Financial Statements of NPO - TS Grewal Solution 2020-21

Chapter 1 – Financial Statements of Not-for-Profit Organisation

TS Grewal Solution 2020-21

Receipts and Payments Accounts

Question 1

From the information given below, prepare Receipts and Payments Account of Railway Club for the year ended 31st march, 2020:

	Amount (Rs)		Amount (Rs)
Cash in Hand on 1st April, 2020	4,390	Salaries	21,500
Subscription	37,600	Honorarium to Secretary	2,500
Donations	8,000	Interest Received on Investments	2,950
Entrance Fees	4,300	Printing and Stationery	350
Rent Received for Club Halls	5,250	Petty Cash Expenses	900
Electricity Charges	3,440	Insurance Premium Paid	310
Taxes paid	490

Answer

In the books of Railway Club
Receipts and Payments Account
Dr.	for the year ended 31 Mar 2020		Cr.
Receipts	Amount (Rs)	Payments	Amount (Rs)
To balance b/d	4,390	By Electricity Charges	3,440
To Subscriptions	37,600	By Taxes Paid	490
To Donations	8,000	By Salaries	21,500
To Entrance Fees	4,300	By Honorarium to Secretary	2,500
To Rent Received for Club Halls	5,250	By Printing and Stationery	350
To Interest on Investments	2,950	By Petty Cash Expenses	900
		By Insurance Premium Paid	310
		By balance c/d	33,000
	62,490		61,590

Question 2

Bengal Cricket Club was inaugurated on 1st April, 2019. It had the following Receipts and Payments during the year ended 31st March, 2020:

Receipts: Entrance Fees Rs. 10,000; Subscriptions Rs. 60,000; Donations Rs. 10,000.

Payments: Rent Rs. 15,000; Postages Rs. 1,000; Newspaper and Magazines Rs. 8,000; Investments Rs. 30,000; Stationery Rs. 4,000; Entertainment Expenses Rs. 3,000; Miscellaneous Expenses Rs. 2,000.

Show the Receipts and Payments Account for the year ended 31st March, 2020.

Answer

In the books of Bengal Cricket Club
Receipts and Payments Account
Dr.	for the year ended 31 Mar 2020		Cr.
Receipts	Amount	Payments	Amount
To Entrance Fees	10,000	By Rent	15,000
To Subscriptions	60,000	By Postages	1,000
To Donations	10,000	By Newspaper and Magazines	8,000
		By Investments	30,000
		By Stationery	4,000
		By Entertainment Expenses	3,000
		By Miscellaneous Expenses	2,000
		By balance c/d	17,000
	80,000		80,000

Question 3

The following information were obtained from the books of Delhi Club as on 31st March, 2020 at the end of the fi Rs. t year of the Club, prepare Receipts and Payment Account for the year ending 31st March, 2020:

Receipts	Amount (Rs)	Payments	Amount (Rs)
Donation for Building and Library	2,00,000	Purchase of Land	10,000
Entrance Fees	17,000	Purchase of Furniture	1,30,000
Subscription	19,000	Salaries	4,800
Locker Rent	1,660	Maintenance of Play Grounds	1,000
Refreshment Receipts	16,000	Rent	8,000
Government Grant	25,000	Refreshment Payments	8,000
		Library Books	25,000
		Purchase of 90% Government Bonds	1,60,000
		Term Deposit with Bank	15,000

Answer

In the books of Delhi Club
Receipts and Payments Account
Dr.	for the year ended 31 Mar 2020		Cr.
Receipts	Amount (Rs)	Payments	Amount (Rs)
To Donation for Building and Library	2,00,000	By Purchase of Land	10,000
To Entrance Fees	17,000	By Purchase of Furniture	1,30,000
To Subscription	19,000	By Salaries	4,800
To Locker Rent	1,660	By Maintenance of Play Grounds	1,000
To Refreshment Receipts	16,000	By Rent	8,000
To Government Grant	25,000	By Refreshment Payments	8,000
To balance c/d	83,140	By Library Books	25,000
		By Purchase of 9% Government Bonds	1,60,000
		By Term Deposit with Bank	15,000
	3,61,800		3,61,800

Question 4

From the following information, prepare Receipts and Payments Account of Long-town Sports Club for the year ending 31st March, 2020:

Particulars	Amount (Rs)	Particulars	Amount (Rs)
Opening Balance:		Charity Given	10,000
Cash in Hand	50,000	Match Expenses	30,000
Cash at bank	60,000	Salaries	63,600
Subscription Received:		Honorarium	4,000
2019-20	4,000	12% Investment Purchased	60,000
2020-21	1,40,000	Entrance Fees	4,000
2021-22	8,000	Interest on 12% Investments	6,000
Furniture Purchased	70,000	Closing Balance:
General Donations	20,000	Cash in Hand	24,000
Donations for Tournament	40,000	Cash at Bank	?

Answer

0In the books of Long-town Sports Club
Receipts and Payments Account
Dr.	for the year ended 31 Mar 2020		Cr.
Receipts	Amount (Rs)	Payments	Amount (Rs)
To Opening Balance:		By Charity Given	10,000
Cash in Hand	50,000	By Match Expenses	30,000
Cash at Bank	60,000	By Salaries	63,600
To Subscriptions Received:		By Honorarium	4,000
2018-19	4,000	By 12% Investment Purchased	60,000
2019-20	1,40,000	By Furniture Purchased	70,000
2020-21	8,000	By Closing Balance
To Entrance Fees	4,000	Cash in Hand	24,000
To General Donations	20,000	Cash at Bank (WN) (Balancing Fig.)	70,400
To Donations for Tournament	40,000
To Interest on 12% Investments	6,000
	3,32,000		3,32,000

Working Notes:

Calculation of Closing Cash at Bank

Total Receipts =                         Rs. 3,32,000
(-) Total Payments =                Rs. 2,37,600
(-) Cash in Hand =                        Rs. 24,000

Cash in Bank= RS. 70,400

Question 5

From the following particulars of Evergreen Club, prepare Receipts and Payments Account for the Year ended 31^st March, 2020.

	Amount (Rs)		Amount (Rs)
Cash at Bank on 1st April, 2019	50,000	Newspapers and Magazines	87,000
Cash at Bank on 1st April, 2019	3,40,000	Sale of Old Newspapers	12,000
Subscription Received	15,70,000	Book Purchased	3,40,000
Donation Received	2,80,000	Sports Materials Purchased	4,70,000
Investment Purchased	5,00,000	Interest on Investments Received	50,000
Rent Paid	50,000	Honorarium to Coaches	1,50,000
General Expenses	2,30,000	Cash in Hand on 31st March, 2020	30,000
Postage and Stationary	25,000	Cash at Bank on 31st March, 2020	?

Answer

In the books of Ever Green Club
Receipts and Payments Account
Dr.	for the year ended 31 Mar 2020		Cr.
Receipts	Amount (Rs)	Payments	Amount (Rs)
To Opening Balance:		By Investment Purchased	5,00,000
Cash at Bank on 1st April, 2019	50,000	By Rent Paid	50,000
Cash at Bank on 1st April, 2019	3,40,000	BY General Expenses	2,30,000
To Subscriptions Received	15,70,000	By Postage and Stationary	25,000
To Donations Received	2,80,000	By Newspapers and Magazines	87,000
To Sale of Old Newspapers	12,000	By Book Purchased	3,40,000
To Interest on Investments	50,000	By Sports Materials Purchased	4,70,000
		By Honorarium to Coaches	1,50,000
		Closing Balance
		Cash in Hand on 31st March, 2020	30,000
		Cash in Hand on 31st March, 2020	4,20,000
	23,02,000	(Balancing Figure)	23,02,000

Question 6

Following is the summary of cash transactions of Good Health Club for the year ending 31st March,2018

Particulars	Amount (Rs)
Opening Balance:
Cash	70,000
Bank	3,00,000
Subscriptions Received:
2016-2017	1 40,000
2017-2018	3,75,000
2018-2019	20,000
Donations for Gym	1 ,64,000
Admission Fees	14,000
Life Membership Fee	45,000
Wages and Salaries	55,000
Locker Rent	1 1,000
Invested in 9% Debentures of X YZ Ltd.	2,40,000
Health Journals	5,000
Stationery	1 2,500
Insurance Premium	6,760
Courier Charges	800
Municipal Taxes	9,570
Machinery Purchased	38,000
Sale of Old Newspapers	300
Interest on Bank Balance	1 ,740
Cash in Hand	43,000

From the above summary prepare a Receipts and Payments Account of Good Health Club for the year ending 31st March, 2018.

Answer

In the books of Good Health Club
Receipts and Payments Account
Dr.	for the year ended 31 Mar 2018		Cr.
Receipts	Amount (Rs)	Payments	Amount (Rs)
To Balance B/d		By Wages and Salaries	55,000
Cash	70,000	By 9% Debentures	2,40,000
Bank	3,00,000	By Health Journals	5,000
To Subscriptions Received:		By Stationery	12,500
2016-2017	40,000	By Insurance Premium	6,750
2017-2018	3,75,000	By Courier Charges	800
2018-2019	20,000	By Municipal Taxes	9,570
To Donations for Gym	1,64,000	By Machinery Purchased	38,000
To Admission Fees	14,000	By Balance c/d
To Life Membership Fee	45,000	Cash	43,000
To Locker Rent	11,000	Bank (Balancing figure)	6,30,410
To Sale of news paper	300
To Interest on Bank Balance	1,740
	10,41,040		10,41,030

Funds Based Accounts

Question 7

State how will be the prizes awarded of RS. 5,000 shown while preparing the final accounts of a club for the year ending on 31st March, 2020.

Answer

Prizes awarded of RS. 5,000 will be shown in the expenditure side of the income and expenditure account.

Expenditure	Amount (Rs)	Income	Amount (Rs)
To Prizes Awarded	5000

Question 8

How are the following items presented in financial statements of a Not-for-Profit organisation?

(a) Tournament Fund 80,000;

(b) Tournament Expenses 14,000. (CBSE Sample Paper 2019)

Answer

Extract of Balance sheet
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Tournament fund 80,000
Less ; Tournament Expenses 14,000	66,000

Question 9

How are the following items shown in the accounts of a Not-for-Profit Organisation?

	Rs.
Tournament Fund	50,000
Tournament Expenses	15,000
Receipts from Tournament	20,000

Answer

Extract of Balance sheet
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Tournament Fund 50,000
Add; Receipt from Sale of tickets 20,000
Less ; Tournament Expenses (15,000)	55,000

Question 10

How are the following dealt with in the accounts of a Not-for-Profit Organisation?

