Question

From the following Receipt and Payment Account prepare final accounts of a Unity Club for the year ended March 31, 2007.

Receipt and Payment Accounts for the year ending March 31, 2007
Receipts		Amount Rs	Payments	Amount Rs
Balance b/d		15,000	Furniture	18,000
Sale of Old furniture (costing Rs 6,000)		4,000	Library books	10,000
Subscriptions:			Salaries	72,000
2005–06	18,000		General expenses	18,000
2006–07	60,000		Electric charges	12,000
2007–08	2,000	90,000	Newspapers	33,800
Sale of old newspapers		10,800	Postage	3,000
Profit from entertainment		44,000	Stationery	40,000
Rent		84,000	Audit fee	8,000
			Balance c/d	33,000
		2,47,800		2,47,800

Balance Sheet as on March 31, 2006
Liabilities	Amount Rs	Assets	Amount Rs
Outstanding Salary	6,000	Cash	15,000
Capital Fund	6,94,000	Outstanding subscription	18,000
		Library Books	30,000
		Furniture	37,000
		Land and Building	6,00,000
	7,00,000		7,00,000

Additional Information:

1.	The Club had 500 members each paying an annual subscription of Rs 150.
2.	On 31.3.2007 salaries outstanding amounted to Rs 1,200 and salaries paid included Rs 6,000 for the year 2005–06.
3.	Provide 5% depreciation on Land and Building.

Answer 1

Books of Unity Club Income and Expenditure Account as on March 31, 2007
Dr.						Cr.
Expenditure			Amount Rs	Income	Amount Rs
Loss on Sale of Old Furniture (4,000 – 6,000)			2,000	Subscription
				500 members at Rs 150 each	75,000
Salaries		72,000		Sale of Old Newspapers	10,800
Add: Outstanding for 2006–07		1,200		Profit from Entertainment	44,000
		73,200		Rent	84,000
Less: Outstanding for 2005–06		(6,000)	67,200
General Expenses			18,000	Deficit (Balancing figure)	200
Electric Charges			12,000
Newspapers			33,800
Postage			3,000
Stationery			40,000
Audit Fees			8,000
Depreciation on Land and Building			30,000
			2,14,000		2,14,000

Balance Sheet as on 31 March 2007
Liabilities		Amount Rs	Assets		Amount Rs
Advance Subscription (for 2007–08)		12,000	Subscription Outstanding		15,000
Salaries Outstanding		1,200	Furniture	37,000
Capital Fund	6,94,000		Add: Purchases	18,000
Less: Deficit	(200)	6,93,800		55,000
			Less: Sales	(6,000)	49,000
			Library Books	30,000
			Add: Purchases	10,000	40,000
			Land and Building	6,00,000
			Less: 5% Depreciation	(30,000)	5,70,000
			Cash and Bank		33,000
		7,07,000			7,07,000

Note: As per the solution, Deficit is Rs 200 and the total of the Balance Sheet as on March 31, 2007 is Rs 7,07,000. However, the Surplus given in the book is Rs 14,000 and the total of the Balance Sheet as on March 31, 2007 is Rs 7,27,000