Question

Receipts and Payments Account of Young Association disclosed that it has received Rs 2,00,000 by way of subscriptions during the year ended on March 31, 2016.

$\begin{array}{cc}& \text{Rs}\\ \text{Subscription Outstanding as on 1-4-2015}& \\ \text{(Out of which Rs 3,500 were received in 2015-16)}& 5,000\\ \text{Subscription received in advance on 31-3-2015}& 3,000\\ \text{Subscription received in advance on 31-3-2016}& 4,100\end{array}$

Show how the subscription will appear in the Income and Expenditure Account for the year ending March 31, 2016 and the Balance Sheet as at that date in each of the following alternative cases :

Case (a) If subscription outstanding for 2015-16 is Rs 6,400

Case (b) If subscription outstanding as on 31-3-2016 is Rs 6,400

Answer 1

Case (a) Books of Young Association Income and Expenditure Account
for the year ending on March 31, 2016 Dr. Cr.
$\begin{array}{ccccc}\text{Expenditure}& \text{Rs}& \text{Income}& & \text{Rs}\\ & & \text{Subscription}& 2,00,000& \\ & & \text{Less :}\text{Relating to the}& & \\ & & \text{previous year}& \underset{–}{3,500}& \\ & & & 1,96,500& \\ & & \text{Add :}\text{Outstanding}& & \\ & & \text{for 2015-16}& \underset{–}{6,400}& \\ & & & 2,02,900& \\ & & \text{Add :}\text{Received in Advance}& & \\ & & \text{on March 31,}& & \\ & & 2015& \underset{–}{3,000}& \\ & & & 2,05,900& \\ & & \text{Less :}\text{Received in Advance}& & \\ & & \text{on March 31,}& & \\ & & 2016& \underset{–}{4,100}& 2,01,800\end{array}$

Balance Sheet
as at March 31, 2016
$\begin{array}{ccccc}\text{Liabilities}& \text{Rs}& \text{Assets}& & \text{Rs}\\ \text{Subscription received in advance}& 4,100& \text{Subscription Outstanding :}& & \\ & & \text{for 2014-15}& 1,500& \\ & & \text{for 2015-16}& \underset{–}{6,400}& 7,900\end{array}$

Case (b) Books of Young Association Income and Expenditure Account
for the year ending on March 31, 2016 Dr. Cr.
$\begin{array}{ccccc}\text{Expenditure}& \text{Rs}& \text{Income}& & \text{Rs}\\ & & \text{Subscription}& 2,00,000& \\ & & \text{Less :}\text{Relating to the}& & \\ & & \text{previous year}& \underset{–}{3,500}& \\ & & & 1,96,500& \\ & & \text{Add :}\text{Outstanding}& & \\ & & \text{for 2015-16}& & \\ & & \text{(See Note I)}& \underset{–}{4,900}& \\ & & & 2,01,400& \\ & & \text{Add :}\text{Received in Advance}& & \\ & & \text{on March 31,}& & \\ & & 2015& \underset{–}{3,000}& \\ & & & 2,04,400& \\ & & \text{Less :}\text{Received in Advance}& & \\ & & \text{on March 31,}& & \\ & & 2016& \underset{–}{4,100}& 2,00,300\end{array}$

Balance Sheet
as at March 31, 2016
$\begin{array}{ccccc}\text{Liabilities}& \text{Rs}& \text{Assets}& & \text{Rs}\\ \text{Subscription received in advance}& 4,100& \text{Subscription Outstanding :}& & \\ & & \text{for 2014-15}& 1,500& \\ & & \text{for 2015-16}& \underset{–}{4,900}& 6,400\end{array}$

Note (1) : Subscriptions outstanding on 31st March 2016 is Rs 6,400. This includes Rs 1,500 (i.e., Rs 5,000 - Rs 3,500) for subscriptions still outstanding for 2014-15. Hence, the subscriptions outstanding for 2015-16 is Rs 4,900 (i.e., Rs 6,400 - Rs 1,500).