Case I	Dr. (Rs)	Cr. (Rs)	Case II	Dr. (Rs)	Cr. (Rs)
Prize Fund		50,000	Match Fund	-	1,00,000
Prizes Paid	12,000		Match Expenses	35,000	-
Match Expenses	15,000		Investments of Match Fund	60,000	-
			Interest on Match Fund Investments	-	3,000
			Prizes awarded	19,000

Answer

Case I

Extract of Balance sheet
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Prize Fund 50,000
Less ; Prize Expenses (12,000)	38,000

Income & Expenditure Account
Dr.			Cr.
Expenditure	Amount (Rs.)	Income	Amount (Rs.)
To Match Expenses	15,000

Case II

Extract of Balance sheet
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Match Fund 1,00,000		Match Fund Investment	68,000
Add; Interest on Match Fund Investment 3,000
Less ; Match Expenses (35,000)	68,000

Income & Expenditure Account
Dr.			Cr.
Expenditure	Amount (Rs.)	Income	Amount (Rs.)
To Prizes Awarded	19,000

Question 11

How the following items for the year ended 31st March, 2019 will be presented in the financial statements of Aisko Club?

Particulars	Dr. (Rs)	Cr. (Rs)
Tournament Fund	-	1,50,000
Tournament Fund Investments	1,50,000	-
Income from Tournament Fund Investments	-	18,000
Tournament Expenses	12,000

Additional Information:

Interest Accrued on Tournament Fund Investments RS. 6,000.

Answer

Extract of Balance sheet
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Tournament Fund 1,50,000		Tournament Fund Investment	1,50,000
Add; Income from Tournament Fund Investment 18,000		Accrued Interest on Investment Fund Investment	6,000
Add; Accrued Interest on Investment Fund Investment 60,000
Less ; Tournament Expenses 12,000	1,62,000

Question 12

How will be the following items dealt while preparing the final accounts of a club for the year ending 31^st March, 2020?

Particulars	Amount (Rs)
Prize Fund	1,00,000
10% Prize Fund Investment on 1st April, 2019	1,00,000
Donation for Prize Fund received during the year	15,000
Prize Awarded during the year	17,500
Interest Received on 10% prize Fund Investment	4,500

Answer

Extract of Balance sheet for the year ended March 31, 2020
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Prize Fund 1,00,000		10% Prize Fund Investment	1,00,000
Add; New Donation 15,000		Accrued Interest on Investment	5,500
Add; Interest Received 10,000
Less; Prize Awarded 17,500	1,07,500

Question 13

How are the following dealt with while preparing the final accounts of a club?

TRIAL BALANCE
as at 31st March, 2020
Particulars	Dr. (Rs)	Cr. (Rs)
Match Fund	-	80,000
Match Fund Investments	72,000	-
Match Fund Bank Balance	3500	-
Interest on Match Fund Investments	-	2,880
Match Expenses	5,500	-

Answer

Extract of Balance sheet
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Match Fund 80,000		Match Fund Investment	72,000
Add; Interest on Match Funds Inv. 2,880		Match Fund Bank Balance	3,500
Less ; Match Expenses 5,500	77,380

Question 14

From the following information of a club show the amounts of match expenses and match fund in the appropriate Financial Statements of the club for the year ended on 31st March, 2020:

Particulars	Amount (Rs)
Match expenses paid during the year ended 31st March, 2020	1,02,000
Match Fund as on 31st March, 2019	24,000
Donation for Match Fund (Received during the year ended 31st March, 2020)	40,000
Proceeds from the sale of match tickets (Received during the year ended 31st March, 2020)	15,000

Answer

Extract of Balance sheet
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Match Fund 24,000
Add; Donation for Match Fund 40,000
Add; Proceed from Sale of Tickets 15,000
Less ; Match Expenses 1,02,000	Nil
Excess amount of Match Expenses (Rs. 23,000) will be debited to Income and Expenditure Account


Income & Expenditure Account
Dr.			Cr.
Expenditure	Amount (Rs.)	Income	Amount (Rs.)
To Match Expenses	23,000

Question 15

Show how are the following items dealt with while preparing the final accounts for the year ended 31st March, 2020 of a Not-for-profit Organisation:

Case I

Expenditure on construction of Pavilion is Rs. 6,00,000. The construction work is in progress and has not yet completed. Capital Fund as at 31st March, 2019 is Rs. 20,00,000.

Case II

Expenditure on construction of Pavilion is Rs. 6,00,000. The construction work is in progress and has not yet completed. Pavilion Fund as at 31st March, 2019 is Rs. 10,00,000 and Capital Fund as at 31st March, 2019 is Rs. 20,00,000.

Case III

Expenditure on construction of Pavilion is Rs. 6,00,000. The construction work is in progress and has not yet completed. Pavilion Fund as at 31st March, 2019 is Rs. 10,00,000, and Capital Fund as at 31st March, 2019 is Rs. 20,00,000. Donation Received for Pavilion on 1st January, 2020 is RS. 5,00,000.

Answer

Case I

Extract of Balance sheet as on March 31, 2020
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Capital Fund	20,00,000	Pavilion Work-in-Progress	6,00,000

Case II

Extract of Balance sheet as on March 31, 2020
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Pavilion Fund 10,00,000		Pavilion Work-in-Progress	6,00,000
Less: Expenditure on Construction of Pavilion 6,00,000	4,00,000
Capital Fund 20,00,000
Add: Pavilion Work-in-Progress 6,00,000	26,00,000

Case III

Extract of Balance sheet as on March 31, 2020
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Pavilion Fund 10,00,000		Pavilion Work-in-Progress	6,00,000
Add: Donation 5,00,000
Less: Expenditure on Construction of Pavilion 6,00,000	9,00,000
Capital Fund 20,00,000
Add: Pavilion Work-in-Progress 6,00,000	26,00,000

Calculation of Amount of Subscription

Question 16

During the year ended 31st March, 2020, subscriptions received by the Jaipur Literary Society were Rs. 4,20,000. These subscriptions include Rs. 14,000 received for the year ended 31st mar, 2019. On 31st march, 2020, subscriptions due but not received were Rs. 10,000. What amount should be credited to Income and Expenditure Account for the Year ended 3st march, 2020 as subscription?

Answer

Statement of Subscriptions for the year ended March 31, 2020
Particulars	Amount (Rs)
Subscriptions received during the year ended 31st March, 2020	4,20,000
Add: Outstanding Subscriptions for the year ended 31st March, 2020	10,000
Less: Subscriptions received for the year ended 31st March, 2019	(14,000)
Subscriptions to be credited to Income and Expenditure Account	4,16,000

Question 17

Subscriptions received during the year ended 31^st March, 2020 are

	Rs.
For the year ended 31st March, 2019	1,600
For the year ended 31st March, 2020	84,400
For the year ended 31st March, 2021	3,200

There are 450 members, each paying an annual subscription of Rs. 200; Rs. 1,800 were in arrears the year ended 31st March, 2019.

Calculate amount of subscriptions to be credited to Income and Expenditure Account for the year ended 31st March, 2020.

Answer

Statement of Subscriptions for the year ended March 31, 2020
Particulars	Amount (Rs)
Subscriptions received during the year ended 31st March, 2020	84,400
Add: Outstanding Subscriptions for the year ended 31st March, 2020	5,500
Subscriptions to be credited to Income and Expenditure Account	89,900

Question 18

During year ended 31st March, 2020, subscriptions received by Kings Club, Delhi were Rs. 4,09,000 including Rs. 5,000 for the year ended 31st March, 2019 and Rs 10,000 year ended 31st March, 2021. At the end of the year ended 31st March, 2020, subscriptions outstanding for the year ended 31st March, 2020 were Rs. 15,000. The subscriptions due but not received at the end of the previous year i.e., 31st March, 2019 were Rs. 8,000, while subscriptions received in advance on the same data were Rs. 18,000.

Calculate amount of subscriptions to be credited to Income and Expenditure Account for the year ended 31st March, 2020.

Answer

Statement of Subscriptions for the year ended March 31, 2020
Particulars	Amount (Rs)
Subscriptions received during the year ended 31st March, 2020	4,09,000
Add: Outstanding Subscriptions for the year ended 31st March, 2020	15,000
Add: Subscriptions received in advance for the year ended 31st March, 2019	18,000
Less: Subscriptions received for the year ended 31st March, 2019	(5,000)
Less: Subscriptions received for the year ended 31st March, 2021	(10,000)
Subscriptions to be credited to Income and Expenditure Account	4,27,000

Question 19

From the following information, calculate amount of subscriptions, to be credited to the Income and Expenditure Account for the year ended 31st March, 2020.

		Amount (Rs)
1st April, 2019	Subscriptions in Arrears	50,000
	Subscriptions Received in Advance	30,000
31st March, 2020	Subscriptions in Arrears	25,000
	Subscriptions Received in Advance	70,000

Subscriptions received during the year ended 31st March, 2020 – Rs. 3,00,000

Subscription still in arrears for the year 2018-19 – Rs. 10,000

Answer

Statement of Subscriptions for the year ended March 31, 2020
Particulars	Amount (Rs)
Subscriptions received during the year ended 31st March, 2020	3,00,000
Add: Outstanding Subscriptions on 31st March, 2020	25,000
Add; Subscriptions Received in advance on 1st April, 2019	30,000
Less; Outstanding Subscriptions on 1st April, 2019	(50,000)
Less: Subscriptions Received in advance on 31st March, 2020	(70,000)
Subscriptions to be credited to Income and Expenditure Account	2,35,000

Question 20

From the following Particulars, calculate amount of subscriptions to be credited to the Income and Expenditure Account for the year ended 31st March, 2020:

		Amount (Rs)
(a)	Subscriptions in arrear on 31st March, 2019	500
(b)	Subscriptions received in advance on 31st March, 2019 for the year ended on 31st March, 2020	1,100
(c)	Total Subscriptions received during the year ended 31st March, 2020 (including Rs. 400 for the year ended 31st March, 2019, Rs. 1,200 for the year ended 31st March, 2021 and Rs. 300 for the year ended 31st March, 2022)	35,400
(d)	Subscriptions outstanding for year ended 31st March, 2020	400

Answer

Statement of Subscriptions for the year ended March 31, 2020
Particulars	Amount (Rs)
Subscriptions received during 2019-20	35,400
Less: Subscriptions-in-arrears received for 2018-19	(400)
Less: Subscriptions received-in-advance for 2020-21	(1,200)
Less: Subscriptions received-in-advance for 2020-22	(300)
Add: Subscriptions Outstanding for 2019-20	400
Add: Subscriptions received in 2018-19 for 2019-20	1,100
Subscriptions to be credited to Income and Expenditure Account	35,000

Question 21

How are the following items of subscriptions shown in the Income and Expenditure Account for the year ended 31st March, 2020 and Balance Sheets as at 31st March, 2019 and 2020?

