Short Questions for NCERT Accountancy Solutions Class 12 Part 1 Chapter 1
1. State the meaning of ‘Not-for-Profit’ Organisations.
Organisations that are established with the aim of providing services to society and not profit earning are called as Not-for-profit Organisations (NPO). Some organisations that come under NPO are hospitals, religious organisations and trade unions. An NPO earns income from life membership fees, subscriptions, grants, donations etc.
2. State the meaning of Receipt and Payment Account.
A receipts and payments account (R & P Account) is a summary of actual cash receipts and payments that is extracted from the cash book over a certain time period. All the cash received is recorded on the Receipts and all the cash payments gets recorded in Payments side of the R & P Account. All the cash and bank transactions are recorded in Cash Book and this book is created on the basis of all these transaction. All cash and bank transactions that are of revenue and capital nature gets recorded. It records all transactions i.e. bank receipts and cash receipts.
This account helps in determining the closing balance of bank and cash receipts and thereby assess cash position of a Not-for-profit organisation or NPO.
3. State the meaning of Income and Expenditure Account.
Income and Expenditure (I & E) account is the equivalent of P & L account (Profit and Loss Account). In an income and expenditure account, surplus and deficit is determined during the accounting period while in a P& L account the net profit or loss is determined at the running of accounting period. It is nominal account and records transactions that are of revenue nature. The closing balance is called deficit or surplus based.
4. What are the features of Receipt and Payment Account?
The receipts and payments account has the following features:
1. It is known as cash book summary for NPO (Not-for-profit organisations) as it records all the cash and cash equivalents of the organisation.
2. This account shows cash transactions that are of revenue and capital nature
3. It does not follow the double entry bookkeeping system as it is a summary of transactions.
4. It does not include transactions that do not have cash or bank items.
5. It helps in revealing the cash position of the organisation
5. What steps are taken to prepare Income and Expenditure Account from a Receipt and Payment Account?
Following steps should be followed:
1. Exclude opening cash and bank balances and also do the same for closing cash and balances
2. Exclude income of the previous period and any such income that is received in advance
3. Exclude all items involving capital receipts and payments
4. Exclude expenditures that are of the previous or coming period
5. Include all incomes of the current period which are yet to be received
6. Include expenditures of current period which are yet to be paid.
7. Provision for bad debts and fixed assets depreciation should be taken into account and charged to the account (income and expenditure account)
6. What is subscription? How is it calculated?
For a not-for-profit organisation subscription acts as one of the main sources of income. It refers to money that the members pay periodically for maintaining their membership in active state. Subscription charges can be paid in flexible options like monthly, quarterly, half-yearly or yearly. It appears on the receipt side of R & P account.
For calculating subscription for current period, add subscription received in advance meant for current period during the previous year and outstanding subscription for current year to the subscription received for the current year and deducting subscription received in advance for next year and outstanding subscription from previous year from subscription received in the current year.
Calculation of Subscription
| Subscription received during the year (+) Subscription received (in advance) during previous year for current year (+) Subscription outstanding at the end of the year(-) Subscription received in advance for the next year (-) Subscription outstanding for the previous year Subscription shown in Income and Expenditure Account | – –– – | ––– |
7. What is Capital Fund? How is it calculated?
The scenario where value of assets of NPO are more than its liabilities, it is called as capital fund. This is similar to the concept of capital for an organisation working to earn profit. If any surplus amount is received from I & E account, it gets added to capital fund, likewise any deficit will be deducted from the same and is known as Accumulated Fund.
Calculating Capital Fund
| Capital Fund at the beginning of the year | ** | |
| Add: Surplus from Income and Expenditure Account | ** | |
| Add: Subscription Amount (Capitalised amount) | ** | |
| Add: Life membership fee. | ** | ** |
| Less: Deficit from Income and Expenditure Account | ** | |
| Capital Fund at the end of the year | *** |
Long Questions for NCERT Accountancy Solutions Class 12 Part 1 Chapter 1
1. Explain the statement: “Receipt and Payment Account is a summarised version of Cash Book”.
A receipts and payments account (R & P Account) is a summary of actual cash receipts and payments that is extracted from the cash book over a certain time period. All the cash received is recorded on the Receipts and all cash payments are recorded in Payments side of the R & P Account. All the cash and bank transactions are recorded in Cash Book and this book is created on the basis of all these transaction. All cash and bank transactions that are of revenue and capital nature gets recorded. It records all transactions i.e. bank receipts and cash receipts.
This account helps in determining the closing balance of bank and cash receipts and thereby assess cash position of a Not-for-profit organisation or NPO.
Here are some similarities between Cash Book and Receipts and Payments Account:
1. Both are real accounts.
2. Only transactions of cash and bank are recorded
3. There is no distinction between Revenue and Capital Items
4. Helps in assessing the cash position of an organisation
5. Starts with an opening balance consisting of cash and bank and concludes with closing balance of cash and bank.
Therefore, it can be said that Receipt and Payments Account is a summarised version of cash book.
2. “Income and Expenditure Account of a Not-for-Profit Organisation is akin to Profit and Loss Account of a business concern”. Explain the statement.
The account containing all expenses and losses for current accounting period prepared by a Not-for-profit organisation is called as Income and Expenditure (I & E) account, while a similar account prepared by profit earning organisation is called as Profit and Loss Account (P & L).
Here are some of the similarities between I & E and P & L accounts:
1. Accrual basis is followed for the preparation of both accounts.
2. Expenses and losses are recorded on Expenditure (debit) side and gains and income are recorded on Income (credit) side.
3. Records only revenue items related to current accounting period.
4. Both exhibit nature similar to nominal accounts
Therefore, it can be said that from the above statements that Income and Expenditure account of a Not-for-Profit Organisation is akin to Profit and Loss Account of a business concern.
