Following Receipt and Payment Account was prepared from the cash book of Delhi Charitable Trust for the year ending December 31, 2007
Receipt and Payment Account for the year ending December 31, 2007 |
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Receipts |
Amount Rs |
Payments |
Amount Rs |
Balance b/d |
|
Charity |
11,500 |
Cash in Hand |
11,500 |
Rent and taxes |
3,200 |
Cash at Bank |
12,600 |
Salary |
6,000 |
Donation |
9,000 |
Printing |
600 |
Subscription |
42,800 |
Postage |
300 |
Legacies |
18,000 |
Advertisements |
4,500 |
Interest on investment |
4,500 |
Insurances |
2,000 |
Sale of old newspapers |
200 |
Furniture |
21,600 |
|
|
Investment |
23,000 |
|
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Balance c/d: |
|
|
|
Cash in Hand |
9,900 |
|
|
Cash at Bank |
16,000 |
|
98,600 |
|
98,600 |
|
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|
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Prepare Income and expenditure account for the year ended December 31, 2006, and a balance sheet as on that date after the following adjustments:
(a) |
It was decided to treat one-third of the amount received on account of donation as income. |
(b) |
Insurance premium was paid in advance for three months. |
(c) |
Interest on investment Rs1,100 accrued was not received. |
(d) |
Rent Rs600: salary Rs900 and advertisement expenses Rs1,000 outstanding as on December 31, 2007. |
Books of Delhi Charitable Trust
Income and Expenditure Account as on December 31, 2007 |
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Dr. |
Cr. |
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Expenditure |
Amount Rs |
Income |
Amount Rs |
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Insurance |
2,000 |
|
Donation {9,000 × (1/3)} |
3,000 |
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Less: Prepaid {2,000 × (3/15)} |
(400) |
1,600 |
Interest on Investments |
4,500 |
|
|
|
|
Add: Accrued Interest |
1,100 |
5,600 |
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Charity |
11,500 |
|
|
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Rent and Taxes |
3,200 |
|
Subscription |
42,800 |
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Add: Outstanding |
600 |
3,800 |
Sale of Old Newspapers |
200 |
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|
|
|
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Salary |
6,000 |
|
|
|
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Add: Outstanding |
900 |
6,900 |
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Printing |
600 |
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|
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Postage |
300 |
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Advertisements |
4,500 |
|
|
|
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Add: Outstanding |
1,000 |
5,500 |
|
|
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Surplus (Balancing figure) |
21,400 |
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|
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|
51,600 |
|
51,600 |
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Balance Sheet as on December 31, 2007
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Liabilities |
Amount Rs |
Assets |
Amount Rs |
Capital Fund (Balancing figure) |
24,100 |
Cash in Hand |
11,500 |
|
|
Cash at Bank |
12,600 |
|
24,100 |
|
24,100 |
|
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Balance Sheet as on December 31, 2007
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Liabilities |
Amount Rs |
Assets |
Amount Rs |
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Capital Fund |
24,100 |
|
Prepaid Insurance {2,000 × (3/15)} |
400 |
|
Add: Donation {9,000 × (2/3) |
6,000 |
|
Investment |
23,000 |
|
Add: Legacies |
18,000 |
|
Add: Accrued Interest |
1,100 |
24,100 |
Add: Surplus |
21,400 |
69,500 |
Furniture |
21,600 |
|
Rent Outstanding |
600 |
Cash in Hand |
9,900 |
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Salary Outstanding |
900 |
Cash at Bank |
16,000 |
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Advertisement Expenses Outstanding |
1,000 |
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|
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|
72,000 |
|
72,000 |
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Note:
i. |
per the solution, Surplus and the total of the Closing Balance Sheet are Rs 21,400 and Rs 72,000 respectively; however as per the answer given in the book is Rs 21,500 and Rs 72,100. Thus, in order to match the answer with that of the book, Rent paid of Rs 2,000 is assumed for 12 months instead of 15 months. |
ii. |
question asks us to prepare Income and Expenditure Account for the year ended December 31, 2006; however, the solution has been prepared according to the date of Receipt and Payment Account which is December 31, 2007. |