	Amount (Rs)
Subscriptions received during the year ended 31st March, 2020	3,58,500
Subscriptions outstanding on 31st March, 2019	30,000
Subscriptions received in Advance on 31st March,2019	22,500
Subscriptions received in Advance on 31st March, 2020	13,500
Subscriptions outstanding on 31st March, 2020	37,500
(including Rs. 12,500 for the year ended 31st March, 2019)

Answer

Income & Expenditure Account for the year ended March 31, 2020
Dr.			Cr.
Expenditure	Amount (Rs.)	Income	Amount (Rs.)
		Subscriptions 3,58,500
		Add: Outstanding at the end 37,500
		Add: Advance in the beginning 22,500
		Less: Outstanding in the beginning 30,000
		Less: Advance at the end 13,500	3,75,000

Extract of Balance sheet as on March 31, 2019
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Subscription Received in Advance	22,500	Subscriptions Outstanding	30,000

Extract of Balance sheet as on March 31, 2020
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Subscription Received in Advance	13,500	Subscriptions Outstanding	37,500
		(12,500 +25,000)

Question 22

From the following information, calculate amount of subscriptions outstanding for the year ended 31st March, 2020.

A club has 200 members each paying an annual subscription of Rs. 1,000. The Receipts and Payments Account for the year showed a sum of Rs. 2,05,000 received as subscriptions. The following additional information is provided:

	Amount (Rs)
Subscriptions Outstanding on 31st March, 2019	30,000
Subscriptions received in advance on 31st March, 2020	40,000
Subscriptions received in advance on 31st March, 2019	14,000

Answer

Calculation for Subscriptions Outstanding for the year ended March 31, 2020
Particulars	Amount (Rs)
Subscriptions received during the year ended 31st March, 2020	2,05,000
Add; Subscriptions received in advance on 31st March, 2019	14,000
Less; Subscriptions received in advance on 31st March, 2020	(40,000)
Less: Subscriptions Outstanding on 31st March, 2019	(30,000)
Subscriptions the year ended 31st March, 2020	1,49,000
Subscriptions to be credited to Income and Expenditure Account	2,00,000
Outstanding Subscriptions on 31st March, 2020	51,000

Question 23

From the following information, prepare Subscription Account for the year ending 31st March, 2021:

Particulars	31st March,2019	31st March,2020
	Amount (Rs)	Amount (Rs)
Subscription in Arrears	20,000	18,000
Subscription in Advance	13,000	11,000

In the year ending 31st March, 2020, subscription received were Rs. 2,10,000 (including Rs. 6,000 of arrears from previous year) and subscription arrears of previous year were written off Rs. 4,000.

Answer

Dr.	Subscriptions Account				Cr.
Date	Particulars	Amount (Rs)	Date	Particulars	Amount (Rs)
2019			2019
Apr-01	To Outstanding Subscriptions A/c	20,000	Apr-01	By Subscriptions Received in Advance A/c	13,000
2020			2020
Mar-31	To Subscriptions Received in Advance A/c	11,000	Mar-31	By Subscriptions written off	4,000
Mar-31	To Income & Expenditure A/c (Bal. Fig.)	2,14,000	Mar-31	By Bank A/c	2,10,000
			Mar-31	By Outstanding Subscriptions A/c	18,000
		2,45,000			2,45,000

Question 24

Calculate amount of subscriptions which will be treated as income for the year ended 31st March, 2020 for each of the following cases:

	Particulars	Amount (Rs)
Case I	(i) Subscriptions collected during the year ended 31st March, 2020	2,50,000
	(ii) Subscriptions in arrears for the year ended 31st March, 20200	6,000
	(iii) Subscriptions received in advance for the year ended 31st March, 2021	5,000
Case II	(i) Subscriptions collected during the year ended 31st March, 2020	49,000
	(ii) Subscriptions for the year ended 31st March, 2021 collected in the year ended 31st March, 2019	3,000
	(iii) Subscriptions unpaid for the year ended 31st March, 2020	2,000
Case III	(i) Subscriptions received during the year ended 31st March, 2020	25,000
	(ii) Subscriptions outstanding in the beginning of the year ended 31st March, 2020	3,000
	(iii) Subscriptions not yet collected for the year ended 31st March, 2020	5,000
Case IV	(i) Subscriptions received during the year ended 31st March, 2020	80,000
	(ii) Subscriptions outstanding in the beginning of the year ended 31st March, 2020	5,000
	(iii) Subscriptions not yet collected for the year ended 31st March, 2020	8,000
	(iv) Subscriptions received in advance for the year ended 31st March, 2021	2,000
Case V	(i) Subscriptions received during the year ended 31st March, 2020	90,000
	(ii) Subscriptions outstanding at the end of the year ended 31st March, 2019	5,000
	(iii) Subscriptions received in advance on 31st March, 2019	3,000
	(iv) Subscriptions received in advance on 31st March, 2020	4,000
	(v) Subscriptions not yet collected for the year ended 31st March, 2020	6,000

Answer

Key for Calculation Subscriptions
Subscriptions Received during the year
( + ) Outstanding for Current Year	Closing
( + ) Received in advance for Previous year	Opening
( - ) Outstanding for Previous Year	Opening
( - ) Received in advance for Next year	Closing

Case I

Particulars	Amount (Rs)
Subscriptions collected during the year ended 31st March, 2020	2,50,000
Add; Subscriptions in arrears for the year ended 31st March, 2020	6,000
Less; Subscriptions received in advance for the year ended 31st March, 2021	(5,000)
Subscriptions Income for the year ended 31st March, 2020	2,51,000

Case II

Particulars	Amount (Rs)
Subscriptions collected during the year 2019-20	49,000
Add: Subscriptions Collected for 2020-21 in 2018-19	3,000
Add: Outstanding Subscriptions for the year 2019-20	2,000
Subscriptions Income for the year ended 31st March, 2020	54,000

Case III

Particulars	Amount (Rs)
Subscriptions collected during the year 2019-20	49,000
Add: Subscriptions Collected for 2020-21 in 2018-19	3,000
Add: Outstanding Subscriptions for the year 2019-20	2,000
Subscriptions Income for the year ended 31st March, 2020	54,000

Case IV

Particulars	Amount (Rs)
Subscriptions received during the year 2019-20	80,000
Add: Subscriptions yet not collected for 2019-20	8,000
Less: Subscriptions outstanding in the beginning of 2019-20	(5,000)
Less: Subscriptions for 2020-21 received in advance	(2,000)
Subscriptions Income for the year ended 31st March, 2020	81,000

Case V

Particulars	Amount (Rs)
Subscriptions received during the year 2019-20	90,000
Add: Subscriptions received in advance on Mar. 31, 2019	3,000
Add: Subscriptions not yet collected for 2019-20	6,000
Less: Subscriptions outstanding at the end of 2018-19	(5,000)
Less: Subscriptions received in advance on Mar. 31, 2020	(4,000)
Subscriptions Income for the year ended 31st March, 2020	90,000

Calculation of Amount of Consumable Items

Question 25

On the basis of information given below, calculate the amount of medicines to be debited to the Income and Expenditure Account of Good Health Hospital for the year ended 31st March, 2020:

Particulars	31st March,2019	31st March,2020
	Amount (Rs)	Amount (Rs)
Stock of Medicines	1,75,750	1,44,650
Creditors for Medicines	15,06,900	18,20,700

Medicines purchased during the year ended 31st March, 2020 were Rs. 60,80,700.

Answer

Statement of Medicine Consumed during the year ended 31st March, 2020
Particulars	Amount (Rs)
Medicine Purchased during the year 2019-20	60,80,700
Add: Stock in the beginning (as on April 01, 2019)	1,75,750
Less: Stock at the end (as on March 31, 2020)	(1,44,650)
Medicine to be debited to Income and Expenditure Account	61,11,800

Question 26

Calculate amount of medicines consumed during the during the year ended 31st March, 2020:

	Amount (Rs)
Opening Stock of Medicines	1,00,000
Opening Creditors for Medicines	90,000
Cash Purchases of Medicines during the Year	3,00,000
Closing Stock of Medicines	1,50,000
Closing Creditors for Medicines	1,30,000

Answer

	Particulars	Amount (Rs)
	Opening Stock of Medicines	1,00,000
Add;	Closing Creditors for Medicines	1,30,000
	Cash purchases of Medicines during the year	3,00,000
Less:	Closing Stock of Medicines	(1,50,000)
	Opening Creditors for Medicines	(90,000)
	Material Consumed	2,90,000

Question 27

Calculate amount to be posted to the Income and Expenditure Account for the year ended 31st March, 2020:

(i) Amount paid for stationery during the year ended 31st March, 2020- Rs. 5,400; Stock of Stationery in Hand on 31st March, 2020- Rs. 250.

(ii) Stock of Stationery in Hand on 1st April, 2019- Rs. 1,500; Payment made for Stationery during the year ended 31st March, 2020- Rs. 5,400; Stock of Stationery in Hand on 31st March, 2020- Rs. 250.

(iii) Stock of Stationery on 1st April, 2019 Rs. 1,500

Creditors for Stationery on 1st April, 2019 Rs. 1,000

Amount paid for Stationery during the year Rs. 5,400

Stock of Stationery on 31st March, 2020 Rs. 250

Answer

(i)	Particulars	Amount (Rs)
	Amount paid for stationery during the year	5,400
	Less: Stock of Stationery in Hand on 31st March, 2020	(250)
	Amount to be posted to the Income and Expenditure Account	5,150

(ii)	Particulars	Amount (Rs)
	Stock of Stationery in Hand on 1st April, 2019	1,500
	Add: Payment made for Stationery during the year ended 31st March, 2020	5,400
	Less: Stock of Stationery in Hand on 31st March, 2020	(2,500)
	Amount to be posted to the Income and Expenditure Account	4,400

(iii)	Particulars	Amount (Rs)
	Stock of Stationery on 1st April, 2019	1,500
	Add: Amount paid for Stationery during the year	5,400
	Less: Creditors for Stationery on 1st April, 2019	(1,000)
	Stock of Stationery on 31st March, 2020	(250)
	Amount to be posted to the Income and Expenditure Account	5,650

Question 28

On the basis of the following information, calculate amount that will appear against the items “Stationary Used” in the Income and expenditure Account for the year ended 31st March, 2020.

