Question

Following is the Receipt and Payment Account of Women’s Welfare Club for the year ended December 31, 2007:

Receipt and Payment Account for the year ending December 31, 2007
Receipts	Amount Rs	Payments	Amount Rs
Balance b/d	7,250	Salary	12,500
Subscriptions	81,750	Stationery	1,700
Donations	3,000	Electricity charges	9,550
Grant from Government	15,000	Insurance	7,500
Sale of newspapers	300	Equipments	30,000
Proceeds of charity show	16,500	Petty expenses	500
Interest on investments @ 10% for full year	7,000	Expenses on charity show	12,900
Sundries income	400	Newspapers	1,000
		Lectures fee	16,500
		Honorarium to Secretary	12,000
		Balance c/d	27,050
	1,31,200		1,31,200

Additional Information:

	01.01.2007 Rs	31.12.2007 Rs
Outstanding salaries	1,200	1,800
Insurance prepaid	700	300
Subscription outstanding	3,750	2,500
Subscription received in advanced	1,750	1,000
Electricity charges outstanding	—	1,250
Stock of stationery	2,250	700
Equipments	25,600	50,200
Building	1,20,000	1,14,000

Prepare Income and Expenditure Account for the year ended December 31, 2007 and Balance Sheet as on that date.

Answer 1

Books of Women Welfare Club Income and Expenditure Account as on December 31, 2007
Dr.					Cr.
Expenditure		Amount Rs	Income		Amount Rs
Salary	12,500		Subscriptions	81,750
Add: O/s on Dec. 31, 2007	1,800		Add: O/s on Dec. 31, 2007	2,500
14,300			84,250
Less: O/s on Dec. 31, 2006	(1,200)	13,100	Less: O/s on Dec. 31, 2006	(3,750)
			80,500
Stationery	1,700		Add: Advance on Dec. 31, 2006	1,750
Add: Opening Stock	2,250		82,250
3,950			Less: Advance on Dec.31, 2007	(1,000)	81,250
Less: Closing Stock	(700)	3,250
			Donations		3,000
Electric Charges	9,550		Grant from Government		15,000
Add: O/s on Dec. 31, 2007	1,250	10,800	Sale of Newspapers		300
			Profit from Charity show (16,500–12,900)		3,600
Insurance	7,500		Interest on Investments		7,000
Add: Prepaid in 2006	700		Sundries Income		400
8,200
Less: Prepaid in 2007	(300)	7,900
Depreciation on Equipments		5,400
Petty Expenses		500
Newspapers		1,000
Lectures Fee		16,500
Honorarium to Secretary		12,000
Depreciation on Building		6,000
Surplus (Balancing Figure)		34,100
		1,10,550			1,10,550

Balance Sheet as on December 31, 2006
Liabilities	Amount Rs	Assets	Amount Rs
Outstanding Salaries	1,200	Insurance Prepaid	700
Subscription in Advance	1,750	Subscription Outstanding	3,750
		Stock of Stationery	2,250
Capital Fund (Balancing Figure)	2,26,600	Equipments	25,600
		Building	1,20,000
		Cash and Bank	7,250
		Investments {7,000 × (100/10)}	70,000
	2,29,550		2,29,550

Balance Sheet as on December 31, 2007
Liabilities		Amount Rs	Assets		Amount Rs
Outstanding Salaries		1,800	Equipments	25,600
Subscription in Advance		1,000	Add: Purchases	30,000
Electricity Charges Outstanding		1,250	55,600
Capital Fund	2,26,600		Less: Depreciation	(5,400)	50,200
Add: Surplus	34,100	2,60,700
			Insurance Prepaid		300
			Subscription Outstanding		2,500
			Stock of Stationery		700
			Building	1,20,000
			Less: Depreciation	(6,000)	1,14,000
			Cash and Bank		27,050
			Investments		70,000
		2,64,750			2,64,750

NOTE: As per the solution, the Surplus is Rs 34,100 and the Total of Balance Sheet is Rs 2,64,750; however, the answer given in the book are Rs 79,700 and Rs 1,23,800 respectively.