabilities}& \text{Rs}& \text{Assets}& \text{Rs}\\ \text{Creditors}& 5,400& \text{Stock of Stationery}& 3,000\end{array}$

(i)

Creditors for Stationery Account Dr. Cr.
$\begin{array}{cccc}& \text{Rs}& & \text{Rs}\\ \text{Bank A/c (payment made for}& & \text{Balance b/d}& \\ \text{stationery during 2016-17)}& 25,000& \text{(Creditors in the beginning)}& 7,200\\ \text{Balance c/d}& & \text{Stock of Stationery A/c}& \\ \text{(Creditors at the end)}& 5,400& \text{(Balancing figure, being}& \\ & & \text{purchases of stationery during}& \\ & & \text{the year 2016-17)}& 23,200\\ & \underset{–}{\overline{30,400}}& & \underset{–}{\overline{30,400}}\end{array}$

(ii)

Stock of Stationery Account Dr. Cr.
$\begin{array}{cccc}& \text{Rs}& & \text{Rs}\\ \text{Balance b/d}& 4,000& \text{Income}\&\text{Expenditure A/c}& \\ \text{Creditors for Stationery A/c}& & \text{(Balancing figure, being}& \\ \text{(Purchases transferred from}& & \text{stationery consumed during}& \\ \text{Creditors A/c)}& 23,200& \text{the year 2016-17)}& 24,200\\ & & \text{Balance c/d}& 3,000\\ & \underset{–}{\overline{27,200}}& & \underset{–}{\overline{27,200}}\end{array}$