3. Distinguish between Receipts and Payments Account and Income and Expenditure Account.
| Basis of Comparison | Receipts and Payments Account | Income and Expenditure Account |
| Nature | Contains bank and cash transaction summary. | Contains summary of income and expenses of current year |
| Revenue and Capital | Both revenue and capital transactions are recorded | Only revenue transactions are recorded |
| Debit Side | Records cash and bank receipts are recorded | Records expenses and losses incurred for the current accounting year |
| Credit side | Records payments received in form of cash and cheques | Records incomes and gains during the current accounting year |
| Account Type | Real Account | Nominal Account |
| Accounting Period | Records receipts and payments made during the year which may be related to current, previous or next accounting year | Records only the expenditure and income made during the current accounting year |
| Object | Shows the cash position of NPO | Shows the net results in terms of deficits or surplus |
| Depreciation | Non-cash items like depreciation is not included | Includes non-cash items like depreciation, bad-debts for determining net profit or loss. |
| Adjustment | Before preparing financial statements the Payments and Receipts received during the year can be adjusted. | Cash and non-cash transactions can be adjusted |
| System | Cash basis | Accrual Basis |
4. Explain the basic features of Income and Expenditure Account and of Receipt and Payment Account.
Income and Expenditure account is similar to the P & L account (Profit and Loss Account). In an income and expenditure account surplus and deficit is determined during the accounting period while in a P& L account the net profit or loss is determined during an accounting period. It is a nominal account and records transactions that are of revenue nature. The closing balance is called deficit or surplus based.
Basic Features of I & E Account are:
1. It is a nominal account
2. Prepared on the basis of R & P (Receipt and Payment Account). All revenue items irrespective of income or expenditure get transferred.
3. Transactions that are of capital nature are not included in the account.
4. It is similar to P & L account
5. Records only current accounting year items and excludes any other transactions
6. Items like prepaid expenses, depreciation, income received in advance can be adjusted.
7. Balancing figure is expressed as surplus or deficit based on the status of expenses and income.
A receipts and payments account is a summary of actual cash receipts and payments that is extracted from the cash book over a certain time period. All the cash received is recorded on the Receipts and all cash payments are recorded in Payments side of the Receipts and Payments Account. This account is prepared on the basis of all the cash and bank transactions that are recorded in Cash Book. It records all cash and bank transactions that are of revenue and capital nature. It records all transactions i.e. bank receipts and cash receipts.
This account helps in determining the closing balance of bank and cash receipts and thereby assess cash position of an NPO.
Basic Features of R & P Account are:
1. It is a real account also known as summarised version of Cash Book
2. It records only bank and cash transactions.
3. Non-cash transactions like depreciation is not recorded
4. It begins with an opening balance of cash and bank and ends with closing balance of cash and bank.
5. Helps in assessing the cash position of an organisation
6. It does not distinguish between capital and revenue items
5. Show the treatment of the following items by a Not-for-Profit Organisation:
| (i) | Annual subscription |
| (ii) | Specific donation |
| (iii) | Sale of fixed assets |
| (iv) | Sale of old periodicals |
| (v) | Sale of sports materials |
| (vi) | Life membership fee |
i) Annual Subscription
1. Subscriptions that are obtained during an accounting year (it may be related to current, previous or upcoming year) are reflected on the debit side of R & P Account.
2. Subscriptions related to the present year whether yet to be received or already received reflects on the credit side of I & E account (Income and Expenditure)
3. Advance subscriptions received for the following year are reflected on Liabilities side of balance sheet.
4. Subscriptions which are due but yet to be received are shown on Assets part of Balance Sheet.
5. Subscriptions that are due but yet to receive are reflected on asset side of balance sheet.
ii) Specific donation
1. Specific donation amount is reflected on Debit side of R & P Accounts.
2. Specific donation amount is shown on Liabilities side of Balance Sheet. Because it is used for that specific purpose for which it is received.
iii) Sale of fixed assets
1. Amount received recorded on debit side of R & P Account.
2. Profit/Loss is credited/debited to I & E Account.
3. Book value of asset deducted from the respective asset on Asset side of Balance Sheet
iv) Sale of old periodicals
1. Amount received reflects on the debit side of R & P Account.
2. Sale of old periodical is counted as revenue receipts, hence reflects on credit side of I & E Account.
v) Sale of sport Materials
1. Amount received is debited to R & P Account
2. Sport material sale is revenue earned, hence reflects on credit side of I & E Account.
vi) Life Membership Fees
1. It is considered as a receipt for a NPO. Hence, debited to R & P Account
2. It is one-time fee and hence treated as Capital receipts, hence, added to Capital Fund on liabilities side of Balance Sheet
6. Show the treatment of items of Income and Expenditure Account when there is a specific fund for those items.
A NPO (Not-for-Profit organisation) has different sources of receipts in the form of subscriptions, donations, government grants etc. Of these some receipts are general while some are specific. Specific receipts are used only for the purpose for which it is received while general receipts can be used for any purpose. The specific receipts are not considered as revenue income for the Not-for-Profit organisation and therefore are reflected in I & E account.
In a way, specific receipts are considered as liabilities to the Not-for-Profit organisation as these amounts are received for specific purpose and cannot be used elsewhere. These are reflected in Liabilities side of Balance Sheet, until and unless it is completely used for the purpose it was received. If such amount is invested in the form of shares or debentures, then it is known as funds such as prize funds, match funds etc. The interest earned on such investment are not credited to I & E Account, instead it is credited to the respective fund account.
Similarly, any expense that is incurred for such funds gets debited from respective fund account. Such funds are shown in the liabilities side of Balance Sheet. If the expenses exceed the receipts of the fund, the difference gets reflected in I & E Account.
Treatment for items received for specific purpose
| (Tournament/Match/Prize, etc.) Fund Account | ||||||||
| Dr. | Cr. | |||||||
| Date | Particulars | L.F. | Amount | Date | Particulars | L.F. | Amount | |
| Expenses(expenses incurred like, match expenses, tournament expenses) | Balance b/d | |||||||
| Incomes(Income or interest earned on funds invested in the form of donation, interests, dividends, etc.) | ||||||||
| Balance c/d(see explanation) | (a) | Income and Expenditure A/c (see explanation) | (b) | |||||
Explanation (a)
When receipts are more than expenses meant for specific purpose, that time the difference between receipts and expenses is shown on balance sheet in the liabilities side.
| Balance Sheet | ||||
| Specific Fund (i.e. Tournament, Match, Prize Fund, etc.) | Tournament Fund Investment | |||
Explanation (b)
When expenses are more than receipts meant for specific purpose, that time the difference between expenses and receipts is shown in I & E account at the expenditure side.
| Income and Expenditure A/c | ||||
| Expenditure | Amount | Income | Amount | |
| Expenses(I.e. Tournament, Match, Prize Expenses etc. except capital expenditure like, i.e. expenses on construction of building) | ||||
7. What is Receipt and Payment Account? How is it different from Income and Expenditure Account?
A receipts and payments account is a summary of actual cash receipts and payments that is extracted from the cash book over a certain time period. All the cash received is recorded on the Receipts and all cash payments are recorded in Payments side of the Receipts and Payments Account. This account is prepared on the basis of all the cash and bank transactions that are recorded in Cash Book. It records all cash and bank transactions that are of revenue and capital nature. It records all transactions i.e. bank receipts and cash receipts.
