If we have given Rent Rs. 1,12,000 in Receipts and Payment Account and additional information is given as:- Rent is paid for 3 years in advance.
Then, how we can show this on Income and Expenditure Account?

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Solution

Dear Student

Income & Expenditure A/c

Expenditure Amount Income Amount

To Rent 112000

(-) paid in advance for 3 years (84000) 28000

Rent Paid = 112000/ 4 = 28000
Total rent paid is for present year + for 3years in advance

OR
You can directly shown

Income & Expenditure A/c

Expenditure Amount Income Amount

To Rent 28000

With working notes.

Regards

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Similar questions

Q. From the following Receipts and Payments Account and additional information given below, prepare Income and Expenditure Account and Balance Sheet of Rural Literacy Society as on 31st March, 2019:

RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31 st March, 2019
Dr.				Cr.
Receipts		Amount (₹)	Payments	Amount (₹)
To Balance b/d:			By General Expenses	32,000
Cash in Hand		40,000	By Newspaper	18,500
Cash at Bank		1,55,500	By Electricity	30,000
To Subscriptions:			By Fixed Deposit with Bank	1,80,000
2017-18	12,000		(On 30th September, 2018 @ 10% p.a.)
2018-19	2,65,000		By Books	70,000
2019-20	5,000	2,82,000	By Salary	36,000
To Legacy		12,500	By Rent	65,000
To Government Grant		1,20,000	By Postage Charges	3,000
To Sale of Old Furniture		37,000	By Furniture (purchased)	1,05,000
(Book value ₹ 50,000)			By Balance c/d:
To Interest received on Fixed Deposit		4,500	Cash in Hand	30,000
			Cash at Bank	82,000
		6,51,500		6,51,500

Additional information:
(i) Subscription outstanding as on 31st March, 2018 ₹ 20,000 and on 31st March, 2019 ₹ 15,000.
(ii) On 31st March, 2019, salary outstanding ₹ 6,000 and one month rent paid in advance.
(iii) On 1st April, 2018, society owned furniture ₹ 1,20,000 and books ₹ 50,000.

Q. Rent paid in the accounting year Rs. 6,000. Rent paid in advance at the end of the year Rs. 500. Rent outstanding but not yet paid for the year Rs. 1,000. The amount to be debited to income and expenditure account is:

Q. From the following Receipts and Payments Account and additional information given below , prepare Income and Expenditure Account and Balance Sheet of Rural Literacy Society as on 31st March, 2018:

RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31 st March, 2018
Dr.				Cr.
Receipts		Amount (₹)	Payments	Amount (₹)
To Balance b/d			By General Expenses	32,000
Cash in Hand		40,000	By Newspaper	18,500
Cash at Bank		1,55,500	By Electricity	30,000
To Subscriptions:			By Fixed Deposit with Bank	1,80,000
2016-17	12,000		(On 30th September, 2017 @ 10%p.a.)
2017-18	2,65,000		By Books	70,000
2018-19	5,000	2,82,000	By Salary	36,000
To Sale of Old Newspaper		12,500	By Rent	65,000
To Government Grant		1,20,000	By Postage Charges	3,000
To Sale of Old Furniture		37,000	By Furniture (purchased)	1,05,000
(Book value ₹50,000)			By Balance c/d:
To Interest received on Fixed Deposit		4,500	Cash in Hand	30,000
			Cash at Bank	82,000
		6,51,500		6,51,500

Additional information:
(i) Subscription outstanding as on 31st March, 2017 ₹ 20,000 and on 31st March, 2018 ₹ 15,000.
(ii) On 31st March , 2018, salary outstanding ₹ 6,000 and one month rent paid in advance.
(iii) On 1st April, 2017, society owned furniture ₹ 1,20,000 and books ₹ 50,000.

Following is the Receipts and Payments Account of M.B. Club and from the given information, show how the item will be shown in Income and Expenditure Account and in Balance Sheet.

RECEIPTS AND PAYMENTS ACCOUNT
Dr. for the year ending 31st March, 2018 Cr.
$\begin{matrix} Receipts & Amount & Payments & Amouont (Rs) & (Rs) By Salaries 2016 - 17 & 30, 000 2017 - 18 & 3, 00, 000 2018 - 19 & 18, 000 & 3, 48, 000 \end{matrix}$

Additional Information :

(i) Salaries outstanding on 31st March, 2017 Rs 35,000.

(ii) Salaries for the year to be paid Rs 3,45,000.

(iii) Salaries paid in advance on 1-04-2017 Rs 10,000.

From the following receipts and payments and information given below, Prepare Income and Expenditure Account and opening Balance Sheet of Adult Literacy Organisation as on December 31, 2006.

Receipt and Payment Account for the year ending as on December 31, 2006
Receipts		Amount Rs	Payments	Amount Rs
Balance b/d			General Expenses	3,200
Cash in hand		4,000	News paper	1,850
Cash at Bank		15,550	Electricity	3,000
Subscriptions			Fixed deposit with bank (on 31.06.2006) @ 10% p.a.	18,000
2005	1,200		Fixed deposit with bank (on 31.06.2006) @ 10% p.a.	18,000
2006	26,500		Books	7,000
2007	500	28,200	Salary	3,600
Sale of old newspapers		1,250	Rent	6,500
Govt. grant		12,000	Postage charges	300
Sale of old furniture (book value Rs5000)		3,700	Furniture (purchased)	10,500
Interest received on FD		450	Balance c/d
			Cash in Hand	3,000
			Cash at Bank	8,200
		65,150		65,150

Information:

(i) Subscription outstanding as on 31.12.2005 Rs 2,000 and on December 31, 2006 Rs 1,500.

(ii) On December 31, 2006 Salary outstanding Rs 600, and one month Rent paid in advance.

(iii) On Jan. 01, 2005 organisation owned Furniture Rs 12,000, Books Rs 5,000.

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Expenditure	Amount	Income	Amount
To Rent 112000
(-) paid in advance for 3 years (84000)	28000

If we have given Rent Rs. 1,12,000 in Receipts and Payment Account and additional information is given as:- Rent is paid for 3 years in advance. Then, how we can show this on Income and Expenditure Account?

If we have given Rent Rs. 1,12,000 in Receipts and Payment Account and additional information is given as:- Rent is paid for 3 years in advance.
Then, how we can show this on Income and Expenditure Account?