	Amount (Rs)
Stock of Stationary as at 1st April, 2019	12,000
Creditors for Stationary as at 1st April, 2019	25,600
Amount paid for Stationary during the year ended 31st March, 2020	1,40,000
Stock of Stationary as on31st March, 2020	23,200
Creditors for Stationary as on 31st March, 2020	24,000

Answer

	Particulars	Amount (Rs)
	Amount paid for Stationary during the year ended 31st March, 2020	1,40,000
Add;	Opening Stock of Stationary	12,000
	Closing Creditors for Stationary	24,000
Less:	Closing Stock of Medicines	(23,200)
	Opening Creditors for Stationary	(25,600)
	Material Consumed	1,27,200

Question 29

Calculate the amount of sports material to be transferred to income and Expenditure Account of Raman Bhalla Sports Club, Ludhiana, for the year ended 31st March, 2019:

	Particulars	Amount (Rs)
(i)	Sports material sold during the year (Book Value Rs. 50,000)	56,000
(ii)	Amount paid to Creditors for sports materials	91,000
(iii)	Cash purchase of sports material	40,000
(iv)	Sports material as on 31st March, 2018	50,000
(v)	Sports material as on 31st March, 2019	55,000
(vi)	Creditors for sports material as on 31st March, 2018	37,000
(vii)	Creditors for sports material as on 31st March, 2019	45,000

Answer

Calculation of Amount of Sports Material Consumed to be debited to Income & Expenditure A/c

	Particulars	Amount (Rs)
	Amount Paid to the Creditors of Sports Materials	91,000
Add;	Cash purchase of Sports Material	40,000
	Opening Stock of Sports Material as on 31st March, 2018	50,000
	Creditors of the sports material as on 31st March, 2019	45,000
Less;	Sports Material sold during the year	(50,000)
	Closing Stock of Sports Material as on 31st March, 2019	(55,000)
	Creditors of the sports material as on 31st March, 2018	(37,000)
	Sports Material consumed during the year to be debited to Income & Expenditure A/c	84,000

Question 30

Calculate the amount that will be posted to the income and Expenditure Account for the year ended 31st March, 2020:

	Amount (Rs)
Stock of Stationery on 1st April, 2019	30,000
Creditors for Stationery on 1st April, 2019	20,000
Advances paid for Stationery carried forward from the year ended 31st March, 2019	2,000
Amount paid for Stationery during the year ended 31st March, 2020	1,08,000
Stock of Stationery on 31st March, 2020	5,000
Creditors for Stationery on 31st March, 2020	13,000
Advance paid for Stationery on 31st March, 2019	3,000

Answer

	Particulars	Amount (Rs)
	Amount paid for Stationery during the year ended 31st March, 2020	1,08,000
Add;	Stock of Stationery on 1st April, 2019	30,000
	Creditors for Stationery on 31st March, 2020	13,000
	Advances paid for Stationery c/ from the year ended 31st March, 2019	2,000
Less:	Stock of Stationery on 31st March, 2020	(5,000)
	Creditors for Stationery on 1st April, 2019	(20,000)
	Advance paid for Stationery on 31st March, 2020	(3,000)
	Amount to be debited to Income and Expenditure Account	1,25,000

Question 31

How are the following dealt with while preparing the final accounts for the year ended 31st March, 2020?

RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31 Mar 2020
Dr.			Cr.
Expenditure	Amount (Rs.)	Income	Amount (Rs.)
		By Payments for Sports Materials	1,40,000

How are the following dealt with while preparing the final accounts for the year ended 31st March, 2021?

BALANCE SHEET (AN EXTRACT) as on 1st April, 2019
Liabilities	Amount (Rs.)	Assets	Amount (Rs.)
Creditors for Sports Materials	6,000	Sports Materials	8,000

Additional Information:

Sports Material in Hand on 31st March, 2020 – Rs. 22,000

Answer

Extract of Income & Expenditure Account for the year ended March 31, 2020
Dr.			Cr.
Expenditure	Amount (Rs.)	Income	Amount (Rs.)
To Sports Materials Used	1,20,000

Extract of Balance sheet for the year ended March 31, 2020
Liabilities	Amount (Rs)	Assets	Amount (Rs)
		Stock of Sports Materials	22,000

Purchase of Sports Material = Stock Material Consumed + Closing Stock – Opening Stock

Purchase of Sports Material = 1,20,000 + 22,000 - 8,000 = Rs. 1,34,000

Working Notes

Sports Materials Used Chargeable to Income and Expenditure Account
for the year ended March 31, 2020
Particulars	Amount (Rs)
Payment for Medicines during the year	1,40,000
Add: Stock of Medicines as on 1st April, 2019	8,000
Less: Stock of Sports Medicines as on March 31, 2020	(22,000)
Less: Creditors for Sport Material for the year 2019	(6,000)
Salaries chargeable to Income and Expenditure Account	1,20,000

Question 32

How are the following dealt with while preparing the final accounts for the year ended 31st March, 2021?

Receipts and Payments Account for the year ended 31 Mar 2020
Dr.			Cr.
Expenditure	Amount (Rs.)	Income	Amount (Rs.)
		By Payments for Medicines	1,50,000

Additional information:

	31st March,2020	31st March,2021
	Amount (Rs)	Amount (Rs)
Stock of Medicines	50,000	75,000
Creditors for Medicines	40,000	60,000

Answer

Extract of Income & Expenditure Account for the year ended March 31, 2020
Dr.			Cr.
Expenditure	Amount (Rs.)	Income	Amount (Rs.)
To Medicines Expenses	1,45,000

Extract of Balance sheet for the year ended March 31, 2019
.	Amount (Rs)	Assets	Amount (Rs)
Creditor for Medicines	40,000	Stock of Medicines	50,000

Extract of Balance sheet for the year ended March 31, 2020
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Creditor for Medicines	60,000	Stock of Medicines	75,000

Working Notes

Medicines Expenses Chargeable to Income and Expenditure Account
for the year ended March 31, 2020
Particulars	Amount (Rs)
Payment for Medicines during the year	1,50,000
Add: Stock of Medicines as on March 31, 2019	50,000
Add: Creditors for Medicines for the year 2020	60,000
Less: Stock of Sports Medicines as on March 31, 2020	(75,000)
Less: Creditors for Sport Material for the year 2020	(40,000)
Salaries chargeable to Income and Expenditure Account	1,45,000

Question 33

How are the following dealt with while preparing the final accounts of a sports club for the year ended 31st March, 2020?

Receipts and Payments Account for the year ended 31 Mar 2020
Dr.			Cr.
Expenditure	Amount (Rs.)	Income	Amount (Rs.)
To Sale of Sports Materials	26,000	By Creditors for Sports Materials	61,000
(Book value Rs. 20,000)		By Cash purchase of Sports Materials	10,000

Additional information:

	31st March,2019	31st March,2020
	Amount (Rs)	Amount (Rs)
Sports Materials	20,000	25,000
Creditors for Sports Materials	7,000	15,000

Answer

Extract of Income & Expenditure Account for the year ended March 31, 2020
Dr.			Cr.
Expenditure	Amount (Rs	Income	Amount (Rs
To Sports Materials Expenses	54,000	BY Profit on Sales of Sport Materials	6,000
		(Rs. 26,000 – Rs. 20,000)

Extract of Balance sheet for the year ended March 31, 2019
.	Amount (Rs)	Assets	Amount (Rs)
Creditors for Sports Materials	7,000	Stock of Sports Materials	20,000

Extract of Balance sheet for the year ended March 31, 2020
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Creditors for Sports Materials	15,000	Stock of Sports Materials	25,000

Working Notes

Sport Items Chargeable to Income and Expenditure Account
for the year ended March 31, 2020
Particulars	Amount (Rs)
Payment for Sport material during the year	61,000
Add; Cash Purchase of Sport Materials	10,000
Add: Stock of Sports Material as on March 31, 2019	20,000
Add: Creditors for Sport Material for the year 2020	15,000
Less; Book value of Sport Materials sold in 2019	(20,000)
Less: Stock of Sports Material as on March 31, 2020	(25,000)
Less: Creditors for Sport Material for the year 2020	(7,000)
Salaries chargeable to Income and Expenditure Account	54,000

Question 34

From the following information of a Not-for-Profit Organisation, show the 'Sports Materials' item in the Income and Expenditure Account for the year ended 31st March, 2020 and Balance Sheets as at 31st March, 2019 and 31st March, 2020:

Particulars	31st March,2019	31st March,2020
	Amount (Rs)	Amount (Rs)
Stocks of Sports Materials	6,200	4,800
Creditor for Sports Materials	9,800	7,200
Advance to Supplier for Sports Materials	11,000	19,000

Payment to supplier for Sports Materials during the year was RS. 1,02,000. There were no cash purchases made.

Answer

Extract of Income & Expenditure Account for the year ended March 31, 2020
Dr.			Cr.
Expenditure	Amount (Rs.)	Income	Amount (Rs.)
To Sports Material	92,800

Extract of Balance sheet for the year ended March 31, 2019
.	Amount (Rs)	Assets	Amount (Rs)
Creditor for Sports Materials	9,800	Stock of Sports Material	9,800
		Advance to Supplier for Sport Materials	11,000

Extract of Balance sheet for the year ended March 31, 2020
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Creditor for Sports Materials	7,200	Stock of Sports Material	7,500
		Advance to Supplier for Sport Materials	19,000

Working Notes

Sport Items Chargeable to Income and Expenditure Account
for the year ended March 31, 2020
Particulars	Amount (Rs)
Payment for Sport material during the year	1,02,000
Add: Stock of Sports Material as on March 31, 2019	6,200
Add: Creditors for Sport Material for the year 2020	7,200
Add; Advance to Supplier for Sport Materials in 2019	11,000
Less: Stock of Sports Material as on March 31, 2020	(4,800)
Less: Creditors for Sport Material for the year 2020	(9,800)
Less; Advance to Supplier for Sport Materials in 2020	(19,000)
Salaries chargeable to Income and Expenditure Account	92,800

Question 35

How will be the following items dealt while preparing the Balance Sheet for the year ending 31st March, 2020 of Confident Club?

Particulars	Amount (Rs)
(a) Building Fund	5,00,000
Donation Received for the Building	12,50,000
Expenditure on Building Construction (WIP)	11,25,000
(b) Match Fund as on 1st April, 2019	7,500
Donation Received for Matches	12,500
Match Expenses	21,000
Proceeds for Sale of Match Tickets	17,500
(c) Life Membership Fees Received during the Year	20,000
(d) Subscription for Governor's Party	30,000
Outstanding Subscription for Governor's Party	5,000
(e) Capital Fund as on 1st April, 2019	12,50,000

Answer

Extract of Balance sheet for the year ended March 31, 2020
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Capital Fund 12,50,000		Building Construction W-I-P	11,25,000
Add; Life Membership Fee 20,000		Outstanding Subscription for
Add; Building W-I-P 11,25,000	23,95,000	Governor’s Party	5,000
Building Fund 5,00,000
Add; New Donation 12,50,000
Less; Building W-I-P 11,25,000	6,25,000
Match Fund 7,500
Add; New Donation 12,500
Add; Match Ticket Sales 17,500
Less; Match Expenses 21,000	16,500
Governor’s Party Subscription 30,000
Add; Outstanding Sub. 5,000	35,000

Calculation of Gains (Profit) or Loss on sale of Fixed Assets

Question 36

The book value of furniture on 1st April, 2019 is Rs. 60,000. Half of this furniture is sold for Rs. 20,000 on 30th September, 2019. Depreciation is to be charged on furniture @ 10% p.a.

Calculate loss on sale of furniture. Show how the loss on sale and depreciation on furniture will be shown in the Income and Expenditure Account for the year ended 31st March, 2020.