This account helps in determining the closing balance of bank and cash receipts and thereby assess cash position of an NPO.
| Basis of Comparison | Receipts and Payments Account | Income and Expenditure Account |
| Nature | Contains bank and cash transaction summary. | Contains summary of income and expenses of current year |
| Revenue and Capital | Both revenue and capital transactions are recorded | Only revenue transactions are recorded |
| Debit Side | Records cash and bank receipts are recorded | Records expenses and losses incurred for the current accounting period |
| Credit side | Records payments received in form of cash and cheques | Records incomes and gains during the current accounting period |
| Account Type | Real Account | Nominal Account |
| Accounting Period | Records receipts and payments made during the year which may be related to current, previous or next accounting year | Records only the expenditure and income made during the current accounting year |
| Object | Shows the cash position of NPO | Shows the net results in terms of deficits or surplus |
| Depreciation | Non-cash items like depreciation is not included | Includes non-cash items like depreciation, bad-debts for determining net profit or loss. |
| Adjustment | Before preparing financial statements the Payments and Receipts received during the year can be adjusted. | Cash and non-cash transactions can be adjusted |
| System | Cash basis | Accrual Basis |
Numerical Questions for NCERT Accountancy Solutions Class 12 Part 1 Chapter 1
1. From the following particulars taken from the Cash Book of a health club, prepare a Receipts and Payments Account.
| Particulars | ₹ |
| Opening balance: | |
| Cash in Hand | 5,000 |
| Cash at Bank | 25,000 |
| Subscriptions | 1,65,000 |
| Donations | 35,000 |
| Investment Purchased | 80,000 |
| Rent Paid | 20,000 |
| General Expenses | 21,500 |
| Postage and stationery | 2,000 |
| Courier charges | 1,000 |
| Sundry Expenses | 2,500 |
| Closing Cash in Hand | 12,000 |
The solution for this question is as follows:
| Books of Health ClubReceipt and Payment Account | |||||||
| Dr. | Cr. | ||||||
| Receipts | Amount₹ | Payments | Amount₹ | ||||
| Balance b/d | Investment | 80,000 | |||||
| Cash in Hand | 5,000 | Rent | 20,000 | ||||
| Cash at Bank | 25,000 | 30,000 | General Expenses | 21,500 | |||
| Subscriptions | 1,65,000 | Postage and Stationery | 2,000 | ||||
| Donations | 35,000 | Courier Charges | 1,000 | ||||
| Sundry Expenses | 2,500 | ||||||
| Balance c/d | |||||||
| Cash in Hand | 12,000 | ||||||
| Cast at Bank | 91,000 | 1,03,000 | |||||
| (Balancing figure) | |||||||
| 2,30,000 | 2,30,000 | ||||||
2. The Receipt and Payment Account of Harimohan charitable institution is given:
| Receipt and Payment Account for the year ending March 31, 2015 | |||
| Receipts | Amount₹ | Payments | Amount₹ |
| Balance b/d: | Furniture | 3,000 | |
| Cash at Bank | 22,000 | Investments | 55,000 |
| Cash in Hand | 8,800 | Advance for building | 20,000 |
| Donations | 32,000 | Charities | 60,000 |
| Subscriptions | 50,200 | Salaries | 10,400 |
| Endowment Fund | 60,000 | Rent and Taxes | 4,000 |
| Legacies | 24,000 | Printing | 1,000 |
| Interest on Investment | 3,800 | Postage | 300 |
| Interest on Deposits | 800 | Advertisements | 1,100 |
| Sale of old newspapers | 500 | Insurance | 4,800 |
| Balance c/d: | |||
| Cash at Bank | 32,000 | ||
| Cash in Hand | 10,500 | ||
| 2,02,100 | 2,02,100 | ||
Prepare the Income and Expenditure Account for the Year ended on March 31, 2015 after considering the following:
| (i) | It was decided to treat Fifty per cent of the amount received on account of Legacies and Donations as income. |
| (ii) | Liabilities to be provided for are: |
| Rent ₹ 800; Salaries ₹ 1,200; advertisement ₹ 200. | |
| (iii) | ₹ 2,000 due for interest on investment was not actually received. |
The solution for this question is as follows
| Books of Harimohan Charitable InstitutionIncome and Expenditure Account | ||||||
| Dr. | Cr. | |||||
| Expenditure | Amount₹ | Income | Amount₹ | |||
| Rent and Taxes | 4,000 | Donations | 16,000 | |||
| Add: Outstanding | 800 | 4,800 | Legacies | 12,000 | ||
| Subscriptions | 50,200 | |||||
| Salaries | 10,400 | Interest on Investment | 3,800 | |||
| Add: Outstanding | 1,200 | 11,600 | Add: Accrued Interest | 2,000 | 5,800 | |
| Advertisement | 1,100 | Interest on Deposits | 800 | |||
| Add: Outstanding | 200 | 1,300 | Sale of Old Newspapers | 500 | ||
| Charities | 60,000 | |||||
| Printing | 1,000 | |||||
| Postage | 300 | |||||
| Insurance | 4,800 | |||||
| Surplus (Excess of Income over Expenditure) | 1,500 | |||||
| 85,300 | 85,300 | |||||
3. From the following particulars, prepare Income and Expenditure account:
| Details | Amount ₹ |
| Fees collected, including ₹ 80,000 on account of the previous year | 5,20,000 |
| Fees for the year outstanding | 30,000 |
| Salary paid, including ₹ 5,000 on account of the previous year | 68,000 |
| Salary outstanding at the end of the year | 3,000 |
| Entertainment expenses | 8,000 |
| Tournament expenses | 25,000 |
| Meeting Expenses | 18,000 |
| Traveling Expenses | 7,000 |
| Purchase of Books and Periodicals, including ₹ 31,000 for purchase of Books | 40,000 |
| Rent | 15,000 |
| Postage, telegrams and telephones | 6,000 |
| Printing and Stationery | 18,000 |
| Donations received | 25,000 |
The solution for this question is as follows
| Income and Expenditure Account | ||||||
| Dr. | Cr. | |||||
| Expenditure | Amount₹ | Income | Amount₹ | |||
| Salaries | 68,000 | Fees Collected | 5,20,000 | |||
| Less: Previous year’s Outstanding | (5,000) | Less: Previous year’s Outstanding | (80,000) | |||
| 63,000 | 4,40,000 | |||||
| Add: Current year’s Outstanding | 3,000 | 66,000 | Add: Current year’s Outstanding | 30,000 | 4,70,000 | |
| Entertainment Expenses | 8,000 | Donations | 25,000 | |||
| Tournament Expenses | 25,000 | |||||
| Meeting Expenses | 18,000 | |||||
| Traveling Expenses | 7,000 | |||||
| Purchases of Periodicals (40,000 – 31,000) | 9,000 | |||||
| Postage, Telegrams and Telephone’s | 6,000 | |||||
| Rent | 15.000 | |||||
| Printing and Stationery | 18,000 | |||||
| Surplus (Excess of Income over Expenditure) | 3,23,000 | |||||
| 4,95,000 | 4,95,000 | |||||
NOTE: As per the solution, Excess of Income over Expenditure is ₹ 3, 23,000; however, as per the book, it is ₹ 3, 07,000.
