NCERT Solutions for Class 12 Accountancy Chapter 1 - Accounting for Not For Profit Organisation
1. What is meant by ‘Not- for- Profit’ Organisations?
Ans. Not-for-Profit Organisations (NPO) are established with the main motive of providing services instead of earning profits, thereby enhancing the welfare of society. Such organisations consist of schools, hospitals, trade unions, religious organisations, etc. The person/s or the groups of individuals who manage, govern and administer the working of an NPO are known as trustees. NPO’s mainly earns through donations, subscriptions, life membership fees, grants etc. As these organisations are not set up with profit motive, they are not supposed to prepare Trading and Profit and Loss Account. Although they are required for maintain Receipt and Payments Account, Income and Expenditure Account and Balance Sheet..
2. State the meaning of Receipt and Payment Account.
Ans. Receipts and Payments Account is a summary of the Cash Book. All cash receipts are recorded on the Receipts side (i.e. Debit side) and all cash payments are recorded on the Payments side (i.e. Credit side) of Receipts and Payments Account. Based on the transctions of cash and bank, being recorded in cash book, receipts and payment account is prepared. It begins with the opening balance of cash and bank and ends with the closing balances of cash and bank (balancing figure) at the end of the accounting period. All cash and bank transactions both of capital and revenue nature are recorded in this. It records the cash and bank transactions relating to the current accounting period, and the cash and bank receipts (or payments) which are received during the current accounting period that may be related to the previous or next accounting period are also recorded.
This account results the closing balance of the cash and bank and also assess the cash position of an NPO.
3. State the meaning of Income and Expenditure Account.
Ans. Income and Expenditure Account (I&E) is same as the Profit and Loss Account in the sense that while the income and expenditure account is prepared to ascertain surplus or deficit during an accounting period, the profit and loss account is prepared to determine net profit or net loss incurred during an accounting period. I&E Account is a nominal account in nature and hence is prepared on the accrual basis. It records all transactions which are of revenue nature and which are related to the current accounting period (whether outstanding or prepaid). All expenses and losses are to be recorded on the debit side (Expenditure side) and all income and gains will be recorded on the credit side (Income side) of I&E Account. The closing balance or the balancing figure so obtained while preparing the I&E Account is termed as surplus (or deficit), if the sum total of the Income side exceeds (is lesser than) the sum total of the Expenditure side.
4. State the feature of Receipt and Payment Account.
Ans. The following are the features of Receipt and Payment Account:
- Nature: It is a Real Account in nature. It is a summary of Cash Book.
- Nature of Transactions: Only cash and bank transactions are recorded in this. Transactions other than cash and bank like depreciation, loss/ profit on sale of assets, etc. are not recorded in this account.
- No distinction between Capital and Revenue items: It records all cash and bank receipts and payments of both capital and revenue nature.
- Opening and closing balance: It begins with the opening balance of cash and bank and ends with the closing balance of the cash and bank (balancing figure) at the end of the accounting period.
- Purpose: It ascertains the cash position of an organisation. It also helps in determining the total amount paid and received during an accounting period.
5. What steps are taken to prepare Income and Expenditure Account from a Receipt and Payment Account?
Ans. The following steps are undertaken to prepare the Income and Expenditure Account (I&E) from Receipts and Payment Account (R&P).
Step 1: All the revenue expenditures paid for the current accounting period are transferred from the Payments side of R&P to the Expenditure side of I&E.
Step 2: All the revenue receipts of the current accounting period are taken from the Receipts side of R&P to the Income side of I&E.
Step 3: Expenses which are outstanding for the current period and expenses which are paid in advance (prepaid expenses) for the current period in the preceding accounting periods are to be added (adjusted) to their related expenses in the Step 1.
Step 4: Income which is outstanding (accrued income) for the current period and income which is received in advance for the current period in the preceding accounting periods are to be added (adjusted) to their related incomes in Step 2.
Step 5: Non-cash items like depreciation, appreciation for the current accounting period are required to be adjusted in the I&E.
Step 6: Once all the revenue items for the current accounting period are adjusted the Income and the Expenditure sides are totalled. If the sum total of the Income side is more (or is less) then the sum total of the Expenditure side, then the balancing figure is termed as surplus (or deficit).
6. What is subscription? How is it calculated?
Ans. Subscription is considered to be the main source of income for an NPO along with entrance fees, donations, grants, etc. Subscription is the amount of money which is paid by the members on periodic basis in order to keeping their membership with the organisation updated. The subscription is paid monthly, quarterly, half yearly or annually by the members.
It is reflected on in the debit side of the Receipt and Payment Account with the total amount received during the year that may be related to the current period and to the previous and next accounting period. In order to calculate the subscription for the current period, advance subscription received for the current period in the previous period and outstanding subscription for the current period are added to the subscription received during the current period. On the other hand, advance subscription received for the next accounting period during the current period and outstanding subscription for the preceding period are required to be deducted from the subscription received during the current period.
Calculation of Subscription:
| Subscription received during the year | — | |
| Add: Subscription received (in advance) during previous year for current year | — | |
| Add: Subscription outstanding at the end of the year | — | — |
| — | ||
| Less: Subscription received in advance for the next year | — | |
| Less: Subscription outstanding for the previous year | — | — |
| **Subscription shown in income and Expenditure Account | — |
**This subscription is related to the current accounting period and is shown in the income side of the income and expenditure account.
7. What is meant by Capital Fund? How is it calculated?
Ans. Capital fund is defined as the excess of NPOs’ assets over its liabilities. In simple words, the excess of assets over the liabilities for a profit earning organisation is termed as capital and for on NPO, the same is termed as capital fund. Any surplus or deficit calculate from Income and Expenditure account is added to (deducted from) the capital fund. It is also called Accumulated Fund.
Calculation of Subscription:
| 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 | — |
1. Explain the statement: “Receipt and Payment Account is a summarised version of Cash Book”.
Ans. Receipts and Payments Account is a summarised form of the Cash Book. This account is mainly prepared by those organisations which maintain their books on cash basis. All cash receipts are to be transferred on the Receipts side (i.e. Debit side) and all cash payments are to be transferred on the Payments side (i.e. Credit side) of Receipts and Payments Account. The preparation of receipt and payment account is based on the basis of cash and bank transactions recorded in the Cash Book. It begins with the opening balance of cash and bank and ends with the closing balances of cash and bank (balancing figure). All the cash and bank transactions both of capital and revenue nature taken place in the current year are recorded. It not only records the cash and bank transactions relating to the current accounting period, but also cash and bank receipts (or payments) received during the current accounting period that may be related to the previous or next accounting period. This account determines the closing balance of the cash and bank and also determines the cash position of an NPO. It secures as a foundation for the preparation of Income and Expenditure Account.
Similarities between Receipt and Payments Account and Cash Book
The following are the features of Receipt and Payment Account that are common to those of Cash Book:
1. Nature: It is the summary of the Cash Book. Just like Cash Book, the Receipt and Payment Account is also a Real Account in nature.
2. Nature of Transactions: Only cash and bank transactions are recorded in such a way which is similar to a Two-Column Cash Book. Transactions other than cash and bank like depreciation, loss/ profit on sale of assets, etc. are totally ignored and hence are not recorded in this account.
3. No distinction between Capital and Revenue items: It records all the cash and bank receipts and payments of both capital and revenue nature. Likewise, the transactions recorded in the Cash Book are also of both capital and revenue nature.
4. Opening and closing balance: It started with the opening balance of cash and bank and is closed with the closing balance of the cash and bank (balancing figure) at the end of a given accounting period.
5. Purpose: It helps in ascertaining the cash position of an organisation. It helps to determine the total amount paid and received during a given accounting period. Similarly, a Cash Book also helps us to assess the cash position of an organisation.
Therefore, based on the above mentioned points and similarities, the statement ‘Receipt and Payment Account is a summarised version of Cash Book’ is justified.
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.
Ans. Income and Expenditure Account (I&E) is similar to Profit and Loss Account (P&L), in the sense that the former is to be prepared by Not-for-profit-Organisations and the latter is maintained by profit earning organisations. Both the accounts are prepared on the accrual basis.
