Question

The Receipts and Payments Account for the year ending 31st December, 2010 of the Pandit Nehru Club is as follows:

Dr Cr.
$\begin{array}{ccccc}\text{Receipts}& & \text{Amount}& \text{Payments}& \text{Amount}\\ & & \text{(Rs)}& & \text{(Rs)}\\ \text{To Opening Cash Balance}& & 50,000& \text{By Salaries}& 20,000\\ \text{To Membership Subscription :}& & & \text{By Rent}& 15,000\\ 2009& 10,000& & \text{By Printing and Stationery}& 8,000\\ 2010& 1,00,000& & \text{Water and Power}& 15,000\\ 2011& \underset{–}{5,000}& 1,15,000& \text{By Newspapers and Periodicals}& 18,000\\ \text{To Income from Entertainment}& & 2,000& \text{By Furniture}& 50,000\\ \text{To Interest}& & 1,500& \text{By Repairs to Furniture}& 2,000\\ & & & \text{Refreshments}& 10,000\\ & & & \text{By Closing Cash Balance}& 30,500\\ & & \overline{1,68,500}& & \overline{1,68,500}\end{array}$

(a) The number of members of the club was Rs 500 and the membership subscription was Rs 20 per month.

(b) The rent of the club house was Rs 1,500 per month.

(c) At the end of the year, prepaid salary was Rs 2,000.

(d) In 2009, Rs 50,000 were deposited in Fixed Deposit Account for three years in a bank, carrying 6% interest p.a.

(e) The other assets on 1st January, 2010 were as follows : Furniture Rs 80,000 and Sports Equipment Rs 40,000.

(f) Depreciation is to be provided @ 10% p.a. on furniture and sports equipment.

Prepare Income and Expenditure Account for the year ending 31st December, 2010 and Balance Sheet as on that date.

Answer 1

BALANCE SHEET
as on 1st January, 2010
$\begin{array}{cccc}\text{Liabilities}& \text{Amount}& \text{Assets}& \text{Amount}\\ & \text{(Rs)}& & \text{(Rs)}\\ \text{Capital Fund (Balancing Figure)}& 2,30,000& \text{Cash Balance}& 50,000\\ & & \text{Outstanding Subscriptions}& 10,000\\ & & \text{Fixed Deposit}& 50,000\\ & & \text{Furniture}& 80,000\\ & & \text{Sports Equipment}& 40,000\\ & \overline{2,30,000}& & \overline{2,30,000}\end{array}$

INCOME AND EXPENDITURE ACCOUNT

for the year ending 31st December, 2010

Dr Cr.
$\begin{array}{cccccc}\text{Expenditure}& & \text{Amount}& \text{Income}& & \text{Amount}\\ & & \text{(Rs)}& & & \text{(Rs)}\\ \text{To Salaries}& 20,000& & \text{By Subscriptions}& 1,00,00& \\ \text{Less : Prepaid Salary}& \underset{–}{2,000}& 18,000& \text{Add : Outstanding Subs.}& & \\ \text{To Rent}& 15,000& & \text{cription for 2010}& \underset{–}{20,000}& 1,20,000\\ \text{Add: Outstanding Rent}& \underset{–}{3,000}& 18,000& \text{By Income from}& & \\ \text{To Printing and Stationery}& & 8,000& \text{Entertainment}& & 2,000\\ \text{Water and Power}& & 15,000& \text{By Interest}& 1,500& \\ \text{Newspaper and}& & & \text{Add: Accrued Interest}& \underset{–}{1,500}& 3,000\\ \text{Periodicals}& & 18,000& & & \\ \text{To Repairs to Furnitures}& & 2,000& & & \\ \text{To Refreshment}& & 10,000& & & \\ \text{To Depreciation on}& & & & & \\ \text{Furniture}& 13,000& & & & \\ \text{Sports Equipments}& \underset{–}{4,000}& 17,000& & & \\ \text{To Excess of Income over}& & & & & \\ \text{Expenditure}& & 19,000& & & \\ & & \overline{1,25,000}& & & \overline{1,25,000}\end{array}$

BALANCE SHEET
as on 31st December, 2010
$\begin{array}{cccccc}\text{Liabilities}& & \text{Amount}& \text{Assets}& & \text{Amount}\\ & & \text{(Rs)}& & & \text{(Rs)}\\ \text{Subscriptions received in}& & & \text{Cash Balance}& & 30,500\\ \text{Advance}& & 5,000& \text{Outstanding Subscriptions}& & 20,000\\ \text{Outstanding Rent}& & 3,000& \text{Accrued Interest}& & 1,500\\ \text{Capital Fund}& 2,30,000& & \text{Prepaid Salary}& & 2,000\\ \text{Add : Excess of Income}& & & \text{Fixed Deposit}& & 50,000\\ \text{over Expenditure}& \underset{–}{19,000}& 2,49,000& \text{Furnitures}& 80,000& \\ & & & \text{Add : Additions}& \underset{–}{50,000}& \\ & & & & 1,30,000& \\ & & & \text{Less : Depreciation}& \underset{–}{13,000}& 1,17,000\\ & & & \text{Sports Equipments}& 40,000& \\ & & & \text{Less: Depreciation}& \underset{–}{4,000}& 36,000\\ & & \overline{2,57,000}& & & \overline{2,57,000}\end{array}$

Working Notes :

Total members are 500. Each member pay Rs 20 per month.

$\text{Therefore, total subscription receivable for the year 2010}=500\times Rs.20\times 12=Rs1,20,000\text{Subscriptions received during the year 2010}=\underset{–}{\text{Rs 1,00,000}}\text{Therefore, outstanding subscription for 2010}=\underset{–}{\text{Rs 20,000}}$