4. Following is the information given in respect of certain items of a Sports Club. Show these items in the Income and Expenditure Account and the Balance Sheet of the Club:
| Particulars | ₹ |
| Sports Fund as on 1.4.2015 | 35,000 |
| Sports Fund Investments | 35,000 |
| Interest on Sports Fund | 4,000 |
| Donations for Sports Fund | 15,000 |
| Sports Prizes awarded | 10,000 |
| Expenses on Sports Events | 4,000 |
| General Fund | 80,000 |
| General Fund Investments | 80,000 |
| Interest on General Fund Investments | 8,000 |
The solution for this question is as follows
| Books of Sports ClubIncome and Expenditure Account | |||
| Dr. | Cr. | ||
| Expenditure | Amount₹ | Income | Amount₹ |
| Interest on General Fund Investments | 8,000 | ||
| Balance Sheet | ||||
| Liabilities | Amount₹ | Assets | Amount₹ | |
| Sports Fund | 35,000 | Sports Fund Investments | 35,000 | |
| Add: Interest on Sports Fund | 4,000 | General Fund Investments | 80,000 | |
| Add: Donations for Sports Fund | 15,000 | |||
| 54,000 | ||||
| Less: Expenses on Sports Event | (4,000) | |||
| Less: Prize Awarded | (10,000) | 40,000 | ||
| General Fund | 80,000 | |||
5. How will you deal with the following items while preparing for the Bombay Women Cricket Club its income and expenditure account for the year ending 31.3.2017 and its Balance Sheet as on 31.3.2017?
| ₹ | ||
| (a) | Donation received during the year for the construction of a permanent Pavilion | 12,25,000 |
| Expenditure incurred up to 31.3.2017 on its construction | 10,80,000 | |
| The total estimated expenditure on construction of Pavilion being | 25,00,000 | |
| (b) | Tournament Fund: | |
| Balance as on 1.4.2016 | 10,700 | |
| Subscriptions for tournament received during the year | 65,800 | |
| Expenditure incurred during the year on conducting tournaments | 72,400 | |
| (c) | Life Membership fee received during the year | 28,000 |
Give reasons for your answers
The solution for this question is as follows
(a)
| Books of Bombay Women Cricket ClubBalance Sheet as on March 31, 2017 | ||||
| Liabilities | Amount₹ | Assets | Amount₹ | |
| Donation for Pavilion | 12,25,000 | Construction of Pavilion in Progress | 10,80,000 | |
| Less: Exp. on construction of Pavilion | (10,80,000) | 1,45,000 | ||
| Capital | ||||
| Add: Pavilion Construction | 10,80,000 | 10,80,000 | ||
Reason:
Donation for construction of Pavilion is a donation for specific purpose.
Expenses on construction on Pavilion is a capital expenditure.
(b)
| Balance Sheet as on March 31, 2017 | ||||
| Liabilities | Amount₹ | Assets | Amount₹ | |
| Tournament Fund | 10,700 | |||
| Add: Subscription for Tournament | 65,800 | |||
| 76,500 | ||||
| Less: Tournament Expenses | (72,400) | 4,100 | ||
Reason
All funds received are treated as capital receipts and expenses related to any fund are deduced from the concerned funds.
(c)
| Balance Sheet as on March 31, 2017 | |||
| Liabilities | Amount₹ | Assets | Amount₹ |
| Life Membership Fees | 28,000 | ||
Reason
When there is no specific information on treatment of Life Membership fees, it is shown on liabilities side of Balance sheet as it is considered as capital receipt. On treated as revenue, it is shown in credit side of I & E Account.
6. From the following receipts and payments and information given below, Prepare Income and Expenditure Account and opening Balance Sheet of Adult Literacy Organisation as on December 31, 2017.
| Receipt and Payment Account for the year ending as on December 31, 2017 | ||||
| Receipts | Amount₹ | Payments | Amount₹ | |
| Balance b/d | General Expenses | 3,200 | ||
| Cash in hand | 4,000 | News paper | 1,850 | |
| Cash at Bank | 15,550 | Electricity | 3,000 | |
| Subscriptions | Fixed deposit with bank(on 31.06.2017) @ 10% p.a. | 18,000 | ||
| 2016 | 1,200 | |||
| 2017 | 26,500 | Books | 7,000 | |
| 2018 | 500 | 28,200 | Salary | 3,600 |
| Sale of old newspapers | 1,250 | Rent | 6,500 | |
| Govt. grant | 12,000 | Postage charges | 300 | |
| Sale of old furniture (book value ₹ 5, 000) | 3,700 | Furniture (purchased) | 10,500 | |
| Interest received on FD | 450 | Balance c/d | ||
| Cash in Hand | 3,000 | |||
| Cash at Bank | 8,200 | |||
| 65,150 | 65,150 | |||
Information:
(i) Subscription outstanding as on 31.12.2016 ₹ 2,000 and on December 31, 2017 ₹ 1,500.