Similar to the P&L, all the expenses and losses takingplace in the current accounting period are transfered the debit side (Expenditure side) and all the gains and income of the current accounting period are transferred to the credit side (Income side) of the I&E. The balancing figure of the I&E is termed as surplus or deficit and that of the P&L is termed as net profit or net loss. The revenue items or transactions of current year are recorded in both the accounts.
Similarities between Income and Expenditure Account and Profit and Loss Account
I&E Account of an NPO is similar to the Profit and Loss Account of a profit earning business in the following manners:
1. Nature of Account: Both the accounts are nominal in nature.
2. Basis of Recording: Both the accounts record revenues and expenses which are of revenue nature and revenue income related to the current accounting period. The items of capital nature are also not ignored while preparing these accounts.
3. Period: Transactions of the current year are recorded in Income and Expenditure account in the same way as it is recorded in the profit and loss accounts. Transactions related to previous year or next year are excluded.
4. Adjustments: The treatment of adjustments like, outstanding expenses, prepaid expenses, income received in advance, income due but not received, depreciation, bad debts etc. is done in the way as it is being done in profit and loss account. Thus, both the accounts are prepared on the accrual basis.
3. Distinguish between Receipts and Payments Account and Income and Expenditure Account.
Ans.
| Basis of Difference | Receipts and Payments Account | Income and Expenditure Account |
| 1. Nature | It is a summarised form of cash and bank transactions | It summarises the current year income and expenses |
| 2. Revenue and Capital | It deals with the transactions related to both revenue and capital nature | It deals with the transactions related to revenue nature only. |
| 3. Debit Side | Debt side of this account is concerned with the cash and bank receipts during an accounting period. | Debt side of this account records expenses and losses incurred in the current accounting period. |
| 4. Credit Side | Credit side of this account keeps a track of payments in cash and through cheques. | Credit side of this account deals with income and gains earned in the current accounting period. |
| 5. Type of Account | It is a Real Account | It is a Nominal Account |
| 6. Period | It records receipts and payments made during the year that are related to the current accounting period or the preceding period and the succeeding accounting period. | It only keeps a track of income and expenditure made during the current accounting period. |
| 7. Object | This account fells the cash position of an NPO | This account reflects the net result terms of surplus or deficits due to the business activities during the current year. |
| 8. Opening Balance | This account has the opening balance of cash in hand and cash at bank or overdraft. | Usually it does not have any opening balance but sometimes surplus or deficits forwarded from the last accounting period (if not added to the Capital Fund) can be shown as the opening balance of this account. |
| 9. Closing Balance | The balancing figure of this account is the closing balance of cash in hand and cash at bank or overdraft. | The balancing figure is either surplus (if incomes > expenses) or deficit (if expenses > incomes). |
| 10. Depreciation | It does not undertake any non-cash items like depreciation, appreciation, etc. | It undertakes non-cash items like depreciation, bad-debts, provisions, etc. for determining the actual net profit or net loss. |
| 11. Adjustment | Receipts and Payments during the year can be adjusted prior to the financial statements. | Adjustments regarding both cash and non-cash transactions can be made. |
| 12. Transfer of Balance | The opening balance of this account is brought forward from the closing balance of the last year’s Receipts and Payments Account and the closing balance of this account is subsequently carried forward to the subsequent years. | In case of closing balance of this account being a surplus then it is added to the Capital Fund in the Balance Sheet. If the closing balance is deficit then it is deducted from the Capital Fund in the Balance Sheet. |
| 13. System | It is prepared on cash basis | It is prepared on accrual basis. |
4. Explain the basic features of Income and Expenditure Account and of Receipt and Payment Account.
Ans. Income and Expenditure Account (I&E) Account is a Nominal Account in nature which is prepared on the accrual basis. It deals with all transactions of revenue nature that are related to the current accounting period (whether outstanding or prepaid). All expenses and losses are transferred to the debit side (Expenditure side) and all income and gains are transferred to the credit side (Income side) of I&E Account. The balancing figure of I&E Account is termed as surplus (or deficit), incase of sum total of the income is more (or less) the total of expenditures.
The following are the basic features of Income and Expenditure Account
- Nature: It is a Nominal Account in nature. The debit side of I&E deals with all expenses and losses and the credit side reflects all incomes and gains related to the current accounting period.
- Basis: Its preparation is based on the Receipt and Payment Account (R & P). All the revenues transaction whether incomes or expenditures are transferred from R&P for the concerned year.
- Excludes Capital Transactions: The transactions which are of capital nature are not recorded in this account. For example, only profit or loss on sale of fixed assets is recorded whereas the total amount of sales is not to be considered because sale of fixed asset is a capital receipt.
- Akin to Profit and Loss Account: Income and Expenditure Account (I & E) is same as that of the Profit and Loss Account as because the former is prepared to determine surplus or deficit during an accounting period where as the latter is prepared to reflect net profit or net loss incurred during an accounting period.
- Records only Current Year’s items: This account is concerned with only those transactions that are related to current accounting year. In other words, transactions which are related to the preceding or succeeding accounting period are not to be recorded even if these transactions are realised in the current period.
- Adjustments: All the cash and non-cash items like, outstanding expenses, prepaid expenses, income received in advance, income due but not received, depreciation, bad debts, etc. are also adjusted in this account.
- Balancing Figure: The balance of this account is expressed in terms of either surplus (if incomes > expenses) or deficit (if expenses > incomes). The surplus balance is then further added to the Capital Fund, whereas, the deficit balance, is required to be deducted from the Capital Fund.
Receipts and Payments Account is a summarised form of the Cash Book. All the cash receipts are transferred on the Receipts side (i.e. Debit side) and all the cash payments are transferred on the Payments side (i.e. Credit side) of Receipts and Payments Account. Its preparation is based on the cash and bank transactions recorded in the Cash Book. It begins with the opening balance of cash and bank and ends with the closing balances of cash and bank (balancing figure). It reflects all the cash and bank transactions which are of both the capital and revenue nature. It records the cash and bank transactions relating to the current accounting period and also cash and bank receipts (or payments) received during the current accounting period that are related to the previous or next accounting period.
The following are the features of Receipt and Payment Account.
- Nature: It is a Real Account in nature. It is the summary of the Cash Book.
- Nature of Transactions: It deals with only cash and bank transactions. Transactions which are other than cash and bank like depreciation, loss/ profit on sale of assets, etc. are not transferred to this account.
- No distinction between Capital and Revenue items: It records all cash and bank receipts and payments irrespective of their nature being revenue or capital.
- Opening and closing balance: It begins with the opening balance of cash and bank and ends with the closing balance of the cash and bank (balancing figure).
- Purpose: It reflects the true cash position of an organisation. It also helps in determining the total amount paid and received during an accounting period.
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
Ans. (i) Annual Subscription
(a) Subscriptions that are received is an accounting year (whether related to the current year or previous and subsequent year) are to be recorded on the debit side of the Receipts and Payments Account.
(b) Subscription amount which is related to the current accounting year only, either received or yet to be received are recorded on the credit side of the Income and Expenditure Account.
(c) Subscriptions received in advance for the subsequent year are recorded on the Liabilities side of the Balance Sheet.
(d) Subscriptions due but not received yet are reflected on the Assets side of the Balance Sheet.
(ii) Specific donation
(a) The amount received for specific donation is transferred to the debit side of the Receipts and Payments Accounts.
(b) The amount which is received for specific donation is reflected on the Liabilities side of the Balance Sheet because it has to be utilised for the specific purpose for which it is received.
(iii) Sale of fixed assets
(a) The received amount from the sale of fixed assets are to be shown on the debit side of the Receipts and Payments Account.
(b) Profit (or loss) on the sale of fixed assets is credited (or debited) to the Income and Expenditure Account.
(c) The book-value of the fixed assets which are sold is deducted from its respective assets on the Assets side of the Balance Sheet.
