Question

The following is the account of cash transactions of the Nari Kalayan Samittee for the year ended December 31, 2006:

Receipts	Amount Rs	Payments	Amount Rs
Balance from last year	2,270	Rent 6,600
Subscriptions	32,500	Electric charges	3,200
Life membership fee	3,250	Lecturer’s fee	730
Donation	2,500	Office expenses	1,480
Profit from entertainment	7,250	Printing and Stationery	1,050
Sale of old Books (books value Rs1,000)	750	Legal fee	1,870
Interest	350	Books	6,500
		Furniture purchased	8,600
		Expenses on Nukar Drama	1,300
		Cash in Hand	8,040
		Cash at Bank	9,500
	48,870		48,870

You are required to prepare an Income and Expenditure Account after the following adjustments:

(a)	Subscription still to be received are Rs 750, but subscription include Rs 500 for the year 2007.
(b)	In the beginning of the year the Sangh owned building Rs 20,000 and furniture Rs 3,000 and Books Rs 2,000.
(c)	Provide depreciation on furniture @ 5% (including purchase), books @ 10% and building @ 5%.

Answer 1

Books of Nari Kalyan Samiti Income and Expenditure Account as on Dec. 31, 2006
Dr.					Cr.
Expenditure		Amount Rs	Income		Amount Rs
Rent		6,600	Subscription	32,500
Electric Charges		3,200	Add: Outstanding for 2006	750
Lecturer’s fee		730	33,250
Office Expenses		1,480	Less: Advance for 2007	(500)	32,750
Printing and Stationery		1,050	Donation		2,500
Legal Fee		1,870	Profit from Entertainment		7,250
Depreciation on:			Interest		350
Books	750
Furniture	580
Building	1,000	2,330
Expenses on Nukar Drama		1,300
Loss on Sale of Books		250
Surplus		24,040
		42,850			42,850

Balance Sheet as on Dec. 31, 2005
Liabilities	Amount Rs	Assets	Amount Rs
Capital Fund as Dec. 31, 2005	27,270	Building	20,000
(Balancing Figure)		Furniture	3,000
		Books	2,000
		Cash and Bank	2,270
	27,270		27,270

Balance Sheet as on Dec. 31, 2006
Liabilities		Amount Rs	Assets			Amount Rs
Capital Fund	27,270		Building		20,000
Add: Life Membership Fees	3,250		Less: 5% Depreciation		(1,000)	19,000
Add: Surplus	24,040	54,560
			Furniture		3,000
Advance Subscription for 2007		500	Add: Purchases		8,600
					11,600
			Less: 5% Depreciation		580	11,020
			Books		2,000
			Add: Purchases		6,500
			8,500
			Less: Sales		1,000
					7,500
			Less: 5% Depreciation		750	6,750
			Cash in Hand			8,040
			Cash at Bank			9,500
			Subscription Outstanding			750
		55,060				55,060

Note: As per the solution, Surplus is Rs 24,040; however, the Surplus given in the book is Rs 24,090.