(ii) On December 31, 2017 Salary outstanding ₹ 600, and one month Rent paid in advance.
(iii) On Jan. 01, 2016 organisation owned Furniture ₹ 12,000, Books ₹ 5,000.
The solution for this question is as follows:
| Books of Adult Literacy OrganisationIncome and Expenditure Account as on Dec. 31, 2017 | ||||||
| Dr. | Cr. | |||||
| Expenditure | Amount₹ | Income | Amount₹ | |||
| Loss on Sale of Old Furniture | 1,300 | Subscription | 26,500 | |||
| General Expenses | 3,200 | Add: Outstanding for 2017 | 1,500 | 28,000 | ||
| Newspapers | 1,850 | |||||
| Electricity | 3,000 | Sale of Old Newspapers | 1,250 | |||
| Salary | 3,600 | Government Grant | 12,000 | |||
| Add: Outstanding for 2017 | 600 | 4,200 | Interest received on F.D. | 450 | ||
| Add: Accrued Interest | 450 | 900 | ||||
| Rent | 6,500 | |||||
| Less: Prepaid for 2018 {6,500×(1/13)} | (500) | 6,000 | ||||
| Postages Charges | 300 | |||||
| Surplus (Excess of Income over Expenditure) | 22,300 | |||||
| 42,150 | 42,150 | |||||
| Balance Sheet as on Dec. 31, 2016 | ||||||
| Liabilities | Amount₹ | Assets | Amount₹ | |||
| Capital Fund on Dec. 31, 2016 (Balancing Figure) | 38,550 | Subscription Outstanding | 2,000 | |||
| Cash in Hand | 4,000 | |||||
| Cash at Bank | 15,550 | |||||
| Furniture | 12,000 | |||||
| Books | 5,000 | |||||
| 38,550 | 38,550 | |||||
| Balance Sheet as on Dec. 31, 2017 | |||||
| Liabilities | Amount ₹ | Assets | Amount ₹ | ||
| Capital | 38,550 | Prepaid Rent | 500 | ||
| Add: Surplus | 22,300 | 60,850 | Books | 5,000 | |
| Add: Purchases | 7,000 | 12,000 | |||
| Salary Outstanding | 600 | ||||
| Subscription Received in Advance for 2018 | 500 | Furniture | 12,000 | ||
| Add: Purchases | 10,500 | ||||
| 22,500 | |||||
| Less: Sale | (5,000) | 17,500 | |||
| Fixed Deposit | 18,000 | ||||
| Add: Accrued Interest | 450 | 18,450 | |||
| Cash in Hand | 3,000 | ||||
| Cash at Bank | 8,200 | ||||
| Subscription Outstanding for 2017 | 1,500 | ||||
| Add: Outstanding for 2016 | 800 | 2,300 | |||
| 61,950 | 61,950 | ||||
7. The following is the account of cash transactions of the Nari Kalayan Samittee for the year ended December 31, 2017:
| Receipts | Amount₹ | Payments | Amount₹ |
| 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 ₹ 1,000) | 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 ₹ 750, but subscription include ₹ 500 for the year 2018.
(b) In the beginning of the year the Sangh owned building ₹ 20,000 and furniture ₹ 3,000 and Books ₹ 2,000.
(c) Provide depreciation on furniture @ 5% (including purchase), books @ 10% and building @ 5%.
The solution for this question is as follows:
| Books of Nari Kalyan SamitteeIncome and Expenditure Account as on Dec. 31, 2017 | ||||
| Dr. | Cr. | |||
| Expenditure | Amount₹ | Income | Amount₹ | |
| Rent | 6,600 | Subscription | 32,500 | |
| Electric Charges | 3,200 | Add: Outstanding for 2017 | 750 | |
| Lecturer’s fee | 730 | 33,250 | ||
| Office Expenses | 1,480 | Less: Advance for 2018 | (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, 2016 | |||
| Liabilities | Amount₹ | Assets | Amount₹ |
| Capital Fund as Dec. 31, 2016 | 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, 2017 | ||||||
| Liabilities | Amount₹ | Assets | Amount₹ | |||
| 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 2018 | 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 | |||||
8. Following is the Receipt and Payment Account of Indian Sports Club, prepared Income and Expenditure Account, Balance Sheet as on December 31, 2017:
| Receipt and Payment Account for the year ending December 31, 2017 | |||
| Receipts | Amount₹ | Payments | Amount₹ |
| Balance b/d | 7,890 | Salary | 11,000 |
| Subscriptions | 52,000 | Electric charges | 5,500 |
| Life member ship fee | 2,200 | Billiard Table | 17,500 |
| Entrance fee | 3,200 | Office expenses | 4,100 |
| Tournament fund | 26,000 | Printing and Stationery | 2,300 |
| Locker Rent | 1,250 | Tournament expenses | 18,500 |
| Sale of old sports goods (Costing ₹ 2,200) | 2,500 | Repair of ground | 2,000 |
| Sale of Old Newspaper | 750 | Furniture purchased | 7,700 |
| Legacy | 37,500 | Sports equipment’s | 12,000 |
| Cash in Hand | 12,690 | ||
| Cash at Bank | 10,000 | ||
| Fixed Deposit (on 1.10.17 for 10% p.a) | 30,000 | ||
| 1,33,290 | 1,33,290 | ||
Other Information:
Subscription outstanding was on December 31, 2016 ₹ 1,200 and ₹ 3,200 on December 31, 2017. Locker rent outstanding on December 31, 2017 ₹ 250. Salary outstanding on December 31, 2017 ₹ 1,000.
On January 1, 2017, club has Building ₹ 36,000, furniture ₹ 12,000, and Sports equipment’s ₹ 17,500. Depreciation charged on these items @ 10% (including Purchase).