Answer

Dr.	Furniture Account				Cr.
Date	Particulars	Amount (Rs)	Date	Particulars	Amount (Rs)
2019			2019
Apr 1	To Balance b/d	60,000	Sept 30	By Bank A/c (Sales)	20,000
				BY Depreciation A/c (30,000 x 10/100 x 6/12)	1,500
				BY Income and Expenditure A/c (Loss)	8,500
			2020
			Mar 31	BY Depreciation A/c 30,000 x 10/100	3,000
				By Balance C/d	27,000
		60,000			60,000

Income & Expenditure Account for the year ended March 31, 2020
Dr.			Cr.
Expenditure	Amount (Rs.)	Income	Amount (Rs.)
Depreciation on Furniture
(1,500 + 3,000)	4,500
Loss on Sale of Furniture	8,500

Working Note

Calculation for Loss on Sale of Furniture

Particulars	Amount (Rs)
Book Value of Furniture Sold as on April 01, 2019	30,000
Less: Depreciation (for 6 Months) (3,000 × 10% × 6/12)	(1,500)
Book Value of Furniture as on Sept. 30, 2019	28,500
Less: Sale Value	(20,000)
Loss on Sale of Furniture	8,500

Question 37

Delhi Youth Club has furniture at a value of Rs. 2,20,000 in its book on 31st March, 2019. It sold old furniture, having book value of Rs. 20,000 as at 1st April, 2019 at a loss of 20% on 31st December, 2019. Furniture is to be depreciated @ 10% p.a. Furniture costing Rs. 1,50,000 was also purchased on 1st October, 2019.

Prepare Furniture Account for the year ended 31st March, 2020.

Answer

Dr.	Furniture Account				Cr.
Date	Particulars	Amount (Rs)	Date	Particulars	Amount (Rs)
2019			2019
Apr 1	To Balance b/d	2,20,000	Dec 31	By Bank A/c (Sales)	14,800
				BY Depreciation A/c (WN. B1)	1,500
Oct 1	To Bank A/c (Purchase)	1,50,000		BY Income and Expenditure A/c (Loss)	3,700
			2020
			Mar 31	BY Depreciation A/c (Old) (WN. B2)	20,000
				BY Depreciation A/c (New) (WN. B3)	7,500
				By Balance C/d	3,22,500
		3,70,000			3,70,000

Working Notes

A.	Calculation for Sale Value of Furniture
	Particulars	Amount (Rs)
	Book Value of Furniture Sold as on April 01, 2019	20,000
	Less: Depreciation (for 9 Months) (20,000 × 10% × 9/12)	(1,500)
	Book Value of Furniture as on Dec. 31, 2019	18,500
	Less: Loss on Sale of Furniture @ 20%	(3,700)
	Sale Value of Furniture	14,800

B.	Calculation for Depreciation of Furniture	Amount (Rs)
1.	Depreciation on Furniture Sold (10% , 9 Month, Value = 20,000)
	Depreciation = 20,000 × 10% × 9/12	1,500
2.	Depreciation on Remaining Furniture (10% , 12 Month, Value = 2,00,000)
	Depreciation = 2,00,000 × 10%	20,000
3.	Depreciation on New Furniture (10% , 6 Month, Value = 1,50,000)
	Depreciation = 1,50,000 × 10% × 6/12	7,500

Calculation of Amount of Expenses to be Debited to Income and Expenditure Account

Question 38

In the year ended 31st March, 2020, salaries paid amounted to Rs. 2,04,000. Ascertain the amount chargeable to the Income and Expenditure Account for the year ended 31st March, 2020 from the following additional information

	Amount (Rs)
Prepaid Salaries on 31st March, 2019	24,000
Prepaid Salaries on 31st March, 2020	12,000
Outstanding Salaries on 31st March, 2019	18,000
Outstanding Salaries on 31st March, 2020	15,000

Answer

Salaries Chargeable to Income and Expenditure Account
for the year ended March 31, 2020
Particulars	Amount (Rs)
Amount of Salaries paid during the year	2,04,000
Add: Outstanding Salaries as on March 31, 2020	15,000
Add: Prepaid Salaries as on March 31, 2019	24,000
Less: Outstanding Salaries as on March 31, 2019	(18,000)
Less: Prepaid Salaries as on March 31, 2020	(12,000)
Salaries chargeable to Income and Expenditure Account	2,13,000

Calculation of Amount of Expenses to be Credited to Income and Expenditure Account

Question 39

How are the following items dealt with while preparing Income and Expenditure Account of a club for the year ended 31st March, 2020?

	31st March,2020	31st March,2021
	Amount (Rs)	Amount (Rs)
Outstanding Locker Rent	4,600	6,300
Advance Locker Rent	3,000	4,000

Locker Rent received during the year ended 31st March, 2020 – Rs. 52,000.

Answer

Income & Expenditure Account for the year ended March 31, 2020
Dr.			Cr.
Expenditure	Amount (Rs.)	Income	Amount (Rs.)
		By Locker Rent A/c	52,700

Working Notes

Calculation for Locker Rent to be Credited to Income and Expenditure Account
for the year ended March 31, 2020
Particulars	Amount (Rs)
Amount of Locker Rent Received	52,000
Add; Outstanding as on March 31, 2020	6,300
Add; Advance as on March 31, 2019	3,000
Less; Outstanding as on March 31, 2019	(4,600)
Less; Advance as on March 31, 2019	(4,000)
Locker Rent to be Credited to Income and Expenditure Account	52,700

Preparation of Income and Expenditure Account

Question 40

Prepare Income and Expenditure Account for the year ended 31st March, 2020 from the following:

Receipts and Payments Account
Dr.	for the year ended 31 Mar 2020		Cr.
Receipts	Amount (Rs)	Payments	Amount (Rs)
To Balance b/d (cash)	1,80,000	By Salaries	4,80,000
To Subscriptions	9,00,000	By Rent	50,000
To Sale of Investments	2,00,000	By Stationery	20,000
To Sale of Old Furniture (Book Value Rs. 40,000)	30,000	By Defence Bonds	3,00,000
To Donations	10,000	By Furniture	2,00,000
		By Bicycles	30,000
		By Balance c/d (Cash)	2,40,000
	13,20,000		13,20,000

Answer

Income & Expenditure Account
Dr.	for the year ended 31 Mar 2020		Cr.
Expenditure	Amount (Rs.)	Income	Amount (Rs.)
To Salaries	4,80,000	By Subscriptions	9,00,000
To Rent	50,000	By Donation	10,000
To Stationery	20,000
To Loss on sale of Furniture	10,000
To Surplus; Excess of income over expenditure	3,50,000
	9,10,000		9,10,000

Question 41

Prepare Income and Expenditure Account from the following Receipts and Payments Account of Delhi Nursing Society for the year ended 31st March, 2020.

Receipts and Payments Account
Dr.	for the year ended 31 Mar 2020		Cr.
Receipts	Amount (Rs)	Payments	Amount (Rs)
To Balance b\d (Cash at Bank)	2,01,000	By Salaries of Nurses	65,600
To Subscriptions	1,11,500	By Board, Laundry and Domestic Help	38,000
To Fees from Non-members	27,000	BY Rent, Rates and Taxes	20,000
To Government Grant	1,00,000	BY Cost of Car	2,00,000
To Donations for Building Fund	1,56,000	By Expenses of Car	84,000
To Interest	3,800	By Drugs and Incidental Expenses	67,000
		By Balance c/d (Cash at Bank)	1,24,700
	5,99,300		5,99,300

Donation of Rs. 10,000 received for Building Fund was wrongly included in the Subscriptions Account. A Bill of medicines purchased during the year amounted to Rs. 12,800 was outstanding. Government Grant is not for a spefic purpose.

Answer

Income & Expenditure Account
Dr.	for the year ended 31 Mar 2020		Cr.
Expenditure	Amount (Rs)	Income	Amount (Rs)
To salaries of Nurses	65,600	By Subscription 1,11,500
To Board, Laundry and domestic Help	38,000	Less; Donation for Building 10,000	1,05,500
To Rent, Rates and Taxes	20,000	By Government Grant	1,00,000
To Car expenses	84,000	By Fee from Non-Members	27,000
To Drugs and Incidental exp. 67,000		By Interest received	3,800
Add; Outstanding Expenses 12,800	79,800	By Deficit; Excess of expenditure over Income	51,100
	2,87,400		2,87,400

Question 42

Following is the Receipts and Payments Account of You Bee Forty Club for the year ended 31st March, 2020:

Receipts and Payments Account
Dr.	for the year ended 31 Mar 2020		Cr.
Receipts	Amount (Rs)	Payments	Amount (Rs)
To Balance b/d (cash)	1,50,000	By Salaries and Wages	1,60,000
To Subscriptions		By Office Expenses	35,000
2019-20	60,000	By Sports Equipment	3,40,000
2020-21	3,50,000	By Telephone Charges	24,000
To Donations	50,000	By Electricity Charges	32,000
To Entrance Fees	80000	By Travelling Expenses	65,000
		By Balance c/d (Cash)	34,000
	6,90,000		6,90,000

Additional information:

(a) Outstanding Subscriptions for the year ended 31st March, 2020 – Rs. 55,000.

(b) Outstanding Salaries and Wages – Rs. 40,000.

Prepare Income and Expenditure Account of the Club from the above Particulars

Answer

Income & Expenditure Account
Dr.	for the year ended 31 Mar 2020		Cr.
Expenditure	Amount (Rs)	Income	Amount (Rs)
To Salaries & Wages 1,60,000		By Subscription 3,50,000
Add; Outstanding Salaries 40,000	2,00,000	Add; Outstanding 55,000	4,05,000
To Office Expenses	35,000
To Telephone Charges	24,000	By Donations	50,000
To Electricity Charges	32,000	By Entrance Fees	80,000
To Travelling Expenses	65,000
To Depreciation of Sports Equipment	85,000
To Surplus; Excess of income over expenditure	94,000
	5,35,000		5,35,000

Question 43

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 as at 31st March, 2020:

Particulars	Amount (Rs)
Sports Fund as on 1st April, 2019	3,50,000
Sports Fund Investments	3,50,000
Interest on Sports Fund Investments	40,000
Donations for Sports Fund	1,50,000
Sports Prizes awarded	1,00,000
Expenses on Sports Events	40,000
General Fund	8,00,000
General Fund Investments	8,00,000
Interest on General Fund Investments	80,000

Answer

Income & Expenditure Account
Dr.	for the year ended 31 Mar 2020			Cr.
Expenditure		Amount (Rs)	Income	Amount (Rs)
.			By Interest on General fund Investment	80,000

Balance Sheet
as at 31 Mar 2020
Liabilities	Amount (Rs)	Assets	Amount (Rs)
General Fund	8,00,000	Sports fund Investments	3,50,000
Sports Funds (WN. 1)	4,00,000	Investment	8,00,000

	12,00,000		11,50,000

Working Notes 1	Rs.
Sport Funds ( 1st Apr 2019)	3,50,000
Add; Donation for Sport funds	1,50,000
Add; Interest on Sports fund Investment	40,000
	5,40,000
Less; Sport Prizes awarded	1,00,000
Less; Expenses on sport Events	40,000
Sport Funds (31st Mar 2020)	4,00,000

Note: General Fund will be shown on the liabilities side and general fund investments will be shown on the asset side of the balance sheet as on 31st March, 2021.