(iv) Sale of old periodicals
(a) The amount received by selling the old periodicals are shown on the debit side of the Receipts and Payments Account.
(b) Amount received from the sale of old periodicals by any organisation is revenue receipts, and thereforce, it is to be recorded the credit side of the Income and Expenditure Account.
(v) Sale of sport Materials
(a) The amount received by selling the sport materials are required to be debited to the Receipt and Payments Account.
(b) The amount received from the sale of sport materials by any sport club is considered as revenue income, therefore, it has to be recorded on the credit side of the Income and Expenditure Account.
(vi) Life Membership Fees
(a) The amount which is supposed to be paid by a person in order to become a member of an organisation is called life membership fees. This is a receipt for an NPO, therefore it is to be debited to the Receipt and Payment Account.
(b) Life Membership fees is not of recurring nature and is received once for the whole life from a member as Life Membership Fees are capital receipts, these are added to the Capital Fund on the Liabilities side of the Balance Sheet.
6. Show the treatment of items of Income and Expenditure Account when there is a specific fund for those items.
Ans. To an NPO, here are some sources of receipts namely donations, subscriptions, government grants, etc. Some receipts are specific while others are general. The specific receipts can only be used for the specific purpose for which they are received, but, the general receipts can be used for any purpose. For example, if donation has been received for construction of buildings, then such a donation is a specific donation and thus, can be used for construction of the building only. The specific receipts are revenue income for the NPO and hence are not recorded in the Income and Expenditure Account. In fact, such receipts are liabilities to the NPO as these amounts are received for specific purpose and cannot be utilised elsewhere. Specific receipts are transferred to the Liabilities side of the Balance Sheet, until and unless they are fully set off against the purpose for which they were allotted and received. but, if these amounts are invested outside the organisations (in the form of shares, debentures, etc.), then will be considered as funds like, match funds, prize fund, etc. The interest and income earned on such investments are not to be recorded in the income and expenditure account, but the rather credited to the respective Fund Account. Similarly, the expenses incurred for such funds are not debited to the Income and Expenditure Account but, in fact, are debited to the respective Fund Account. These special funds are shown in the Liabilities side of the Balance Sheet. In case, if the related expenses exceed the related receipts of the fund, then the difference is reflected in the income and Expenditure Account.
| DR. | Fund Account (Tournament/Match/Prize, etc.) | Cr. | |||||
|---|---|---|---|---|---|---|---|
| Date | Particulars | L.F. | Amount (₹) | Date | Particulars | L.F. | Amount |
| 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) If the receipts exceed the expenses for specific purpose then the difference between the two is shown in the Liabilities side of the Balance Sheet.
(b) If the expenses exceed the receipts for the specific purpose then the difference between the two is shown in the Expenditure side of the Income and Expenditure Account.
7. What is Receipt and Payment Account? How is it different from Income and Expenditure Account?
Ans. Receipts and Payments Account is a summarised from of the Cash Book. All the cash receipts should be transferred to the Receipts side (i.e. Debit side) and all the cash payments should be transferred to the Payments side (i.e. Credit side) of Receipts and Payments Account. It is based on cash and bank transactions recorded in the Cash Book. It begins with the opening balance of cash and bank and ends with the balances of cash and bank (balancing figure). It records all cash and bank transactions both of capital and revenue nature. It records all the cash and bank transactions relating to the current accounting period, and also cash and bank receipts (or payments) received during the current accounting period that may be related to the previous or next accounting period.
Distinguish between Raceiples and Payments account and income and expenditure Account.
| Basis of Difference | Receipts and Payments Account | Income and Expenditure Account |
|---|---|---|
| It is a summarised for of cash and bank transactions. | It is a summarised form of current year income and expenses |
| 2. Revenue and Capital | It records transactions which are related to both revenue and capital nature. | It records transactions which are of revenue nature only. |
| 3. Debit side | Debit side of this account deals with cash and bank receipts during an accounting period. | Debit side of this account deals with expenses and losses incurred in the current accounting period. |
| 4. Credit side | Credit side of this account deals with the payments in cash and through cheques. | Credit side of this account deals with the transactions of income and gains earned in the current accounting period. |
| 5. Type of account | It is Real Accont | It is a Nominal Account |
| 6 Period | It records receipts and payments made during the year that may be related to the current accounting period or the preceding period and the succeeding accounting period. | It only records income and expenditure made during the current accounting period. |
| 7. Object | This account reflects the cash position of an NPO | This account helps in determining the net result terms of surplus or deficits due to the business activities during the year. |
| 8. Opening Balance | This account begins with the opening balance of cash in hand and cash at bank or overdraft. | Usually it has no opening balance but sometimes surplus or deficits forwarded from the last accounting period (if not added to the Capital Fund) can be reflected as the opening balance of this account. |
| 9. Closing balance | The balance of this account is expressed in terms of the closing balance of cash in hand and cash at bank or overdraft. | The balance is expressed in terms of either surplus (if incomes > expenses) or deficit (if expenses > incomes). |
| 10. Depreciation | It includes all the non-cash items like depreciation, appreciation, etc. | It includes non-cash items like depreciation, bad-debts, provisions, etc. in order to determine the actual net profit or net loss. |
| 11. Adjustment | Receipts and Payments throughout the year can be adjusted before preparation of the financial statements. | Adjustments regarding both cash and non-cash transactions can be made. |
| 12. Transfer of Balance | The opening balance of this account is taken from the last year’s Receipts and Payments Account and the closing balance of this account is further taken to subsequent year’s Receipts and Payments Account and is reflected in the Balance Sheet of the current accounting period. | If the closing balance of this account is a surplus then it is required to be added to the Capital Fund in the Balance Sheet. If the closing balance is deficit then it will be deducted from the Capital Fund in the Balance Sheet. |
| 13. System | It is prepared on cash basis | It is prepared on accrual basis. |
8. Distinguish between profit and not-for-profit organisation.
Ans.
| Basis for Comparision | Profit and Organisation | Non-Profit Organisation |
|---|---|---|
| A legal entity, which operates with the aim of earning profit for the owners, is known as for-profit or Profit organisation. | A non-profit organization is a legal entity, which operates with the aim of serving the society as a whole. |
| 2. Motive | Profit motive | Service Motive |
| 3. Form of Organization | Sole proprietorship, Partnership firm or company | Club, Trust, Public hospitals, Society, etc. |
| 4. Management | Sole proprietor, partners or directors, as the case may be. | Trustees, Committees or governing bodies. |
| 5. Management | Sole proprietor, partners or directors, as the case may be. | Trustees, committees or governing bodies. |
| 6 Source of revenue | Sale of goods and services. | Donation, subscription, membership fee etc. |
| 7. Commenced through | Owners contribute the capital | Funds from donation, subscriptions, government grant and so on. |
| 8. Financial Statement | Income statement, Balance Sheet and Cash Flow statement | Receipts & Payment A/c, income & Expenditure A/c and Balance Sheet. |
| 9. Money earned over and above | Profit, is added to capital account. | Surplus is added to capital fund. |
1. From the following particulars taken from the Cash Book of a health club, prepare a Receipts and Payments Account.
| Particulars | Amount |
|---|---|
| Openting 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 |
| Courter Charges | 1,000 |
| Sundry Expenses | 2,500 |
| Closing Cash in Hand | 12,000 |
Ans.
| Dr. | Books of Health Club | Cr. | |
|---|---|---|---|
| Receipts | Amount | Payments | Amount |
| To Balance b/d | By Investment | 80,000 | |
| Cash in Hand 5,000 | By Rent | 20,000 | |
| Cash at Bank 25,000 | 30,000 | By General Expenses | 21,500 |
| To Subscriptions | 1,65,000 | By Postage and Stationery | 2,000 |
| To Donations | 35,000 | By Courier Charges | 1,000 |
| By Sundry Expenses | 2,500 | ||
| By Balance c/d | |||
| Cash in Hand 12,000 | |||
| Cash 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
| Dr. | Receipt and Payment Account | Cr. | |
|---|---|---|---|
| Receipts | Amount (₹) | Payments | Amount (₹) |
| To Balance b/d | Furniture | 3,000 | |
| Cash in Bank | 22,000 | Investments | 55,000 |
| Cash at Hand | 8,800 | Advance for Building | 20,000 |
| To Donations | 16,000 | Charities | 60,000 |
| To Subscriptions | 50,200 | Salaries | 10,400 |
| Endowment Fund | 60,000 | Rent and Taxes | 4,000 |
| Legactes | 12,000 | 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 |
| Donation for Building | 16,000 | Balance c/d: | |
| Legacy for Building | 12,000 | 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) Liabilities to be provided for are:
Rent ₹800; Salaries ₹1,200; advertisement ₹200.
