Receipts and payments account shows a payment for stationery amounting to Rs. 40,000 and there is an opening and closing stationery amounting to Rs. 12,000 and Rs. 15,000. What is the amount to be considered as an expense in income and expenditure account?

Rs 37000

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Rs 52000

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Rs 15000

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None of these

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Solution

The correct option is A
Rs 37000

Consumption = 40,000 + 12,000 - 15,000 = Rs 37,000

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PRACTICAL PROBLEMS

(Only Income and Expenditure Account)

The following is the Receipts and Payments Account of Star Citizen’s Association, Bilaspur for the year ending on 31/03/2012.

Receipts and Payment Account for the year ending on 31/03/2012
Dr.	Cr.
Receipts		Amount Rs	Amount Rs	Payments	Amount Rs	Amount Rs
To Balance b/d			5,500	By Postage and Telegram		1,500
To Subscriptions				By Stationary Purchased		6,000
2010-2011		3,900		By Fixed Deposits		1,00,000
2011-2012		81,500		By Picnic Expenses		7,900
2012-2013		2,500	87,900	By Salaries		20,000
To Entrance Fees			2,000	By Annual General -
(to be Capitalized)				meeting expenses		4,500
To Donations			50,000	By Insurance Premium		3,450
To Legacies			10,000	By Sundry Expenses		4,800
To Interest on Deposits			30,000	By Furniture		26,000
To Picnic Receipts			5,750	By Balance c/d		17,000
			1,91,150			1,91,150

Adjustments:

1) Outstanding Picnic Receipts Rs 4,250.

2) Furniture was purchased on 01/10/2011 and it is to be depreciated @ 10% p.a.

3) Outstanding subscriptions for current year Rs 8,200.

4) Stock of Stationery on 01/04/2011 was Rs 650 and on 31/03/2012 was Rs 1,150.

5) Entries amount of legacies and 50% of Donations are to be capitalized.

With the above information, you are required to prepare Income and Expenditure Account for the year ending on 31/03/2012.

RECEIPTS AND PAYMENTS ACCOUNT
Dr.					Cr.
Receipts		(₹)	Payments		(₹)
To Balance b/d:			By Upkeep of Fields		20,000
Cash in Hand 1st April, 2018	10,000		By Tournament Expenses		7,000
Cash at Bank as per Pass Book	20,000	30,000	By Rates and Insurance		2,000
To Members' Subscriptions		50,000	By Telephone		500
To Admission Fee		3,000	By Stationery		1,000
To Sale of Old Bats, etc.		500	By General Charges		500
To Hire of Ground		3,000	By Secretary's Honorarium		2,000
To Subscriptions for Tournament		10,000	By Bats, Balls, etc.		7,000
To Donations		75,000	By Balance c/d:
To Legacy Donations		25,000	Cash in Hand 31st March, 2019	1,00,000
			Cash at Bank as per Pass Book	56,500	1,56,500
		1,96,500			1,96,500

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