Question 44

From the following Receipts and Payments Account of Jaipur Sports Club, prepare Income and Expenditure Account for the year ended 31st March, 2021:

Receipts and Payments Account
Dr.	for the year ended 31 Mar 2020		Cr.
Receipts	Amount (Rs)	Payments	Amount (Rs)
To Balance b/d	2,00,000	By Rent	60,000
To Entrance Fees:		(including Rs. 15,000 for 2019–20)
2019 – 20 10,000		By Insurance Premium	60,000
2020 – 21 50,000	60,000	(including Rs. 15,000 for 2021– 22)
To Subscriptions:		By Sports Equipment	50,000
2019 – 20 10,000		By Furniture	60,000
2020 – 21 (90%) 90,000		(Purchased on 31st March, 2021)
2021-22 5,000	1,05,000	By 8% Fixed Deposit	1,20,000
To Life Membership Fees	20,000	(Made on 1st October, 2020)
To Donations	1,20,000	By Tournament Expenses	10,000
To Donation for Tournament	50,000	By Books	20,000
To Subscription for Governor's Party	15,000	By Newspaper	1,000
To Interest on 8% Fixed Deposit	2,400	By Printing and Stationery	19,000
To Sale of Old Newspaper	300	By Balance c/d	1,80,000
To Sale of Old Sports Materials	500
(Book Value Rs. 1,200)
To Locker Rent	6,800
(including Rs. 600 for 2019 – 20)
	5,80,000		5,80,000

Answer

Income & Expenditure Account
Dr.	for the year ended 31 Mar 2020		Cr.
Expenditure	Amount (Rs)	Income	Amount (Rs)
To Rent 60,000		By Entrance fees	50,000
Less; Rent for 2018-19 15,000	45,000	By Subscriptions 90,000
To Insurance Premium 60,000		Add; Outstanding 10,000	1,00,000
Less; Premium for 2020-21 15,000	45,000	By Donation	1,20,000
To Newspapers	1,000	By Interest FD 2,400
To Printing and Stationary	19,000	Add; Accrued Interest 2,400	4,800
To Loss on sale of Old sports Materials	700	By sale of old newspapers	300
		By Locker Rent 6800
		Less; Rent for 2018-19 600	6,200
To Surplus; Excess of income over expenditure	1,70,600
	2,81,300		2,81,300

Working Notes:

Calculation of Interest Accrued on investment

Interest on Investment for 6 Months (1,20,000 × 8% × 6/12)	4,800
Less: Interest Received Rs.	2,400
Accrued Interest on Investment	2,400

Question 45

Prepare Income and Expenditure Account from the following Particulars of Youth Club for the year ended on 31st March, 2018:

Receipts and Payments Account
Dr.	for the year ended 31 Mar 2020		Cr.
Receipts	Amount (Rs)	Payments	Amount (Rs)
To Balance b/d (Cash)	32,500	By Salaries	31,500
To Subscription:		By Postage	1,250
2016-17 1,500		By Rent	9,000
2017-18 60,000		By Printing and Stationery	14,000
2018-19 1,800	63,300	By Sports Material	11,500
To Donations (Billiards Table)	90,000	Bu Miscellaneous Expenses	3,100
To Entrance Fees	1,100	By Furniture (1st October, 2017)	20,000
To Sale of Old Magazines	450	By 10% Investment (1st Oct., 2017)	70,000
		By Balance c/d (31st March, 2018)	27,000
	1,87,350		1,87,350

Additional Information:

(i) Subscription outstanding as at 31st March, 2018 Rs. 16,200.

(ii) Rs. 1,200 is still in arrears for the year 2016-17 for subscription.

(iii) Value of sports material at the beginning and at the end of the year was Rs. 3,000 and Rs. 4,500 respectively.

(iv) Depreciation to be provided @ 10% p.a. on furniture.

Answer

Income & Expenditure Account
Dr.	for the year ended 31 Mar 2020		Cr.
Expenditure	Amount (Rs)	Income	Amount (Rs)
To Salaries	31,500	By Subscription 60,000
To Postage	1,250	Add; Outstanding 15,000	75,000
To Rent	9,000	By Entrance Fees	1,100
To Printing & Stationary	14,000	By Sale of Old Magazines	450
To Misc. Expenses	3,100	By Interest on Investment	3,500
To Sports Material Consumed	10,000
To Depreciation on Furniture	1,000
To Surplus; Excess of income over expenditure	10,200
	80,050		80,050

Working Notes

1. Consumption of Sports Material = Opening Stock+ Purchases-Closing Stock

Consumption of Sports Material = 3,000 + 11,500 – 4,500 = 10,000

2. Depreciation for 6 months

3. Interest on Investment for 6 months

Note: If nothing is mentioned, Entrance fee is to be treated as a revenue receipt.

Question 46

Following is the Receipts and Payments Account of Delhi Football Club for the year ended 31st March, 2020.

RECEIPTS AND PAYMENTS ACCOUNT
Dr.	for the year ended 31 Mar 2020		Cr.
Receipts	Amount (Rs)	Payments	Amount (Rs)
To Balance b\d (Cash)	18,000	BY Building	4,00,000
To Donations for Buildings	4,50,000	By Project Expenses	90,000
To Donations for Buildings	50,000	(Young Talent Search & Development)
To Government Grant	1,00,000	By Match expenses	90,000
(Young Talent Search & Development)		BY Furniture	1,21,000
To Life Membership Fees	40,000	By 10% Investments	1,60,000
To Match Fund	80,000	(Purchased on 1st July, 2019
To Subscriptions	52,000	By Salaries	70,000
To Locker Rent	4,000	By Insurance	3,500
To Interest on Investments	10,000	By Sundry expenses	4,700
To Sale of Furniture	1,00,000	By Balance c/d (Cash)	4,800
(Book Value Rs. 80,000)		By Bank	10,000
To Entrance Fees	50,000	(Young Talent Search & Development)
	9,54,000		9,54,000

Additional Information

(i) During the year ended 31st March, 2020, the Club had 550 members and each paying an annual subscription of Rs. 100.

(ii) Salaries Outstanding as at 1^st April, 2019 were Rs. 10,000 and as at 31^st March, 2020 were Rs. 5,000.

Prepare Income and expenditure Account of the Club for the year ended 31st March, 2020

Answer

Income & Expenditure Account
Dr.	for the year ended 31 Mar 2020		Cr.
Expenditure	Amount (Rs)	Income	Amount (Rs)
To Salaries 70,000		By Subscription 52,000
Add; Outstanding (closing) 5,000		Add; Outstanding 3,000	55,000
Less; Outstanding (Opening) 10,000	65,000	By Donation	50,000
To Insurance	3,500	By Locker Rent	4,000
To Sundry Expenses	4,700	By Interest on Investment 10,000
To Match expenses 90,000		Add; Accrued Int. 2,000	12,000
Less; Match Fund 80,000	10,000	By Profit on Sale of Furniture	20,000
		By Entrance Fees	50,000
To Surplus; Excess of income over expenditure	1,07,800
	1,91,000		1,91,000

Preparation of Income and Expenditure Account and Balance Sheet from

Receipt and Payment Account and Additional Information

Question 47

Following is the summary of cash transactions of the Royal Club for the year ended 31st March, 2020:

Receipts and Payments Account
Dr.	for the year ended 31 Mar 2020		Cr.
Receipts	Amount (Rs)	Payments	Amount (Rs)
To Balance b/d		By Rent	16,800
Cash in Hand 10,000		By Wages	24,500
Cash at Bank 21,900	31,900	By Electricity Charges	7,200
To Entrance Fees	25,500	By Honorarium	43,500
To Subscriptions	1,60,000	By Books	21,300
To Donations	16,500	By Office Expenses	45,000
To Life Membership Fees	25,000	By 3% Fixed Deposit	80,000
To Profit on Entertainment	5,600	(1st October, 2020)
		Cash in Hand 2,000
		Cash at Bank 24,200	26,200
	2,64,500		2,64,500

In the beginning of the year, the club possessed Books of Rs. 2,00,000 and Furniture of Rs. 85,000. Subscriptions in arrears in the beginning of the year amounted to Rs. 3,500 and at the end of the year Rs. 4,500 and six month’s Rent was due both in the beginning of the year and at the end of the year.

Prepare Income and Expenditure Account of the club for the year ended 31st March, 2020 and its Balance Sheet as at that date after writing off Rs. 5,000 and Rs. 11,300 on Furniture and books respectively.

Answer

Income & Expenditure Account
Dr.	for the year ended 31 Mar 2020		Cr.
Expenditure	Amount (Rs)	Income	Amount (Rs)
To Rent 16,800		By Entrance Fees	25,500
Add; Outstanding (closing) 8,400		By Subscriptions 1,60,000
Add; Outstanding (Opening) 8,400	16,800	Add; Arrears (closing) 4,500
To Wages	24,500	Less; Arrears (Beginning) 3,500	1,61,000
To Electricity Charges	7,200	By Legacy	16,500
To Honorarium	43,500	By Surplus from Ent. Events	5,600
To Office Expenses	45,000	By Accrued Interest	1,200
To Depreciation
Books 11,300
Furniture 5,000	16,300
To Surplus; Excess of income over expenditure	56,500
	2,09,800		2,09,800

Balance Sheet (Opening)
as at 1st Apr 2019
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Outstanding Rent	8,400	Books	2,00,000
Capital Fund (Balancing Fig.)	3,12,000	Furniture	85,000
		Subscription Outstanding	3,500
		Cash in Hand	10,000
		Cash at Bank	21,900
	3,20,400		3,20,400

Balance Sheet (Closing)
as at 31 Mar 2020
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Outstanding Rent	8,400	Cash in Hand	2,000
Capital Fund 3,12,000		Cash at Bank	24,200
Add; Life Membership fee 25,000		Accrued Interest	1,200
Add; Surplus 56,500	3,93,500	Subscription Outstanding	4,500
		Books (WN.1)	2,10,000
		Furniture 85,000
		Less; Depreciation 5,000	80,000
		Fixed Deposits	80,000
	4,01,900		4,01,900

Working Notes 1
Books	2,00,000
Add; Purchases	21,300
Less; Depreciation	11,300
	2,10,000

Question 48

From the following Receipts and Payments Account of Social Club and the information supplied, prepare Income and Expenditure Account for the year ended 31st March, 2020 and Balance Sheet as at that date:

Receipts and Payments Account
Dr.	for the year ended 31 Mar 2020		Cr.
Receipts	Amount (Rs)	Payments	Amount (Rs)
To Balance b/d	7,000	By Salaries	28,000
To Subscriptions:		By General Expenses	6,000
2019-20 5,000		By Electricity Charges	4,000
2020-21 20,000		By Books	10,000
2021-22 4,000	29,000	By Newspaper	8,000
To Hire of Ground	14,000	By Balance c/d	4,000
To Surplus from Entertainment Events	8,000
To Sale of Old Newspaper	2,000
	60,000		60,000

(a) The club has 50 members each paying an annual subscription of Rs. 500. Subscriptions Outstanding on 31st March, 2019 were Rs. 6,000.