(ii) ₹2,000 due for interest on investment was not actually received.
| Dr. | Books of Harimohan Charitable Institution | Cr. | |
|---|---|---|---|
| Expenditure | Amount (₹) | Income | Amount (₹) |
| To Rent and Taxes 4,000 | By Donations | 16,000 | |
| Add: Outstanding 800 | 4,800 | By Legacies | 12,000 |
| To Salaries 10,400 | By Subscriptions | 50,200 | |
| Add: Outstanding 1,200 | 11,600 | By Interest on Investment 3,800 | |
| To Donations | Add: Accrued Interest 2,000 | 5,800 | |
| To Advertisment 1,100 | By Interest on Deposits | 800 | |
| Add: Outstanding 200 | 1,300 | By Sale of Old Newspapers | 500 |
| To Charities | 60,000 | ||
| To Printing | 1,000 | ||
| To Postage | 300 | ||
| To Insurance | 4,800 | ||
| To 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 |
| Entertainmnet Expenses | 8,000 |
| Tournament Expenses | 25,000 |
| Meeting Expenses | 18,000 |
| Travelling Expenses | 40,000 |
| Purchase of Books and Periodicals, including ₹31,000 for purchase of Books Rent | 15,000 |
| Postage, telegrams and telephones | 6,000 |
| Printing and Stationery | 18,000 |
| Donations Received | 25,000 |
Ans.
| Dr. | Income and Expenditure Account | Cr. | |
|---|---|---|---|
| Expenditure | Amount (₹) | Income | Amount (₹) |
| To Salaries 68,000 | By fees Collected 5,20,000 | ||
| Less: Previous year’s | Less: Previous year’s (80,000) | ||
| Outstanding (5,000) | Outstanding | ||
| 63,000 | 4,40,000 | ||
| Add: Current year’s | Add: Current year’s 30,000 | 4,70,000 | |
| Outstanding 3,000 | 66,000 | Outstanding | |
| To Entertainment Expenses | 8,000 | By Donations | 25,000 |
| To Tourmament Expenses | 25,000 | ||
| To Meeting Expenses | 18,000 | ||
| To Travelling Expenses | 7,000 | ||
| To Purchase of Periodicals | 9,000 | ||
| (40,000 – 31,000) | |||
| To Postage, Telegrams and Telephone’s | 6,000 | ||
| To Rent | 15,000 | ||
| To Printing and Stationery | 18,000 | ||
| To Surplus (Excess of Income over Expenditure) | 3,23,000 | ||
| 4,95,000 | 4,95,000 | ||
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:
| Details | Amount (₹) |
|---|---|
| Sports Fund as on 1.4.2015 | 35,000 |
| Sports Fund Investments | 35,000 |
| Interest on Sports Fund | 4,000 |
| Donations for Sports Fund Investment | 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 |
Ans.
| Dr. | Books of Sports Club | Cr. | |
|---|---|---|---|
| Expenditure | Amount (₹) | Income | Amount (₹) |
| Interest on General Fund Investments | 8,000 | ||
Ans.
| 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:
Details | Amount (₹) |
| (a) Donation received during the year for the construction of a permanent Pavillon | 12,25,000 |
| Expenditure incurred up to 31..3.2017 on its construction | 10,80,000 |
| The total estimated expenditure on construction of Pavillon 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 trounaments | 72,400 |
| (c) Life, Membership fee received during the year | 28,000 |
Give reasons for your answers.
Ans. (a)
| Balance 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 Pavillion is a capital expenditure.
| (b) | Balance Sheet as on March 31, 2017 | |||
Liabilities | Amount (₹) | Assets | Amount (₹) | |
| Tournament Fund | 10,700 | |||
| Add: Subscription for Trornament | 65,800 | |||
| 76,500 | ||||
| Add: Pavilion Construction | (72,400) | 4,100 | ||
Reason
All the received funds 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
Life Membership Fees are capital receipts and are therefore, shown on the Liabilities side of the Balance Sheet, if nothing is specifically mentioned about its treatment. But if it is required to be treated as revenue item, then it is shown on the credit side of the Income and Expenditure Account.
6. From the following receipts and payments and information given below, Prepare Income and Expenditure Account and opening Balance Sheet of Adult Literacy Orgnisation 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 | Newspaper | 1,850 | |
| Cash at Bank | 15,550 | Electricity | 3,000 | |
| Subscriptions | Fixed deposit with bank | 18,000 | ||
| (on 31.06.2017) @ 10% p.a. | ||||
| 2016 | 1,200 | Books | 7,000 | |
| 2017 | 26,500 | Salary | 3,600 | |
| 2018 | 500 | 28,200 | Rent | 6,500 |
| Sale of old newspapers | 1,250 | Postage charges | 300 | |
| Govt. grant | 12,000 | Furniture (purchased) | 10,500 | |
| Sale of old Furniture | 3,700 | Balance c/d | ||
| (book value ₹ 5,000) | ||||
| Interest received on FD | 450 | Cash in Hand | 3,000 | |
| Cash at Bank | 8,200 | |||
| 65,150 | 65,150 | |||
Information:
(i) Subscription outstanding as on 31.12.2016 were ₹2,000 and on December 31, 2017 were ₹1,500.
(ii) On December 31, 2017 Salary outstanding was ₹600, and one month Rent paid in advance.
(iii) On Jan. 01, 2016 orgnisation owned Furniture ₹12,000, Books ₹5,000.
Ans.
| Dr. | Books of Adult Literacy Organisation Income and Expenditure Account as on Dec. 31.2017 | Cr. | |
Expenditure | Amount (₹) | Income | Amount (₹) |
| To Loss on Sale of Old Furniture | 1,300 | By Subscription 26,500 | |
| To General Expenses | 3,200 | Add: Outstanding for 2017 1,500 | 28,000 |
| To Newspapers | 1,850 | By Subscriptions | |
| To Electricity | 3,000 | By Sale of Old Newspapers | 1,250 |
| To Salary 3,600 | By Government Grant | 12,000 | |
| Add: Outstanding for 2017 600 | 4,200 | By Interest received on F.D. 450 | |
| To Rent 6,500 | Add: Accrued Interest 450 | 900 | |
| Less: Prepaid for 2018 (500) | 6,000 | ||
| {6,500 × (1/13)} | |||
| To Postage Charges | 300 | ||
| To Surplus (Excess of Income over Expenditure) | 22,300 | ||
| 42,150 | 42,150 | ||
| Balance Sheet as on March 31, 2016 | |||
Liabilities | Amount (₹) | Assets | Amount (₹) |
| Capital Fund on Dec. 31, 2016 | 38,550 | Subscription Outstanding | 2,000 |
| (Balanceing Figure) | |||
| Cash in Hand | 4,000 | ||
| Cash at Bank | 15,550 | ||
| Furniture | 12,000 | ||
| Books | 5,000 | ||
| 38,550 | 38,550 | ||
| Balance Sheet as on March 31, 2017 | |||||
Liabilities | Amount (₹) | Assets | Amount (₹) | ||
| Capital 38,550 | 38,550 | Prepaid Rent | 500 | ||
| Add: Surplus | 22,300 | 60,850 | Books | 5,000 | |
| Salary Outstanding | 600 | Add: Purchases | 7,000 | 12,000 | |
| Subscription Received in Advance for 2018 | 500 | Furniture | 12,000 | ||
| Add: Purchases | 10,500 | 12,000 | |||
| 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 | 2,300 | |||
| Add: Outstanding for 2016 | 800 | ||||
| 61,950 | 61,950 | ||||
7. The following is the Receipt and Payment Account of the Nari Kalayan Samittee for the year ended December 31, 2017:
| Receipt and Payment Account for the year ending as on December 31, 2017 | |||
Receipts | Amount (₹) | Payments | Amount (₹) |
| Balance from last year b/d | 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 | 750 | Legal fee | 1,870 |
| (books value ₹ 1,000) | Books | 6,500 | |
| Interest | 350 | Furniture purchased | 8,600 |
| Expenses on nukar drama | 1,300 | ||
| Balance c/d | |||
| 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 Samiti 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%.