The solution for this question is as follows:
| Indian Sports ClubIncome and Expenditure Account as on Dec. 31, 2017 | |||||
| Dr. | Cr. | ||||
| Expenditure | Amount₹ | Income | Amount₹ | ||
| Salary | 11,000 | Subscriptions | 52,000 | ||
| Add: Outstanding for 2017 | 1,000 | 12,000 | Add: Outstanding for 2017 | 3,200 | |
| Electric Charges | 5,500 | 55,200 | |||
| Office Expenses | 4,100 | Less: Outstanding for 2016 | (1,200) | 54,000 | |
| Printing and Stationery | 2,300 | ||||
| Repair of Ground | 2,000 | Locker Rent | 1,250 | ||
| Depreciation on: | Add: Outstanding for 2017 | 250 | 1,500 | ||
| Furniture | 1,970 | ||||
| Building | 3,600 | Entrance Fees | 3,200 | ||
| Sports Equipments | 2,730 | 8,300 | Profit on Sale of Sports | ||
| Surplus | 26,300 | Equipments (₹ 2,500 – ₹ 2,200) | 300 | ||
| Sale of Old Newspapers | 750 | ||||
| Accrued Interest | 750 | ||||
| 60,500 | 60,500 | ||||
| Balance Sheet as on January 01, 2016 | |||||
| Liabilities | Amount₹ | Assets | Amount₹ | ||
| Capital Fund (Balancing Figure) | 74,590 | Subscription Outstanding | 1,200 | ||
| Building | 36,000 | ||||
| Furniture | 12,000 | ||||
| Sports Equipments | 17,500 | ||||
| Cash and Bank | 7,890 | ||||
| 74,590 | 74,590 | ||||
| Balance Sheet as on Dec. 31, 2017 | |||||
| Liabilities | Amount₹ | Assets | Amount₹ | ||
| Salary Outstanding | 1,000 | Subscripting Outstanding | 3,200 | ||
| Tournament Fund | 26,000 | Locker Rent Outstanding | 250 | ||
| Less: Tournament Expenses | 18,500 | 7,500 | Building | 36,000 | |
| Less: 10% Depreciation | (3,600) | 32,400 | |||
| Capital fund | 74,590 | ||||
| Add: Life Membership Fee | 2,200 | Furniture | 12,000 | ||
| Add: Legacy | 37,500 | Add: Purchases | 7,700 | ||
| Add: Surplus | 26,300 | 1,40,590 | 19,700 | ||
| Less: 10% Depreciation | (1,970) | 17,730 | |||
| Sports Equipments | 17,500 | ||||
| Add: Purchases | 12,000 | ||||
| 29,500 | |||||
| Less: Sales | (2,200) | ||||
| 27,300 | |||||
| Less: 10% Depreciation | (2,730) | 24,570 | |||
| Billiard Table | 17,500 | ||||
| Cash in hand | 12,690 | ||||
| Cash at Bank | 10,000 | ||||
| Fixed Deposit | 30,000 | ||||
| Add: Accrued Interest | 750 | 30,750 | |||
| 1,49,090 | 1,49,090 | ||||
9. From the following Receipt and Payment Account of Jan Kalyan Club, prepare Income and Expenditure Account and Balance Sheet for the year ending March 31, 2017.
| Receipt and Payment Account for the year ending March 31, 2017 | |||
| Receipts | Amount₹ | Payments | Amount₹ |
| Cash in hand as on 1.4.16 | 6,800 | Salaries | 24,000 |
| Subscription | 60,200 | Traveling Expenses | 6,000 |
| Donation | 3,000 | Stationery | 2,300 |
| Sale of furniture (Book value ₹ 6000) | 4,000 | Rent | 16,000 |
| Entrance fee | 800 | Repair | 700 |
| Life membership fee | 7,000 | Books purchased | 6,000 |
| Interest on investment (@ 5% for full year) | 5,000 | Building purchased | 30,000 |
| Cash in hand as 31.3.2017 | 1,800 | ||
| 86,800 | 86,800 | ||
Additional Information:
| As on1.04.2016 | As on31.03.2017 | ||
| (i) | Subscription received in advance | 1,000 | 3,200 |
| (ii) | Outstanding subscription | 2,000 | 3,700 |
| (iii) | Stock of stationery | 1,200 | 800 |
| (iv) | Books | 13,500 | 16,500 |
| (v) | Furniture | 16,000 | 8,000 |
| (vi) | Outstanding rent | 1,000 | 2,000 |
The solution for this question is as follows:
| Books of Jan Kalyan ClubIncome and Expenditure Account as on 31 March 2017 | |||||
| Dr. | Cr. | ||||
| Expenditure | Amount₹ | Income | Amount₹ | ||
| Loss on Sale of Furniture (₹ 6,000 – ₹ 4,000) | 2,000 | Subscription | 60,200 | ||
| Salaries | 24,000 | Less: Outstanding for 2016 | (2,000) | ||
| Traveling Expenses | 6,000 | 58,200 | |||
| Stationery | 2,300 | Add: Outstanding for 2017 | 3,700 | ||
| Add: Opening Stock | 1,200 | 61,900 | |||
| 3,500 | Add: Advance in 2016 | 1,000 | |||
| Less: Closing Stock | (800) | 2,700 | 62,900 | ||
| Less: Advance in 2017 | (3,200) | 59,700 | |||
| Repairs | 700 | ||||
| Rent | 16,000 | Donation | 3,000 | ||
| Less: Outstanding for 2016 | (1,000) | Entrance Fees | 800 | ||
| 15,000 | Interest on Investments | 5,000 | |||
| Add: Outstanding for 2017 | 2,000 | 17,000 | |||
| Depreciation on Books | 3,000 | ||||
| Depreciation on Furniture | 2,000 | ||||
| Surplus | 11,100 | ||||
| 68,500 | 68,500 | ||||
| Balance Sheet as on April 01, 2016 | |||||
| Liabilities | Amount₹ | Assets | Amount₹ | ||
| Advance Subscription | 1,000 | Cash in Hand | 6,800 | ||
| Outstanding Rent | 1,000 | Investment {5,000 × (100/5)} | 1,00,000 | ||
| Capital Fund (Balancing figure) | 1,37,500 | Subscription Outstanding | 2,000 | ||
| Stock of Stationery | 1,200 | ||||
| Books | 13,500 | ||||
| Furniture | 16,000 | ||||
| 1,39,500 | 1,39,500 | ||||
| Balance Sheet as on March 31, 2017 | |||||
| Liabilities | Amount₹ | Assets | Amount₹ | ||
| Advance Subscription | 3,200 | Subscription Outstanding | 3,700 | ||
| Outstanding Rent | 2,000 | Stock of Stationery | 800 | ||
| Capital Fund | 1,37,500 | Investments | 1,00,000 | ||
| Add: Life Membership Fees | 7,000 | ||||
| Add: Surplus | 11,100 | 1,55,600 | Books | 13,500 | |
| Add: Purchases | 6,000 | ||||
| 19,500 | |||||
| Less: Depreciation | (3,000) | 16,500 | |||
| Building | 30,000 | ||||
| Cash in Hand | 1,800 | ||||
| Furniture | 16,000 | ||||
| Less: Sales | 6,000 | ||||
| 10,000 | |||||
| Less: Depreciation | (2,000) | 8,000 | |||
| 1,60,800 | 1,60,800 | ||||
10. Receipt and Payment Account of Shankar Sports club is given below, for the year ended March 31, 2017
| Receipt and Payment Account for the year ending March 31, 2017 | |||
| Receipts | Amount₹ | Payments | Amount₹ |
| Opening Cash in hand | 2,600 | Rent | 18,000 |
| Entrance fees | 3,200 | Wages | 7,000 |
| Donation for building | 23,000 | Billiard table | 14,000 |
| Locker rent | 1,200 | Furniture | 10,000 |
| Life membership fee | 7,000 | Interest | 2,000 |
| Profit from entertainment | 3,000 | Postage | 1,000 |
| Subscription | 40,000 | Salary | 24,000 |
| Cash in hand | 4,000 | ||
| 80,000 | 80,000 | ||
Prepare Income and Expenditure Account and Balance Sheet with help of following Information:
Subscription outstanding on March 31, 2016 is ₹ 1, 200 and ₹ 2,300 on March 31, 2017, opening stock of postage stamps is ₹ 300 and closing stock is ₹ 200, Rent ₹ 1,500 related to 2015 and ₹ 1,500 is still unpaid.
