Question

The Receipts and Payments Account for the year ending 31st March, 2016 of the Netaji Subhash Club is as follows :

$\begin{array}{ccccc}\text{Receipts}& & \text{Rs}& \text{Payments}& \text{Rs}\\ \text{Cash Balance}& & 50,000& \text{Salaries}& 20,000\\ \text{Membership Subscriptions :}& & & \text{Rent}& 15,000\\ \text{2014-15}& 10,000& & \text{Printing and Stationery}& 8,000\\ \text{2015-16}& 1,00,000& & \text{Water and Power}& 15,000\\ \text{2016-17}& \underset{–}{5,000}& 1,15,000& \text{Newspapers and Periodicals}& 18,000\\ \text{Income from Entertainments}& & 2,000& \text{Furniture}& 50,000\\ \text{Interest}& & 1,500& \text{Repairs to Furniture}& 2,000\\ & & & \text{Refreshments}& 10,000\\ & & & \text{Closing Balance}& 30,500\\ & & \underset{–}{\overline{1,68,500}}& & \underset{–}{\overline{1,68,500}}\end{array}$

(a) The number of members of the club was 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 and end of the year prepaid salary was Rs 2,000.

(d) In 2014-15, Rs 50,000 were deposited in Fixed Deposit Account for 3 years in a bank, carrying $6\%$ interest p.a.

(e) The other assets on 1st April, 2015 were as follows : Furniture Rs 80,000 and Sports equipments Rs 40,000.

(f) Depreciation is to be provided @ $10\%$ p.a. on Furniture and Sports equipments. Prepare Income and Expenditure Account for the year ending 31st March, 2016 and Balance Sheet as at that date.

Answer 1

Balance Sheet
as at 1st April, 2015
$\begin{array}{cccc}\text{Liabilities}& \text{Rs}& \text{Assets}& \text{Rs}\\ \text{Capital Fund (Balancing figure)}& 2,30,000& \text{Cash Balance}& 50,000\\ & & \text{Outstanding Subscriptions}& 10,000\\ & & \text{Fixed Deposit}& 50,000\\ & & \text{Furniture}& 80,000\\ & & \text{Sports Equipments}& 40,000\\ & \underset{–}{\overline{2,30,000}}& & \underset{–}{\overline{2,30,000}}\end{array}$

Income and Expenditure Account for the year ending 31st March, 2016
Dr. Cr.
$\begin{array}{ccccccc}\text{Expenditure}& & \text{Rs}& \text{Income}& & \text{Rs}& \\ & & & & & & \\ \text{Salaries}& 20,000& & \text{Subscriptions}& 1,00,00& & \\ \text{Less : Prepaid Salary}& \underset{–}{2,000}& 18,000& \text{Add : Outstanding Subs-}& & & \\ \text{Rent}& 15,000& & {\text{criptions for 2015-16}}^{\left(1\right)}& \underset{–}{20,000}& 1,20,000& \\ \text{Add : Outstanding Rent}& \underset{–}{3,000}& 18,000& \text{Income from entertainments}& & 2,000& \\ \text{Printing}\&\text{Stationery}& & 8,000& \text{Interest}& 1,500& & \\ \text{Water and Power}& & 15,000& \text{Add : Accrued interest}& \underset{–}{1,500}& 3,000& \\ \text{Newspapers}\&\text{Periodicals}& & 18,000& & & & \\ \text{Repairs to furniture}& & 2,000& & & & \\ \text{Refreshments}& & 10,000& & & & \\ \text{Depreciation on}& & & & & & \\ \text{Furniture}& 13,000& & & & & \\ \text{Sports Equipments}& \underset{–}{4,000}& 17,000& & & & \\ \text{Excess of Income over}& & & & & & \\ \text{Expenditure}& & 19,000& & & & \\ & & \underset{–}{\overline{1,25,000}}& & & \underset{–}{\overline{1,25,000}}& \end{array}$

Balance Sheet
as at 31st March, 2016
$\begin{array}{cccccc}\text{Liabilities}& & \text{Rs}& \text{Assets}& & \text{Rs}\\ \text{Subscriptions received in Advance}& & 5,000& \text{Cash Balance}& & 30,500\\ \text{Outstanding Rent}& & 3,000& \text{Outstanding Subscriptions}& & 20,000\\ \text{Capital Fund}& 2,30,000& & \text{Accrued Interest}& & 1,500\\ \text{Add : Excess of Income}& & & \text{Prepaid Salary}& & 2,000\\ \text{over Expenditure}& \underset{–}{19,000}& & \text{Fixed Deposit}& & 50,000\\ & & 2,49,000& \text{Furniture}& 80,000& \\ & & & \text{Add : Additions}& \underset{–}{50,000}& \\ & & & & 1,30,000& \\ & & & \text{Less : Depreciation}& \underset{–}{13,000}& 1,17,000\\ & & & \text{Sports Equipments}& 40,000& \\ & & & \text{Less : Depreciation}& \underset{–}{4,000}& 36,000\\ & & \underset{–}{\overline{2,57,000}}& & & \underset{–}{\overline{2,57,000}}\end{array}$

Note :- Total members are 500. Each member pays Rs 20 per month.

$\begin{array}{ccc}& & \text{Rs}\\ \text{Therefore, total subscriptions receivable for the year 2015-16}& & \\ =500\times 20\times 12& & =1,20,000\\ \text{Less: Subscriptions received during the year 2015-16}& & =\underset{–}{1,00,000}\\ \text{Therefore, Outstanding Subscription for 2015-16}& & =\underset{–}{20,000}\end{array}$