Ans.
| Dr. | Books of Nari Kalyan Samittee Income and Expenditure Account as on Dec. 31.2017 | Dr. | |||
Expenditure | Amount (₹) | Assets | Amount (₹) | ||
| To Rent | 6,600 | By Subscription | 32,500 | ||
| To Electric Charges | 3,200 | Add: Outstanding for 2017 | 750 | ||
| To Lecturer’s fee | 730 | 32,250 | |||
| To Office Expenses | 1,480 | Less: Advance for 2018 | (500) | 32,750 | |
| To Printing and Stationery | 1,050 | By Donation | 2,500 | ||
| To Legal Fee | 1,870 | By Profit from Entertainment | 7,250 | ||
| To Depreciation on: | By Interest | 350 | |||
| Books | 750 | ||||
| Furniture | 580 | ||||
| Building | 1,000 | 2,330 | |||
| To Expenses on Nukar Drama | 1,300 | ||||
| To Loss on Sale of Books | 250 | ||||
| To Surplus | 24,040 | ||||
| 42,850 | 42,850 | ||||
| Dr. | Balance Sheet as on March 31, 2017 | Cr. | |
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 March 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: 10% 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.
| Receipt and Payment Account for the year ending March 31, 2017 | |||
| Receipts | Amount (₹) | Payments | Amount (₹) |
| Balance b/d | 7,890 | Salary | 11,000 |
| Subscriptions | 52,000 | Electric charges | 5,500 |
| Life membership 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 equtpment | 2,500 | Repair of Ground | 2,000 |
| (Costing ₹ 2,200) | |||
| Sale of old newspaper | 750 | Furniture Purchased | 7,700 |
| Legacy | 37,500 | Sports Equipment | 12,000 |
| Cash in Hand | 12,690 | ||
| Cash in Bank | 10,000 | ||
| Fixed Deposit | 30,000 | ||
| (on 1.10.2017 for 10% p.a.) | |||
| 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,
Sports equipments ₹17,500. Depreciation charged on these items @ 10% (including Purchase).
| Dr. | Books of Jan Kalyan Club Income and Expenditure Account as on 31 March 2017 | Cr. | |||
| Expenditure | Amount(₹) | Income | Amount(₹) | ||
| To Salary | 11,000 | By Subscription | 52,000 | ||
| Add: Outstanding for 2017 | 1,000 | 12,000 | Add: Outstanding for 2017 | 3,200 | |
| To Electric Charges | 5,500 | 55,200 | |||
| To Office Expenses | 4,100 | Less: Outstanding for 2016 | (1,200) | 54,000 | |
| To Printing and Stationery | 2,300 | By Locker Rent | 1,250 | ||
| Repair of Ground | 2,000 | Add: Outstanding for 2017 | 250 | 1,500 | |
| To Depreciation on: | By Entrance Fees | 3,200 | |||
| Furniture | 1,970 | By Profit on Sale of Sports | |||
| Building | 3,600 | By Equipments (₹2,500 – ₹2,200) | 300 | ||
| Sports Equipments | 2,730 | 8,300 | By Sale of Old Newspapers | 750 | |
| To Surplus | 26,300 | By Accrued Interest | 750 | ||
| 60,500 | 60,500 | ||||
| Dr. | Books of Jan Kalyan Club Income and Expenditure Account as on 31 March 2017 | Cr. | |
| Expenditure | 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: Tournaments Expenses | 18,500 | 7,500 | Building | 36,000 | |
| Capital Fund | 74,590 | Less: 10% Depreciation | (3,600) | 32,400 | |
| Add: Life Membership Fee | 2,200 | 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 at 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 1.4.2016 | 6,800 | Salaries | 24,000 |
| Subscription | 60,200 | Travelling Expenses | 6,000 |
| Donation | 3,000 | Stationary | 2,300 |
| Sale of furniture | 4,000 | Rent | 16,000 |
| (Book value `6,000) | Repair | 700 | |
| Entrance fee | 800 | Books purchased | 6,000 |
| Life membership fee | 7,000 | Building purchased | 30,000 |
| Inerest on investment (@ 5% for full year) | 5,000 | Cash in hand as 31.03.2017 | 1,800 |
| 86,800 | 86,800 | ||
Additional Information:
| As on 01.04.2016 | As on 31.03.2017 | |
| (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 |
| Dr. | Books of Jan Kalyan Club Income and Expenditure Account as on 31 March 2017 | Cr. | |||
| Expenditure | Amount(₹) | Income | Amount(₹) | ||
| Loss on Sale of Furniture (₹6,000-₹4,000) | 2,000 | By Subscription | 60,200 | ||
| Less: Outstanding for 2016 | (2,000) | ||||
| To Salaries | 24,000 | ||||
| To Travelling Expenses | 6,000 | 58,200 | |||
| 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 | |||
| To Repairs | 700 | ||||
| To Repairs | 700 | ||||
| To Rent | 16,000 | By Donation | 3,000 | ||
| Less: Outstanding for 2018 | (1,000) | By Entrance Fees | 800 | ||
| 15,000 | By Interest on Investments | 5,000 | |||
| Add: Outstanding for 2017 | 2,000 | 17,000 | |||
| To Depreciation on Books | 3,000 | ||||
| To Depreciation on Furniture | 2,000 | ||||
| To Surplus | 11,100 | ||||
| To Surplus | 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 Stationary | 1,200 | ||
| Books | 13,500 | ||
| Furniture | 16,000 | ||
| 1,39,500 | 1,39,500 | ||
| Balance Sheet as on March 31, 2007 | |||||
| Liabilities | Amount(₹) | Assets | Amount(₹) | ||
| Advance Subscription | 3,200 | Subscription Outstanding | 3,700 | ||
| Outstanding Rent | 2,000 | Stock of Stationary | 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 | 7,000 | Interest | 2,000 |
| Life membership fee | 1,200 | Furniture | 10,000 |
| 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 1, 2016 the club owned furniture ₹15, 000, Furniture valued at ₹22,500 as on March 31, 2017.
On March 31, 2016, the club had a loan of ₹20,000 (@ 10% p.a).