(b) On 31st March, 2020, Salaries Outstanding amounted to Rs. 2,000. Salaries paid in the year ended 31st March, 2020 included Rs. 6,000 for the year ended 31st March, 2019.

(d) Provide depreciation on Furniture at 10%.

Answer

Income & Expenditure Account
Dr.	for the year ended 31 Mar 2020		Cr.
Expenditure	Amount (Rs)	Income	Amount (Rs)
To Salaries 28,000		By Subscription 20,000
Add; Outstanding 2,000		Add; Outstanding 5,000	25,000
Less; Salaries for 2018-19 6,000	24,000	By Hire of Ground	14,000
To General Expenses	6,000	By Surplus on Ent. Events	8,000
To Electricity Charges	4,000	By Sale of Old Newspapers	2,000
To Newspapers	8,000
To Depreciation on Furniture	2,000
To Surplus; Excess of income over expenditure	5,000
	49,000		49,000

Balance Sheet (Opening)
as at 1st Apr 2019
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Outstanding Salaries	6,000	Building	2,00,000
Capital Fund (Balancing Fig.)	2,47,000	Furniture	20,000
		Books	20,000
		Subscription Outstanding	6,000
		Cash at Bank	7,000
	2,53,000		2,53,000

Balance Sheet (Closing)
as at 31 Mar 2020
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Outstanding Salaries	2,000	Cash at Bank	4,000
Advance Subscription	4,000	Subscription Outstanding
Capital Fund 2,47,000		For 2019-20 5,000
Add; Surplus 5,000	2,52,000	For 2018-19 1,000	6,000
		Building	2,00,000
		Furniture 20,000
		Less; Depreciation 2,000	18,000
		Books 20,000
		Add; Purchases 10,000	30,000
	2,58,000		2,58,000

Question 49

From the following Receipts and Payments Account and additional information given below, prepare Income and Expenditure Account and Balance Sheet of Rural Literacy Society as on 31st March, 2020:

Receipts and Payments Account
Dr.	for the year ended 31 Mar 2020		Cr.
Receipts	Amount (Rs)	Payments	Amount (Rs)
To Balance b/d:		By General Expenses	32,000
Cash in Hand	40,000	By Newspaper	18,500
Cash at Bank	1,55,500	By Electricity	30,000
To Subscriptions:		By Fixed Deposit with Bank	1,80,000
2019-20 12,000		(On 30th Sept., 2020 @ 10% p.a.)
2020-21 2,65,000		By Books	70,000
2021-22 5,000	2,82,000	By Salary	36,000
To Legacy	12,500	By Rent	65,000
To Government Grant	1,20,000	By Postage Charges	3,000
To Sale of Old Furniture	37,000	By Furniture (purchased)	1,05,000
(Book value Rs. 50,000)		By Balance c/d:
To Interest received on Fixed Deposit	4,500	Cash in Hand	30,000
		Cash at Bank	82,000
	6,51,500		6,51,500

Additional information:

(i) Subscription outstanding as on 31st March, 2019 Rs. 20,000 and on 31st March, 2020 Rs. 15,000.

(ii) On 31st March, 2020, salary outstanding Rs. 6,000 and one month rent paid in advance.

(iii) On 1st April, 2019, society owned furniture Rs. 1,20,000 and books Rs. 50,000.

Answer

Income & Expenditure Account
Dr.	for the year ended 31 Mar 2020		Cr.
Expenditure	Amount (Rs)	Income	Amount (Rs)
To General expenses	32,000	By Subscription 2,65,000
To Newspapers	18,500	Add; Outstanding 7,000	2,72,000
To Electricity	30,000	By Legacy	12,500
To Salary 36,000		By Govt. Grant	1,20,000
Add; Outstanding 6,000	42,000	By Interest on FD 4,500
To Rent 65,000		Add; Accrued Interest 4,500	9,000
Less; Prepaid 5,000	60,000
To Postage	3,000
To Loss on Sale of Furniture	13,000
To Surplus; Excess of income over expenditure	2,15,000
	4,13,500		4,13,500

Balance Sheet (Opening)
as at 1st Apr 2019
Liabilities	Amount (Rs)	Assets	Amount (Rs)
		Furniture	1,20,000
Capital Fund (Balancing Fig.)	3,85,500	Books	50,000
		Subscription Outstanding	20,000
		Cash in Hand	40,000
		Cash at Bank	1,55,500
	3,85,500		3,85,500

Balance Sheet (Closing)
as at 31 Mar 2020
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Outstanding Salaries	6,000	Cash in Hand	30,000
Advance Subscription	5,000	Cash at Bank	82,000
Capital Fund 3,85,500		Subscription Outstanding	15,000
Add; Surplus 2,15,000	6,00,500	Prepaid Rent	5,000
		Accrued Interest	4,500
		Fixed deposit with Bank	1,80,000
		Furniture	1,75,000
		Books 50,000
		Add; Purchased 70,000	1,20,000

	6,11,500		6,11,500

Working Note.
1. Calculation for Furniture
Furniture Account
Dr.			Cr.
Expenditure	Amount (Rs)	Income	Amount (Rs)
To Balance b/d	1,20,000	By Bank (sell)	37,000
To Bank (purchase)	1,05,000	By Loss on sale of furniture	13,000
		By Balance c/d	1,75,000
	2,25,000		2,25,000

2. Calculation for Subscription Outstanding
Outstanding on 31 Mar 2020	15,000
Less; Outstanding for 2018-19	8,000	( 20,000 - 12,000)
Outstanding for 2019-20	7,000

Question 50

Glaxo Club's Balance Sheet as at 1st April, 2019 was as under:

Balance sheet
as on March 31, 2019
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Capital Fund	2,00,000	Sports Equipment	50,000
Tournament Fund	60,000	Grounds	1,20,000
Subscriptions in Advance	6,000	Billiards Tables	60,000
Salaries Unpaid	11,000	Subscriptions Outstanding	8,000
		Cash and Bank Balances	39,000
	2,77,000		2,77,000

Receipt and Payments Accounts for the year ended 31st March, 2020 was:

Receipts and Payments Account
Dr.	for the year ended 31 Mar 2020		Cr.
Receipts	Amount (Rs)	Payments	Amount (Rs)
To Opening Balance	39,000	By Wages and Salaries	60,000
To Subscriptions	1,81,000	By Upkeep of Grounds	10,000
To Sale of Old Materials	1,500	By Stationery	15,000
To Sale of Sports Equipment	6,000	By Audit Fee	2,000
(Book value Rs. 10,000)		By Expenses on Tournament	65,000
To Entrance Fees	2,000	By Sports Equipment	20,000
To Life Membership Fees	50,000	By 5% Investments	40,000
To Donations for Tournament	20,000	(On 1st October, 2020)
		By Cash and Bank Balances	87,500
	2,99,500		2,99,500

Answer

Income & Expenditure Account
Dr.	for the year ended 31 Mar 2020		Cr.
Expenditure	Amount (Rs)	Income	Amount (Rs)
To Wages and Salaries 60,000		By Subscription 1,81,000
Add; Outstanding 6,000		Add; Advance (Previous) 6,000
Less; Outstanding (opening) 11,000	55,000	Add; Outstanding (Current) 5,500
To Upkeep of Grounds	10,000	Less; Outstanding (Previous) 8,000
To Stationary	15,000	Less; Advance (Current) 4,000	1,80,500
To Audit Fee	2,000	By Sell of old materials	1,500
To Depreciation on Billiards Table	6,000	By Entrance Fee	2,000
To Loss on sale of Sport Equipment	4,000	By Interest on Investment	1,000
To Consumption of Sport Equip.	15,000
To Surplus; Excess of income over expenditure	78,000
	1,85,000		1,85,000

Balance Sheet
as at 31 Mar 2020
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Outstanding Salaries	6,000	Cash and Bank Balance	87,500
Subscription in Advance	4,000	Outstanding Subscription	5,500
Tournament Fund	15,000	Accrued Interest	1,000
Capital Fund 2,00,000		5% Investment	40,000
Add; Surplus 78,000		Sports Equipment	45,000
Add; Life Membership fee 50,000	3,28,000	Ground	1,20,000
		Billiard Tables 60,000
		Less; Depreciation 6,000	54,000
	3,53,000		3,53,000

Working Notes:

Sports Material Consumed = Opening Stock + Purchases – Closing Stock - Sales

Sports Material Consumed = RS. (50,000 + 20,000 – 45,000 – 10,000) = Rs. 15,000

Question 51

Following is the Receipts and Payments Account of Bharti Club for the year ended 31st March, 2019:

Receipts and Payments Account
Dr.	for the year ended 31 Mar 2020		Cr.
Receipts	Amount (Rs)	Payments	Amount (Rs)
To Balance b/d: ,	10,500	By Salaries	25,000
To Subscriptions	70,500	By Travelling Expenses	4,000
To Donations	5,000	By Stationery	3,000
To Life Membership Fees	10,000	By Rent	32,000
To Income from Investments	2,000	By Books	4,000
		By Balance c/d	30,000
	98,000		98,000

Additional Information:

Particulars	31st March,2018	31st March,2019
	Amount (Rs)	Amount (Rs)
Advance Subscription	2,000	3,500
Outstanding Subscription	3.4	4,300
Books	8,000	12,000
9% Investments	25,000	25,000

Prepare Income and Expenditure Account of the Club for the year ended 31st March, 2019 and its Balance Sheet as at 31st March, 2019.

Answer

Income & Expenditure Account
Dr.	for the year ended 31 Mar 2020		Cr.
Expenditure	Amount (Rs)	Income	Amount (Rs)
To Salaries	25,000	By Subscription 70,500
To Travelling Expenses	4,000	Add; Advance (old) 2,000
To Stationary	3,000	Add; Outstanding (Current) 4,300
To Rent	32,000	Less; Advance (Current) 3,500
		Less; Outstanding (old) 3,400	69,900
		By Donations	5,000
		By Income from Investment 2000
		Add; Accrued Interest 250	2,250
To Surplus; Excess of income over expenditure	13,150
	77,150		77,150

Balance Sheet (Opening)
as at 1st Apr 2019
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Advance Subscription	2,000	Outstanding Subscription	3,400
Capital Fund (Balancing Fig.)	44,900	Books	8,000
		9% Investment	25,000
		Cash and Bank Balance	10,500

	46,900		46,900

Balance Sheet (Closing)
as at 31 Mar 2020
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Capital Fund 44,900		Cash and Bank Balance	30,000
Add; Life Membership Fee 10,000		Outstanding Subscription	4,300
Add; Surplus 13,150	68,050	Books	12,000
Advance Subscription	3,500	9% Investment	25,000
		Accrued Interest	250
	71,550		71,550

Question 52

From the following Receipts and Payments Account of Mumbai Theatre Club, prepare Income and Expenditure Account for the year ended 31st March, 2020 and Balance Sheet as at that date:

Receipts and Payments Account
Dr.			Cr.
Receipts	Amount (Rs)	Payments	Amount (Rs)
To Balance b/d:		By Salary	20,000
Cash and Bank	1,40,000	By Repair Expenses	5,000
To Donations	50,000	By Furniture	60,000
To Subscriptions	1,20,000	By Miscellaneous Expenses	5,000
To Entrance Fees	10,000	By Investments	60,000
To Interest on Investments	1,000	By Insurance Premium	2,000
To Interest Received from Bank	4,000	By Billiard Table	80,000
To Sale of Old Newspaper	1,500	By Paper, lnk, etc.	1,500
To Sale of Drama Tickets	10,500	By Drama Expenses	5,000
		By Balance c/d:
		Cash and Bank	98,500
	3,37,000		3,37,000

Additional Information:

(i) Subscriptions in arrear for the year ended 31st March, 2021 Rs. 9,000 and subscriptions in advance for the year ending 31st March, 2022 Rs. 3,500.

