Question

The following is the receipts and payments account of Appollo Hospital, for the year ended 31st March, 2015 :

Receipts and Payments
$\begin{array}{cccc}\text{Receipts}& \text{Rs}& \text{Payments}& \text{Rs}\\ \text{Balance b/d}& 8,500& \text{Payment for medicines}& 33,000\\ \text{Subscriptions}& 48,000& \text{Fees to Doctors}& 24,000\\ \text{Donations}& 15,000& \text{Salaries}& 27,000\\ \text{Interest on Investments}& & \text{Equipment Purchased}& 15,000\\ \text{at}9\%\text{p.a. for the year}& 9,000& \text{Charity show expenses}& 4,000\\ \text{Proceeds from Charity show}& 12,000& \text{Sundry Expenses}& 1,200\\ \text{Grant in aid}& 20,000& \text{Balance c/d}& 8,300\\ & \underset{–}{\overline{1,12,500}}& & \underset{–}{\overline{1,12,500}}\end{array}$

Other Information :

1-4-2014 31-3-2015

Rs Rs

(a) Subscriptions due 500 1,000

(b) Subscriptions received in Advance 1,000 500

(c) Stock of Medicines 10,000 15,000

(d) Amount due to medicine suppliers 8,000 12,000

(e) Value of Equipments 25,000 33,000

(f) Value of Buildings 70,000 65,000

You are required to prepare : -

(i) Income and Expenditure Account for the year ended 31st March, 2015, and

(ii) Balance Sheet as at that date.

Answer 1

Balance Sheet
as at 1-4-2014
$\begin{array}{cccc}\text{Liabilities}& \text{Rs}& \text{Assets}& \text{Rs}\\ \text{Amount due to Medicine}& & \text{Cash in Hand}& 8,500\\ \text{Suppliers}& 8,000& {\text{Investments}}^{\left(1\right)}& 1,00,000\\ \text{Subscriptions received in}& & \text{Outstanding Subscriptions}& 500\\ \text{advance}& 1,000& \text{Stock of Medicines}& 10,000\\ \text{Capital Fund (Balancing figure)}& 2,05,000& \text{Equipments}& 25,000\\ & & \text{Buildings}& 70,000\\ & \underset{–}{\overline{2,14,000}}& & \underset{–}{\overline{2,14,000}}\end{array}$

Note : - (1) Value of Investments has been calculated as below :-
If Interest is 9, the value of Investments = 100
If Interest is 9,000, the value of Investments = $\frac{100}{9}\times 9,000=1,00,000$

Income and Expenditure Account for the year ending 31st March, 2015
Dr. Cr.
$\begin{array}{cccccc}\text{Expenditure}& & \text{Rs}& \text{Income}& & \text{Rs}\\ \text{Medicines Consumed : -}& & & \text{Subscriptions :-}& 48,000& \\ \text{Opening Stock of}& & & \text{Less : Outstanding}& & \\ \text{Medicines}& 10,000& & \text{on 1.4.2014}& \underset{–}{500}& \\ \text{Add : Purchased during}& & & & 47,500& \\ \text{the year}& \underset{–}{33,000}& & \text{Add : Outstanding}& & \\ & 43,000& & \text{on 31.3.2015}& \underset{–}{1,000}& \\ \text{Less : Closing Stock of}& & & & 48,500& \\ \text{Medicines on}& & & \text{Add : Received in advance}& & \\ \mathrm{31.3.2015}& \underset{–}{15,000}& & \text{on 1.4.2014}& \underset{–}{1,000}& \\ & 28,000& & & 49,500& \\ \text{Less : Amount Due}& & & \text{Less : Received in advance}& & \\ \text{(Outstanding) for last}& & & \text{on 31.3.2015}& \underset{–}{500}& 49,000\\ \text{year (1-3-2014)}& \underset{–}{8,000}& & \text{Donations}& & 15,000\\ & 20,000& & \text{Interest on Investments}& & 9,000\\ \text{Add : Amount Due}& & & \text{Proceeds from charity show}& & 12,000\\ \text{(Outstanding) for Current}& & & \text{Grant in aid}& & 20,000\\ \text{year (31-3-2015)}& \underset{–}{12,000}& 32,000& & & \\ \text{Fees to Doctors}& & 24,000& & & \\ \text{Salaries}& & 27,000& & & \\ \text{Charity show expenses}& & 4,000& & & \\ \text{Sundry Expenses}& & 1,200& & & \\ \text{Depreciation of Equipments :-}& & & & & \\ \text{Opening Balance}& 25,000& & & & \\ \text{Add : Purchased during}& & & & & \\ \text{the year}& \underset{–}{15,000}& & & & \\ & 40,000& & & & \\ \text{Less : Closing Balance}& \underset{–}{33,000}& 7,000& & & \\ \text{Depreciation on Building :-}& & & & & \\ \text{Opening Balance}& 70,000& & & & \\ \text{Less : Closing Balance}& \underset{–}{65,000}& 5,000& & & \\ \text{Excess of Income over}& & & & & \\ \text{Expenditure}& & 4,800& & & \\ & & \underset{–}{\overline{1,05,000}}& & & \underset{–}{\overline{1,05,000}}\end{array}$

Balance Sheet
as at 31st March, 2015
$\begin{array}{ccccc}\text{Liabilities}& & \text{Rs}& \text{Assets}& \text{Rs}\\ \text{Amount due to Medicine Suppliers}& & 12,000& \text{Cash in Hand}& 8,300\\ \text{Subscriptions received in advance}& & 500& \text{Investments}& 1,00,000\\ \text{Capital Fund}& 2,05,000& & \text{Outstanding Subscriptions}& 1,000\\ \text{Add : Excess of Income}& & & \text{Stock of Medicines}& 15,000\\ \text{Over Expenditure}& & & \text{Equipments}& 33,000\\ \text{(surplus)}& \underset{–}{4,800}& 2,09,800& \text{Buildings}& 65,000\\ & & \underset{–}{\overline{2,22,300}}& & \underset{–}{\overline{2,22,300}}\end{array}$