| Books of Shankar Sports Club Income and Expenditure Account as on 31 March 2017 | |||||
| Expenditure | Amount(₹) | Income | Amount(₹) | ||
| To Rent | 18,000 | By Entrance Fees | 3,200 | ||
| Add: Outstanding for 2017 | 1,500 | By Locker Rent | 1,200 | ||
| 19,500 | By Profit from Entertainment | 3,000 | |||
| Less: Outstanding for 2016 | (1,500) | 18,000 | |||
| By Subscription | 40,000 | ||||
| Less: Outstanding for 2016 | (1,200) | ||||
| To Wages | 7,000 | ||||
| To Depreciation on Furniture | 2,500 | 38,800 | |||
| Add: Outsanding for 2017 | 2,300 | 41,100 | |||
| To Interest | 2,000 | ||||
| To Postage | 1,000 | By Deficit (Balancing Figure) | 6,100 | ||
| Add: Opening Stock | 300 | ||||
| 1,300 | |||||
| Less: Closing Stock | (200) | 1,100 | |||
| To Salaries | 24,000 | ||||
| 54,600 | 54,600 | ||||
| Balance Sheet as on March, 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 | ||||
| Stokc of Postage Stamps | 300 | ||||
| Capital fund Deficit (Balancing figure) | 2,400 | ||||
| 21,500 | 21,500 | ||||
| Balance Sheet as on March, 2017 | |||||
| Liabilities | Amount(₹) | Assets | 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) | 1,500 | ||||
| 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 | |||
| Particulars | Amount (₹) | Particulars | 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 fee | 2,800 | 2015-16 | 4,000 |
| Locker rent | 1,000 | Newspaper | 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, 2015 | |||
| 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 | ||
| Loan | 10,000 | ||
| Capital fund | 36,800 | ||
| 50,000 | 50,000 | ||
| Books of Culture Club Income and Expenditure Account as on March 31, 2016 | |||
| Expenditure | Amount (₹) | Payments | Amount (₹) |
| To Telephone Expenses | 800 | By Subscription 22,000 | |
| Add: Advance Received in 2015 1,000 | 23,000 | ||
| To Salary | 4,000 | To Newspapers | 700 |
| To Sundry Expenses | 1,000 | By Entrance Fees | 2,800 |
| By Locker Rent 1,000 | |||
| Add: Advance Received in 20015 200 | 1,200 | ||
| To Surplus (Balancing figure) | 31,500 | ||
| By Government Grants | 11,000 | ||
| 38,000 | 38,000 | ||
| Balance Sheet as on March 31, 2016 | |||
| Liabilities | Amount(₹) | Assets | Amount(₹) |
| Subscription Still Outstanding for 2015 (₹3,000 – ₹2,000) | 1,000 | ||
| Capital Fund 36,800 Add: Life | |||
| Membership Fees 1,200 | |||
| Add: Surplus 31,500 | 69,500 | Furniture | 4,000 |
| Defenec 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 |
| Salaries | 72,000 | ||
| Subscriptions | General expenses | 18,000 | |
| 2015-16 18,000 | Electric charges | 12,000 | |
| 2016-17 60,000 | Newspaper | 33,800 | |
| 2017-18 12,000 | 90,000 | Postage | 3,000 |
| Sale of old newspapers | 10,800 | Stationary | 40,000 |
| Profit from entertainment | 44,000 | Audit fee | 8,000 |
| Rent | 84,000 | 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 31.3.2017 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.
| Ans. | Books of Unity Club Income and Expenditure Accountas on March 31, 2017 | ||
| Expenditure | Amount (₹) | Income | Amount (₹) |
| To Loss on Sale of Old Furniture (4,000 – 6,000) | 2,000 | By Subscription | 75,000 |
| To Salaries 72,000 | By Sale of Old Newspaper | 10,800 | |
| Add: Outstanding for 2015-16 1,200 | By Profit from Entertainment | 44,000 | |
| 73,200 | By Rent | 84,000 | |
| Less: Outstanding for 2016-17 (6,000) | 67,200 | ||
| To General Expenses | 18,000 | By Deficit (Balancing figure) | 200 |
| To Electric Charges | 12,000 | ||
| To Newspapers | 33,800 | ||
| To Postage | 3,000 | ||
| To Stationary | 40,000 | ||
| To Audit Fees | 8,000 | ||
| To Depreciation on Land and Building | 30,000 | ||
| 2,14,000 | 2,14,000 | ||
| Balance Sheetas 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 | ||
| 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 |
| Ans. | Income and Expenditure Account as on March 31, 2016 | ||
| Expenditure | Amount (₹) | Income | Amount (₹) |
| By Interest on General Fund Investments | 20,000 | ||
| Balance Sheet (Extract) 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 | |||
| 1,18,000 | |||
| Less: Sports Prizes Awarded (16,000) | |||
| Less: Expenses on Sports Events (7,000) | 95,000 | ||
| General Fund | 2,00,000 | ||
14. Receipt and Payment Account of Maitrey Sports Club showed that `68,500 were received by way of subscriptions for the year ended on March 31, 2017:
The additional information was as under:
1. Subscription Outstanding as on March 31, 2016 were ₹6,500,
2. Subscription received in advance as on March 31, 2016 were ₹4,100,
3. Subscription Outstanding as on March 31, 2017 were ₹5,400,
4. Subscription received in advance as on March 31, 2017 were ₹2,500.
Show how that above information would appear in the final accounts for the year ended on March 31, 2017 of Maitrey Sports Club.
| Ans. | Books of Maitrey Sports Club Income and Expenditure Account as on March 31, 2017 | ||
| Expenditure | Amount (₹) | Income | Amount (₹) |
| By Subscription 68,500 | |||
| Less: O/s on Mar. 31, 2016 (6,500) | |||
| 62,000 | |||
| Add: Advance on Mar. 31, 2016 4,100 | |||
| Add: O/s on Mar. 31, 2017 5,400 | |||
| 71,500 | |||
| Less: Advance on Mar. 31 2017 (2,500) | 69,000 | ||
| Balance Sheet as on March 31, 2016 | |||
| Liabilities | Amount(₹) | Assets | Amount(₹) |
| Subscription in Advance | 4,100 | Subscription Outstanding | 6,500 |
15. Following is the Receipt and Payment account of Rohatgi Trust :
| Balance Sheet as on March 31, 2017 | |||
| Liabilities | Amount(₹) | Assets | Amount(₹) |
| Subscription in Advance | 2,500 | Subscription Outstanding | 5,400 |
| Receipt and Payment Account for the year ending December 31, 2017 | |||
| Receipts | Amount(₹) | Payments | Amount(₹) |
| Cash in hand | 14000 | Rent | 6,000 |
| Cash at bank | 60,000 | Salary | 12,000 |
| Subscription | Postage | 300 | |
| 2016 5,000 | Electricity charges | 6,000 | |
| 2017 83,000 | Purchase of furniture | 20,000 | |
| 2018 3,000 | 91,000 | Books | 3000 |
| Sale of investment | 90,000 | Defence Bonds | 1,50,000 |
| Interest on investment | 2,000 | Help to needy students | 22,000 |
| Sale of furniture | 3,200 | Cash in hand | 10,900 |
| (Book value ₹3,000) | Cash at bank | 30,000 | |
| 2,60,200 | 2,60,200 | ||
Prepare Income and expenditure account for the year ended December 31, 2017, and a balance sheet as on that date after the following adjustments:
Subscription for 2017, still owing were `7,000. Interest due on defence bonds was ₹7,000, Rent still owing was ₹1,000. The Book value of investment sold was ₹80,000, ₹30,000 of the investment were still in hand. Subscription received in 2017 included ₹400 from a life member. The total furniture on January 1, 2017 was worth ₹12,000. Salary paid for the year 2018 is ₹2,000.
