Question

The following particulars relate to Madras Club for the year 31st March, 2018.

$\text{Dr}\text{RECEIPTS AND PAYMENTS ACCOUNT}\text{Cr}\begin{array}{ccccc}\text{Receipts}& & \text{Amount}& \text{Payments}& \text{Amount}\\ & & \text{(Rs)}& & \text{(Rs)}\\ \text{To Balance b/d}& & 60,000& \text{By Salaries}& 1,24,500\\ \text{To Subscription :}& & & \text{By Stationery}& 24,000\\ 2016-17& 2,400& & \text{By Rent}& 36,000\\ 2017-18& 1,26,600& & \text{By Telephone Expenses}& 6,000\\ 2018-19& \underset{–}{4,800}& 1,33,800& \text{By Furniture}& 75,000\\ \text{To Income from canteen}& & 90,000& \text{By Advertisements}& 10,500\\ \text{To Miscellaneous}& & 4,500& \text{By Postage}& 10,000\\ \text{To Sale of Old Assets}& & 11,200& \text{By Sundry Expenses}& 50,000\\ \text{To Interest}& & 48,000& \text{By Balance b/d}& 1,72,000\\ \text{To Donation}& & 1,00,000& & \\ \text{To Entrance Fees}& & 60,000& & \\ \text{Total}& & 5,08,000& \text{Total}& 5,08,000\end{array}$
You are required to prepare an Income and Expenditure Account and Balance Sheet after making the following adjustments:

(i) There are 450 members each paying a monthly subcription of Rs 25, Rs 2,700 being arrears of 2016-17 on 1-04-2017.

(ii) A donation of Rs 20,000 was wrongly recorded as interest income.

(iii) Entire donation and half of entreance fees are to be capitalised.

(iv) Stock of stationery on 01-04-2017 was Rs 3,000 and on 31-03-2018 was Rs 5,400.

(v) Cost of building is Rs 6,00,000 on 01-04-2017, depreciate it at 5% p.a. Furniture valued at Rs 75,000 was purchased on 31-03-2018.

Answer 1

Dr. INCOME AND EXPENDITURE ACCOUNT
for the year ending 31-03-2018 Cr.
$\begin{array}{cccccc}\text{Expenditure}& & \text{Amount}& \text{Income}& & \text{Amount}\\ & & \text{(Rs)}& & & \text{(Rs)}\\ \text{To Salaries}& & 1,24,000& \text{By Subscription}& 1,26,600& \\ \text{To Stationery Consumed}& & & \text{+ Outstanding}& \underset{–}{8,400}& 1,35,000\\ \text{Opening}& 3,000& & \text{By Income from}& & \\ \text{+Purchase}& 24,000& & \text{canteen}& & 90,000\\ \text{(-) Closing}& \underset{–}{(5,400)}& 21,600& \text{By Miscellaneous}& & 4,500\\ \text{To Rent and Taxes}& & 36,000& \text{By Sale of Old Assets}& & 11,200\\ \text{To Telephone Expenses}& & 6,000& \text{By Interest}& 48,500& \\ \text{To Advertisement}& & 10,500& \text{(-) Donation}& \underset{–}{(20,000)}& 28,500\\ \text{To Postages}& & 10,000& \text{By Entrance Fees}& & 30,000\\ \text{To Sundry Expenses}& & 50,000& 60,000\times 1/2& & \\ \text{To Depreciation on}& & & & & \\ \text{Building}& & 30,000& & & \\ \text{To Excess of Income over}& & & & & \\ \text{Expenditure}& & \underset{–}{10,600}& & & \\ & \text{Total}& 2,99,200& & \text{Total}& \overline{2,99,200}\end{array}$

BALANCE SHEET
as on 31st March, 2018
$\begin{array}{cccccc}\text{Liabilities}& & \text{Amount}& \text{Assets}& & \text{Amount}\\ & & \text{(Rs)}& & & \text{(Rs)}\\ \text{Capital Fund}& 6,65,{700}^{\ast }& & \text{Cash in Hand}& & 1,72,000\\ \text{+ Excess}& \underset{–}{10,600}& 6,76,300& \text{Outstanding Subscription}& & \\ \text{Entrance Fees}& & 30,000& 2016& 300& \\ \text{Advance Subscription}& & 4,800& 2017& \underset{–}{8,400}& 8,700\\ \text{Donation}& & 1,20,000& \text{Building}& 6,00,000& \\ & & & \text{(-) Depreciation}& \underset{–}{(30,000)}& 5,70,000\\ & & & \text{Stock of Stationery}& & 5,400\\ & & & \text{Furniture}& & 75,000\\ & \text{Total}& 8,31,100& & \text{Total}& 8,31,100\end{array}$

*Calculation of Opening capital Fund =6,00,000 +60,000+2,700+3,000=Rs 6,65,700