On April 01, 2016 the club owned furniture ₹ 15,000, Furniture valued at ₹ 22,500
On March 31, 2017. The club took a loan of ₹ 20,000 (@ 10% p.a.) in 2017.
The solution for this question is as follows:
| Books of Shankar Sports ClubIncome and Expenditure Account as on 31 Dec. 2017 | ||||
| Dr. | Cr. | |||
| Expenditure | Amount₹ | Income | Amount₹ | |
| Rent | 18,000 | Entrance Fees | 3,200 | |
| Add: Outstanding for 2017 | 1,500 | Locker Rent | 1,200 | |
| 19,500 | Profit from Entertainment | 3,000 | ||
| Less: Outstanding for 2016 | (1,500) | 18,000 | ||
| Subscription | 40,000 | |||
| Wages | 7,000 | Less: Outstanding for 2016 | (1,200) | |
| Depreciation on Furniture | 2,500 | 38,800 | ||
| Interest | 2,000 | Add: Outstanding for 2017 | 2,300 | 41,100 |
| Postage | 1,000 | Deficit (Balancing Figure) | 6,100 | |
| Add: Opening Stock | 300 | |||
| 1,300 | ||||
| Less: Closing Stock | (200) | 1,100 | ||
| Salaries | 24,000 | |||
| 54,600 | 54,600 | |||
| Balance Sheet as on December 31, 2016 | |||
| Liabilities | Amount₹ | Assets | Amount₹ |
| Rent Outstanding | 1,500 | Cash in Hand | 2,600 |
| 10% Loan | 20,000 | Subscription Outstanding | 1,200 |
| Furniture | 15,000 | ||
| Stock of Postage Stamps | 300 | ||
| Capital fund Deficit (Balancing figure) | 2,400 | ||
| 21,500 | 21,500 | ||
| Balance Sheet as on December 31, 2017 | ||||||
| Expenditure | Amount₹ | Income | Amount₹ | |||
| Rent Outstanding | 1,500 | Subscription Outstanding | 2,300 | |||
| 10% Loan | 20,000 | Stock of Postage Stamps | 200 | |||
| Donation for Building | 23,000 | Billiard Table | 14,000 | |||
| Capital Fund | (2,400) | Furniture | 15,000 | |||
| Add: Life Membership Fee | 7,000 | Add: Purchases | 10,000 | |||
| Less: Deficit | (6,100) | 25,000 | ||||
| Less: Depreciation | (2,500) | 22,500 | ||||
| Cash in Hand | 4,000 | |||||
| * Capital Fund (Deficit) | 1500 | |||||
| 44,500 | 44,500 | |||||
* NOTE 1:
| Capital Fund | (2,400) | ||
| Add: | Life Membership Fees | 7,000 | |
| Less: | Deficit | (6,100) | |
| Net Deficit | (1,500) |
11. Prepare Income and Expenditure Account and Balance Sheet for the year ended March 31, 2016 from the following Receipt and Payment Account and Balance Sheet of culture club:
| Receipt and Payment Account for the year ending March 31, 2016 | ||||
| Receipts | Amount(₹) | Payments | Amount(₹) | |
| Opening cash balance | 12,000 | Furniture | 4,000 | |
| Subscription | Telephone expenses | 800 | ||
| 2014-15 | 2,000 | Salary | ||
| 2015-16 | 22,000 | 24,000 | 2014-15 | 1,000 |
| Entrance fees | 2,800 | 2015-16 | 4,000 | |
| Locker rent | 1,000 | Newspapers | 700 | |
| Life membership fee | 1,200 | Sundry expenses | 1,000 | |
| Government grant | 11,000 | Defence bonds | 18,000 | |
| Land | 20,000 | |||
| Closing cash balance | 2,500 | |||
| 52,000 | 52,000 | |||
| Balance Sheet for the year ending March 31, 2016 | |||
| Liabilities | Amount(₹) | Assets | Amount(₹) |
| Advance locker rent | 200 | Cash in hand | 12,000 |
| Subscription received in Advance | 1,000 | Outstanding subscription | 3,000 |
| Outstanding salary | 2,000 | Building | 35,000 |
| Loan | 10,000 | ||
| Capital fund | 36,800 | ||
| 50,000 | 50,000 | ||
The solution for this question is as follows:
| Books of Culture ClubIncome and Expenditure Account as on March 31, 2016 | |||||||
| Dr. | Cr. | ||||||
| Expenditure | Amount₹ | Income | Amount₹ | ||||
| Telephone Expenses | 800 | Subscription | 22,000 | ||||
| Salary | 4,000 | Add: Advance Received in 2015 | 1,000 | 23,000 | |||
| Newspapers | 700 | ||||||
| Sundry Expenses | 1,000 | Entrance Fees | 2,800 | ||||
| Locker Rent | 1,000 | ||||||
| Surplus (Balancing figure) | 31,500 | Add: Advance Received in 2015 | 200 | 1,200 | |||
| Government Grants | 11,000 | ||||||
| 38,000 | 38,000 | ||||||
| Balance Sheet as on March 31, 2016 | |||||||
| Liabilities | Amount₹ | Assets | Amount₹ | ||||
| Capital Fund | 36,800 | Subscription Still Outstanding for 2015 | 1,000 | ||||
| Add: Life Membership Fees | 1,200 | (₹ 3,000 – ₹ 2,000) | |||||
| Add: Surplus | 31,500 | 69,500 | Furniture | 4,000 | |||
| Defence Bonds | 18,000 | ||||||
| Salary Still Outstanding for 2015 | 1,000 | Land | 20,000 | ||||
| Loan | 10,000 | Building | 35,000 | ||||
| Cash in Hand | 2,500 | ||||||
| 80,500 | 80,500 | ||||||
12. From the following Receipt and Payment Account prepare final accounts of a Unity Club for the year ended March 31, 2017.