| Ans. | Books of Rohatgi Trust Income and Expenditure Account as on December 31, 2017 | ||
| Expenditure | Amount (₹) | Income | Amount (₹) |
| To Rent 6,000 | By Subscription 83,000 | ||
| Add: Outstanding 1,000 | 7,000 | Add: Outstanding for 2017 7,000 | |
| 90,000 | |||
| Salary 12,000 | Less: Life Membership Fees (400) | 89,600 | |
| Less: Advance for 2018 (2,000) | 10,000 | ||
| To Interest Accrued on Defence Bonds | 7,000 | ||
| To Profit on Sale of Investment | 10,000 | ||
| To Postage | 300 | (₹90,000 – ₹80,000) | |
| To Profit on Sale of Furniture | 200 | ||
| To Electricity Charges | 6,000 | (₹3,200 – ₹3,000) | |
| To Help to Needy Students | 22,000 | To Interest on Investments | 2,000 |
| To Surplus (Balancing Figure) | 63,500 | ||
| 1,08,800 | 1,08,800 | ||
| Balance Sheet as on December 31, 2016 | |||
| Liabilities | Amount(₹) | Assets | Amount(₹) |
| Capital fund (Balancing Figure) | 2,01,000 | Subscription Outstanding | 5,000 |
| Investment (₹80,000 + ₹30,000) | 1,10,000 | ||
| Furniture | 12,000 | ||
| Cash in hand | 14,000 | ||
| Cash at bank | 60,000 | ||
| 2,01,000 | 2,01,000 | ||
| Balance Sheet as on March, 2017 | |||
| Liabilities | Amount(₹) | Assets | Amount(₹) |
| Advance Subscription | 3,000 | Subscription Outstanding | 7,000 |
| Rent Outstanding | 1,000 | Defence Bonds 1,50,000 | |
| Capital Fund 2,01,000 | Add: Accured Interest on Defence | ||
| Bonds 7,000 | 1,57,000 | ||
| Add: Surplus 63,500 | |||
| Add: Life Membership Fees 400 | 2,64,900 | Investment | 30,000 |
| Advance Salaries | 2,000 | ||
| Furniture 12,000 | |||
| 32,000 | |||
| Less: Sales (3,000) | 29,000 | ||
| Books | 3,000 | ||
| Cash in Hand | 10,900 | ||
| Cash at Bank | 2,68,900 | ||
| 2,68,900 | 2,68,900 | ||
16. Following Receipt and Payment Account was prepared from the cash book of Delhi Charitable Trust for the year ending December 31, 2017:
| Receipt and Payment Account for the year ending December 31, 2017 | |||
| Receipts | Amount(₹) | Payments | Amount(₹) |
| Balance b/d | Charity | 11,500 | |
| Cash in hand | 11,500 | Rent and taxes | 3,200 |
| Cash at bank | 12,600 | Salary | 6,000 |
| Donation | 9,000 | Printing | 600 |
| Subscription | 42,800 | Postage | 300 |
| Legacies | 18,000 | Advertisements | 4,500 |
| Interest on investment | 4,500 | Insurances | 2,000 |
| Sale of old newpapers | 200 | Furniture | 21,600 |
| Investment | 23,000 | ||
| Balance c/d: | |||
| Cash in hand | 9,900 | ||
| Cash in bank | 16,000 | ||
| 98,600 | 98,600 | ||
Prepare Income and expenditure account for the year ended December 31, 2017, and a balance sheet as on that date after the following adjustments:
(a) It was decided to treat one-third of the amount received on account of donation as income.
(b) Insurance premium was paid in advance for three months.
(c) Interest on investment Rs.1,100 accrued was not received.
(d) Rent ₹600: salary ₹900 and advertisement expenses ₹1,000 outstanding as on December 31, 2018.
| Ans. | Books of Delhi Charitable Trust Income and Expenditure Account as on December 31, 2017 | ||
| Expenditure | Amount (₹) | Income | Amount (₹) |
| Insurance 2,000 | By Donation {9,000 × (1/3)} | 3000 | |
| Less: Prepaid {2,000 × (3/15)} (400) | 1,600 | By Interest on Investments 4,500 | |
| Add: Accrued interest 1,100 | 5,600 | ||
| To Charity | 11,500 | ||
| To Rent and Taxes 3,200 | By Subscription | 42,800 | |
| Add : Outstanding 600 | 3,800 | By Sale of Old Newspapers | 200 |
| To Salary 6,000 | |||
| Add: Outstanding 900 | 6,900 | ||
| To Printing | 600 | To Postage | 300 |
| Add: Outstanding 1,000 | 5,500 | ||
| To Surplus (Balancing figure) | 21,400 | ||
| 51,600 | 51,600 | ||
| Balance Sheet as on December 31, 2016 | |||
| Liabilities | Amount(₹) | Assets | Amount(₹) |
| Capital fund (Balancing Figure) | 24,100 | Cash in Hand | 11,500 |
| Cash at Bank | 12,600 | ||
| 24,100 | 24,100 | ||
| Balance Sheet as on December 31, 2017 | |||
| Liabilities | Amount(₹) | Assets | Amount(₹) |
| Capital Fund 24,100 | Prepaid insurance {2,000 × (3/15)} | 400 | |
| Add: Donation {9,000 × (2/3)} 6,000 | Investment 23,000 | ||
| Add: Legacies 18,000 | Add: Accured Interest 1,100 | 24,100 | |
| Add: Surplus 21,400 | 69,500 | Furniture | 21,600 |
| Rent Outstanding | 600 | Cash in Hand | 9,900 |
| Salary Outstanding | 900 | Cash in Bank | 16,000 |
| Advertisement Expenses Outstanding | 1,000 | ||
| 72,000 | 72,000 | ||
17. From the following Receipt and Payment Account of a club, prepare Income and Expenditure Account for the year ended March 31, 2017 and the Balance Sheet as on that date.
| Receipt and Payment Account for the year ending March 31, 2017 | |||
| Receipts | Amount(₹) | Payments | Amount(₹) |
| Balance b/d | 3,500 | General expenses | 900 |
| Subscription: | Salary | 16,000 | |
| 2015-16 2,000 | Postage | 1,300 | |
| 2016-17 70,000 | Electricity charges | 7,800 | |
| 2017-18 3,000 | 75,000 | Furniture | 26,500 |
| Sale of old Books | 2,000 | Books | 13,000 |
| (costing ₹3,200) | Newspapers | 600 | |
| Rent from use of hall | 17,000 | Meeting expenses | 7,200 |
| Sale of newspapers | 400 | T.V. set | 16,000 |
| Profit from entertainment | 7,300 | Balance c/d | 15,900 |
| 1,05,200 | 1,05,200 | ||
Additional Information:
(a) The club has 100 members each paying an annual subscription of ₹900.
Subscriptions outstanding on March 31, 2016 were ₹3,600.
(b) On March 31, 2017, salary outstanding amounted to ₹1,000, Salary paid included ₹1,000 for the year 2016.
(c) On April 1, 2017 the club owned land and building ₹25,000, furniture ₹2,600 and books ₹6,200.
| Ans. | Income and Expenditure Account as on December 31, 2017 | ||
| Expenditure | Amount (₹) | Income | Amount (₹) |
| To General Expenses | 900 | By Subscription 70,000 | |
| To Salary 16,000 | Add: Outstanding for 2017 20,000 | 90,000 | |
| Add: Outstanding for 2017 1,000 | (100 members at ₹900 each) | ||
| 17,000 | By Rent from use of hall | 17,000 | |
| Less: Outstanding for 2016 (1,000) | 16,000 | By Sale of Old News Papers | 400 |
| To Loss on Sale of old Books | 1,200 | By Profit from Entertainment | 7,300 |
| To Electricity Charges | 7,8000 | ||
| To Newspaper | 600 | ||
| To Meeting Expenses | 7,200 | ||
| To Postage | 1,300 | ||
| To Surplus (Balancing figure) | 79,700 | ||
| 1,14,700 | 1,14,700 | ||
| Balance Sheet as on March 31, 2016 | |||
| Liabilities | Amount(₹) | Assets | Amount(₹) |
| Salary Outstanding | 1,000 | Subscription Outstanding | 3,600 |
| Capital Fund (Balancing figure) | 39,900 | Furniture | 2,600 |
| Books | 6,200 | ||
| Cash and Bank | 3,500 | ||
| Building | 25,000 | ||
| 40,900 | 40,900 | ||
| Balance Sheet as on March, 2017 | |||
| Liabilities | Amount(₹) | Assets | Amount(₹) |
| Salary Outstanding | 1,000 | Subscription Outstanding | 3,600 |
| Advance Subscription | 3,000 | Subscription Outstanding | |
| Salary Outstanding | 1,000 | 2017 20,000 | |
| Add: 2016 (Still Outstanding) 1,600 | 21,600 | ||
| Capital Fund 39,900 | Building | 25,000 | |
| Add: Surplus 79,700 | 1,19,600 | Furniture 2,600 | |
| Add: Purchases 26,500 | 29,100 | ||
| Books 6,200 | |||
| Add: Purchases 13,000 | |||
| 19,200 | |||
| Less: Sales 3,200 | 16,000 | ||
| T.V. Set | 16,000 | ||
| Cash and Bank | 15,900 | ||
| 1,23,600 | 1,23,600 | ||
18. Following is the Receipt and Payment Account of Women’s Welfare Club for the year ended December 31, 2017:
| Receipt and Payment Account for the year ending December 31, 2017 | |||
| Receipts | Amount(₹) | Payments | Amount(₹) |
| Balance b/d | 7,250 | Salary | 12,500 |
| Subscription | 81,750 | Stationary | 1,700 |
| Donations | 3,000 | Electricity charges | 9,550 |
| Grant from Government | 15,000 | Insurance | 7,500 |
| Sale of newspapers | 300 | Equipments | 30,000 |
| Proceeds of charity show | 16,500 | Petty expenses | 500 |
| Interest on investments | 7,000 | Expenses on charity show | 12,900 |
| @10% for full year | Newspapers | 1,000 | |
| Sundries income | 400 | Lectures fee | 16,500 |
| Honorarium to Secretary | 12,000 | ||
| Balance c/d | 27,050 | ||
| 1,31,200 | 1,31,200 | ||
| Additional Information: | ||
| 01.01.2017 (₹) | 31.12.2017 (₹) | |
| Outstanding salaries | 1,200 | 1,800 |
| Insurance prepaid | 700 | 300 |
| Subscription outstanding | 3750 | 2500 |
| Subscription received in advanced | 1,750 | 1,000 |
| Electricity charges outstanding | -- | 1,250 |
| Stock of stationary | 2,250 | 700 |
| Equipments | 25,600 | 50,200 |
| Building | 1,20,000 | 1,14,000 |
Prepare Income and Expenditure Account for the year ended December 31, 2017 and Balance Sheet as on date.