| Receipt and Payment Accounts for the year ending March 31, 2017 | ||||
| Receipts | Amount₹ | Payments | Amount₹ | |
| Balance b/d | 15,000 | Furniture | 18,000 | |
| Sale of Old furniture (costing ₹ 6,000) | 4,000 | Library books | 10,000 | |
| Subscriptions: | Salaries | 72,000 | ||
| 2015–16 | 18,000 | General expenses | 18,000 | |
| 2016–17 | 60,000 | Electric charges | 12,000 | |
| 2017–18 | 12,000 | 90,000 | Newspapers | 33,800 |
| Sale of old newspapers | 10,800 | Postage | 3,000 | |
| Profit from entertainment | 44,000 | Stationery | 40,000 | |
| Rent | 84,000 | Audit fee | 8,000 | |
| Balance c/d | 33,000 | |||
| 2,47,800 | 2,47,800 | |||
| Balance Sheet as on March 31, 2016 | |||
| Liabilities | Amount₹ | Assets | Amount₹ |
| Outstanding Salary | 6,000 | Cash | 15,000 |
| Capital Fund | 6,94,000 | Outstanding subscription | 18,000 |
| Library Books | 30,000 | ||
| Furniture | 37,000 | ||
| Land and Building | 6,00,000 | ||
| 7,00,000 | 7,00,000 | ||
Additional Information:
| 1. | The Club had 500 members each paying an annual subscription of ₹ 150. |
| 2. | On 31.3.2016 salaries outstanding amounted to ₹ 1,200 and salaries paid included ₹ 6,000 for the year 2015–16. |
| 3. | Provide 5% depreciation on Land and Building.The solution for this question is as follows: |
| Books of Unity ClubIncome and Expenditure Account as on March 31, 2017 | ||||||
| Dr. | Cr. | |||||
| Expenditure | Amount ₹ | Income | Amount₹ | |||
| Loss on Sale of Old Furniture (4,000 – 6,000) | 2,000 | Subscription | ||||
| 500 members at ₹ 150 each | 75,000 | |||||
| Salaries | 72,000 | Sale of Old Newspapers | 10,800 | |||
| Add: Outstanding for 2015–16 | 1,200 | Profit from Entertainment | 44,000 | |||
| 73,200 | Rent | 84,000 | ||||
| Less: Outstanding for 2016–17 | (6,000) | 67,200 | ||||
| General Expenses | 18,000 | Deficit (Balancing figure) | 200 | |||
| Electric Charges | 12,000 | |||||
| Newspapers | 33,800 | |||||
| Postage | 3,000 | |||||
| Stationery | 40,000 | |||||
| Audit Fees | 8,000 | |||||
| Depreciation on Land and Building | 30,000 | |||||
| 2,14,000 | 2,14,000 | |||||
| Balance Sheet as on 31 March 2017 | ||||||
| Liabilities | Amount ₹ | Assets | Amount ₹ | |||
| Advance Subscription (for 2017–18) | 12,000 | Subscription Outstanding | 15,000 | |||
| Salaries Outstanding | 1,200 | Furniture | 37,000 | |||
| Capital Fund | 6,94,000 | Add: Purchases | 18,000 | |||
| Less: Deficit | (200) | 6,93,800 | 55,000 | |||
| Less: Sales | (6,000) | 49,000 | ||||
| Library Books | 30,000 | |||||
| Add: Purchases | 10,000 | 40,000 | ||||
| Land and Building | 6,00,000 | |||||
| Less: 5% Depreciation | (30,000) | 5,70,000 | ||||
| Cash and Bank | 33,000 | |||||
| 7,07,000 | 7,07,000 | |||||
13. Following is the information in respect of certain items of a Sports Club. You are required to show them in the Income and Expenditure Account and the Balance Sheet.
| Details | Amount₹ |
| Sports Fund as on April 1, 2016 | 80,000 |
| Sports Fund Investments | 80,000 |
| Interest on Sports Fund Investments | 8,000 |
| Donations for Sports Fund | 30,000 |
| Sports Prizes awarded | 16,000 |
| Expenses on Sports Events | 7,000 |
| General Fund | 2,00,000 |
| General Fund Investments | 2,00,000 |
| Interest on General Fund Investments | 20,000 |
The solution for this question is as follows:
| Income and Expenditure Account as on March 31, 2016 | |||||
| Dr. | Cr. | ||||
| Expenditure | Amount₹ | Income | Amount₹ | ||
| Interest on General Fund Investments | 20,000 | ||||
| Balance Sheet as on March 31, 2016 | |||||
| Liabilities | Amount₹ | Assets | Amount₹ | ||
| Sports Fund | 80,000 | Sports Fund Investments | 80,000 | ||
| Add: Interest on Sports Fund | General Fund Investments | 2,00,000 | |||
| Investments | 8,000 | ||||
| Add: Donation for Sports Fund | 30,000 | ||||
| 1,18,000 | |||||
| Less: Sports Prizes Awarded | (16,000) | ||||
| Less: Expenses on Sports Events | (7,000) | 95,000 | |||
| General Fund | 2,00,000 | ||||