| Ans. | Books of Women Welfare Club Income and Expenditure Account as on December 31, 2017 | ||
| Expenditure | Amount (₹) | Income | Amount (₹) |
| To Salary 12,500 | By Subscription 81,750 | ||
| Add: O/s on Dec. 31, 2017 1,800 | Add: O/s on Dec. 31, 2017 2,500 | ||
| 14,300 | 84,250 | ||
| Less: O/s on Dec. 31, 2016 (1,200) | 13,100 | Less: O/s on Dec. 31, 2016 (3,750) | |
| 80,500 | |||
| To Stationary .1,700 | Add: Advance on Dec. 31, 2016 1,750 | ||
| Add: Opening Stock 2,250 | 82,250 | ||
| 3,950 | Less: Advance on Dec. 31, 2017 (1,000) | 81,250 | |
| Less: Closing Stock (700) | 3,250 | ||
| By Donations | 3,000 | ||
| To Electric Charges 9,550 | By Grant from Government | 15,000 | |
| Add: O/s on Dec. 31, 2017 1,250 | 10,800 | By Sale of Newspapers | 300 |
| By Profit from Charity show (16,500 – 12,900) | 3,600 | ||
| To Insurance 7,500 | By Interest on Investments | 7,000 | |
| Add: Prepaid in 2016 700 | By Sundries Income | 400 | |
| 8,200 | |||
| Less: Prepared in 2017 (300) | 7,900 | ||
| To Depreciation on Equipments | 5,400 | ||
| To Petty Expenses | 500 | ||
| To Newspapers | 1,000 | ||
| To Lectures Fee | 16,500 | ||
| To Honorarium to Secretary | 12,000 | ||
| To Depreciation on Building | 6,000 | ||
| To Surplus (Balancing Figure) | 34,100 | ||
| 1,14,700 | 1,14,700 | ||
| Balance Sheet as on December 31, 2016 | |||
| Liabilities | Amount(₹) | Assets | Amount(₹) |
| Outstanding Salaries | 1,200 | Insurance Prepaid | 700 |
| Subscription in Advance | 1,750 | Subscription Outstanding | 3750 |
| Stock of Stationary | 2,250 | ||
| Capital Fund (Balancing Figure) | 2,26,600 | Equipments | 25,600 |
| Building | 1,20,000 | ||
| Cash and Bank | 7,250 | ||
| Investments {7,000 × (100/10)} | 70,000 | ||
| 2,29,550 | 2,29,550 | ||
| Balance Sheet as on March, 2017 | |||
| Liabilities | Amount(₹) | Assets | Amount(₹) |
| Outstanding Salaries | 1,800 | Equipments 25,600 | |
| Subscripton in Advances | 1,000 | Add: Purchases 30,000 | |
| Electricity Charges Outstanding | 1,250 | 55,600 | |
| Capital Fund 2,26,600 | 2,60,700 | ||
| Insurance Prepaid | 300 | ||
| Subscription Outstanding | 2,500 | ||
| Stock of Stationery | 700 | ||
| Building 1,20,000 | |||
| Less: Depreciation (6,000) | 1,14,000 | ||
| Cash and Bank | 27,050 | ||
| Investments | 70,000 | ||
| 2,64,750 | 2,64,750 | ||
19. As at March 31, 2017 the following balances have been extrated from the books of the Indian Chartered Accountants Recreation Club and you are asked to prepare Income and Expenditure Account for the year ended March 31, 2017 and a Balance Sheet as at that date.
| Debit Balances | Amount(₹) | Credit Balances | Amount(₹) |
| Purchases | 24,660 | Subscriptions | 97,110 |
| Dining Room | 32,370 | Billiard’s Receipts | 7,300 |
| Rent | 10,470 | Sundary Receipts | 410 |
| Wages | 18,690 | Interest on Fixed Deposits | 270 |
| Repairs and Renewals | 5,400 | Sundry Creditors | 5370 |
| Fuel and Light | 5,280 | Grant from Institute | 42,000 |
| Misc. Expenses | 4,050 | (permanent) | |
| Cash in hand | 1,730 | Income and Exp. A/c (2016) | 1,380 |
| Cash at bank | 2,760 | ||
| Fixed Deposits | 8,500 | ||
| Sundry Debtors | 2,250 | ||
| Stationary | 600 | ||
| Billiard Table | 2,070 | ||
| Fixtures and Fittings | 870 | ||
| Furniture | 4,140 | ||
| Club Premtses | 30,000 | ||
| 1,53,840 | 1,53,840 |
On March 31,2016 stock of Stationary consisted of ₹900 and March 31, 2017 `60 respectively. Provide depreciations ₹60 on fixtures and fittings, ₹390 on billiard table and `560 on furniture.
| Ans. | Income and Expenditure A/c | ||
| Expenditure | Amount (₹) | Income | Amount (₹) |
| To Purchases | 24660 | By Subscriptions | 97,110 |
| To Dining room | 32,370 | By Billiard’s Receipts | 7,300 |
| To Rent | 10,470 | By Sundary Receipts | 410 |
| To Wages | 18,690 | By Interest on fixed Deposits | 270 |
| To Repairs and Renewals | 5,400 | ||
| To Fuel & Light | 5,280 | ||
| To Misc. Expenses | 4,050 | ||
| To Stationary 600 | (–) Closing stock (60) | 540 | |
| To Depreciation: | |||
| Fixtures 60 | |||
| Billiard Table 390 | |||
| Furniture 560 | 1010 | ||
| To Surplus | 2,620 | ||
| 1,05,090 | 1,05,090 | ||
| Balance Sheet as at 31.3.2017 | |||
| Liabilities | Amount(₹) | Assets | Amount(₹) |
| Capital Fund 1,380 | Cash in Hand | 1,730 | |
| (+) Surplus 2,620 | 4,000 | Cas at Bank | 2,760 |
| Fixed Deposits | 8,500 | ||
| Sundry creditors | 5,370 | Sundary Debtors | 2,250 |
| Grant from institute | 42,000 | Stationary | 60 |
| Billiards Table | 1,680 | ||
| Fixtures fitting | 810 | ||
| Furniture | 3,580 | ||
| Club premises | 30,000 | ||
| 51,370 | 51,370 | ||
Note : Opening stock of stationary is alraedy adjusted in the balance of stationary in Trial Balance.
NCERT Solutions for Class 12 Accountancy Chapter 1 Free PDF Download
Please Click on Free PDF Download link to Download the NCERT Solutions for Class 12 Accounting Chapter 1 Accounting for Not For Profit Organisation