(ii) Insurance Premium outstanding Rs. 400.

(iii) Miscellaneous expenses prepaid Rs. 900.

(iv) 8% interest has accrued on investment for five months.

(v) Billiard Table costing Rs. 3,00,000 was purchased during last year and Rs. 2,20,000 were paid for it.

Answer

Income & Expenditure Account
Dr.	for the year ended 31 Mar 2020		Cr.
Expenditure	Amount (Rs)	Income	Amount (Rs)
To Salary	20,000	By Subscription 1,20,000
To Repairs Exp	5,000	Add; Outstanding 9,000
To Misc. Exp 5,000		Less; Advance 3,500	1,25,500
Less; Prepaid 900	4,100	By Donations	50,000
To Insurance Premium 2,000		By Entrance Fees	10,000
Add; Outstanding 400	2,400	By Interest on Investment 1,000
To Paper, Ink, etc	1,500	Add; Accrued Interest 2,000	3,000
		By Interest Income	4,000
		By Sale of old newspapers	1,500
		By Sale of Drama Tickets 10,500
To Surplus; Excess of income over expenditure	1,66,500	Less; Drama Expenses 5,000	5,500
	1,99,500		1,99,500

Balance Sheet (Opening)
as at 1st Apr 2019
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Creditor for Billiard Table	80,000	Cash and Bank	1,40,000
Capital Fund (Balancing Fig.)	3,60,000	Billiard Table	3,00,000
	4,40,000		4,40,000

Balance Sheet (Closing)
as at 31 Mar 2020
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Capital Fund 3,60,000		Cash and Bank Balance	98,500
Add; Surplus 1,66,500	5,26,500	Prepaid Misc. Exp	900
		Outstanding Subscription	9,000
Advance Subscription	3,500	Accrued Interest	2,000
Outstanding Insurance Premium	400	Furniture	60,000
		Investment	60,000
		Billiard Table	3,00,000
	5,30,400		5,30,400

Question 53

Following Receipts and Payments Account was prepared from the Cash Book of Delhi Charitable Trust for the year ending 31st March, 2020.

Receipts and Payments Account
Dr.	for the year ended 31 Mar 2020		Cr.
Receipts	Amount (Rs)	Payments	Amount (Rs)
To Balance b/d:		By Charity	1,15,000
Cash in Hand	1,15,000	By Rent and Taxes	32,000
Cash at Bank	1,26,000	By Salary	60,000
To Donations	90,000	By Printing	6,000
To Subscriptions	4,28,000	By Postage	3,000
To Legacies Donations	1,80,000	By Advertisements	45,000
To Interest on Investment	45,000	By Insurance	20,000
To Sale of old Newspaper	2,000	By Furniture	2,16,000
		By Investment	2,30,000
		By Balance c/d:
		Cash in Hand	99,000
		Cash at Bank	1,60,000
	9,86,000		9,86,000

Prepare Income and Expenditure Account for the year ended 31st March, 2020, and Balance Sheet as on that date after the following adjustments:

(i) Insurance premium was paid for insurance taken w.e.f. 1st July, 2019.

(ii) Interest on investment Rs. 11,000 accrued was not received.

(iii) Rent Rs. 6,000; Salary Rs. 9,000 and advertisement expenses Rs. 10,000 outstanding as on 31st March, 2020.

(iv) Legacy Donation is towards construction of Library Block.

Answer

Dr.	for the year ended 31 Mar 2020		Cr.
Expenditure	Amount (Rs)	Income	Amount (Rs)
To Charity	1,15,000	By Subscription	4,28,000
To Rent and Taxes 32,000		By Donation	90,000
Add; Outstanding 6,000	38,000	By Interest on Investment 45,000
To Salary 60,000		Add; Accrued Interest 11,000	56,000
Add; Outstanding 9,000	69,000	By Sale of Old Newspaper	2,000
To Printing	6,000
To Postage	3,000
To Advertising 45,000
Add; Outstanding 10,000	55,000
To Insurance 20,000
Less; Prepaid 5,000	15,000
To Surplus; Excess of income over expenditure	2,75,000
	5,76,000		5,76,000

Balance Sheet (Opening)
as at 1st Apr 2019
Liabilities	Amount (Rs)	Assets	Amount (Rs)
		Cash in Hand	1,15,000
Capital Fund (Balancing Fig.)	2,41,000	Cash at Bank	1,26,000

	2,41,000		2,41,000

Balance Sheet (Closing)
as at 31 Mar 2020
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Capital Fund 2,41,000		Cash in Hand	99,000
Add; Surplus 2,75,000	5,16,000	Cash at Bank	1,60,000
Legacy Donation	1,80,000	Prepaid Insurance	5,000
Outstanding Rent	6,000	Accrued Interest	11,000
Outstanding Salary	9,000	Furniture	2,16,000
Outstanding Adv. Exp	10,000	Investment	2,30,000
	7,21,000		7,21,000

Question 54

From the following Receipts and Payments Account of Kapil Dev Club and from the given additional information, prepare Income and Expenditure Account for the year ending 31st December, 2020 and the Balance Sheet as at that date:

Receipts and Payments Account
Dr.	for the year ended 31 Mar 2020		Cr.
Receipts	Amount (Rs)	Payments	Amount (Rs)
To Balance b/d	1,90,000	By Salaries	3,30,000
To Subscriptions	6,60,000	By Sports Material	4,00,000
To Interest on Investment	40,000	By Balance c/d	1,60,000
@ 8% p.a. for full year
	8,90,000		8,90,000

Additional Information:

(i) The club had received Rs. 20,000 for subscription in 2018-19 for 2019-20.

(ii) Salaries had been paid only for 11 months.

(iii) Stock of sports materials on 31st March, 2019 was Rs. 3,00,000 and on 31st March, 2020 Rs. 6,50,000.

Answer

Income & Expenditure Account
Dr.	for the year ended 31 Mar 2020		Cr.
Expenditure	Amount (Rs)	Income	Amount (Rs)
To Salaries 3,30,000		By Subscription 6,60,000
Add; Outstanding 30,000	3,60,000	Add; Received in 2018-19 20,000	6,80,000
To Sport Material Consumed	50,000	Interest on Investment	40,000
To Surplus; Excess of income over expenditure	3,10,000
	7,20,000		7,20,000

Balance Sheet (Opening)
as at 1st Apr 2019
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Advance Subscription	20,000	Cash Balance	1,90,000
Capital Fund (Balancing Fig.)	9,70,000	Stock of Sport Material	3,00,000
		Investment	5,00,000
	9,90,000		9,90,000

Balance Sheet (Closing)
as at 31 Mar 2020
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Capital Fund 9,70,000		Cash Balance	1,60,000
Add; Surplus 3,10,000	12,80,000	Investment	5,00,000
Outstanding Salaries	30,000	Sport Material	6,50,000

	13,10,000		13,10,000

Working Notes
1. Calculation for Investment
Interest on investment @ 8% =	40,000
Investment = 40,000 x 100/8	5,00,000

2. Sports Material Consumed
Purchased during the Year	4,00,000
Add; Opening Stock	3,00,000
Less; Closing Stock	-6,50,000
Amount of Sports Material Consumed	50,000

3. Calculation of Outstanding Salaries

Outstanding Salaries = 3,30,000×11=30,000

4. Calculation of Investments

Investments = 40,000×100/8=5,00,000

Question 55

Given Below is the Receipts and Payments Account of a Mayur Club for the year ended 31st March, 2020:

Receipts and Payments Account
Dr.	for the year ended 31 Mar 2020		Cr.
Receipts	Amount (Rs)	Payments	Amount (Rs)
To Balance b/d	1,02,500	By Salaries	60,000
To Subscriptions:		By Expenses	7,500
2019-20 4,000		By Drama Expenses	45,000
2020-21 2,05,000		By Newspaper	15,000
2021-22 6,000	2,15,000	By Municipal Taxes	4,000
To Donations	54,000	By Charity	35,000
To Proceeds of Drama Tickets	95,000	By Investments	2,00,000
To Sale of Waste Paper	4,500	By Electricity Charges	14,500
		By Balance c/d	90,000
	4,71,000		4,71,000

Prepare club's Income and Expenditure Account for the year ended 31st March, 2020 and Balance Sheet as at that date after taking the following information into account:

(i) There are 500 Members, each paying an annual subscription of Rs. 500, Rs. 5,000 are still in arrears for the year ended 31st March, 2019.

(ii) Municipal Taxes amounted to Rs. 4,000 per year is paid up to 30th June and Rs. 5,000 are outstanding of salaries.
(iii) Building stands in the books at Rs. 5,00,000.

(iv) 6% interest has accrued on investments for five months.

Answer

Income & Expenditure Account
Dr.	for the year ended 31 Mar 2020		Cr.
Expenditure	Amount (Rs)	Income	Amount (Rs)
To Salary 60,000		By Subscription 2,05,000
Add; Outstanding 5,000	65,000	Add; Outstanding 45,000	2,50,000
To Expenses	7,500	By Donation	54,000
To Newspapers	15,000	BY Accrued Interest	5,000
To Municipal Tax 4,000		By Profit from Drama
Add; Prepaid 2018-19 1,000		Proceed from tickets 95,000
Less; Prepaid 2019-20 (1,000)	4,000	Less; Drama Exp. 45,000	50,000
To Charity	35,000	By Sale of Waste Papers	4,500
To Electricity Charges	14,500
To Surplus; Excess of income over expenditure	2,22,500
	3,63,500		3,63,500

Balance Sheet (Opening)
as at 1st Apr 2019
Liabilities	Amount (Rs)	Assets	Amount (Rs)
		Cash Balance	1,02,500
		Municipal Tax Prepaid	1,000
Capital Fund (Balancing Fig.)	6,12,500	Subscription outstanding	9,000
		Building	5,00,000
	6,12,500		6,12,500

Balance Sheet (Closing)
as at 31 Mar 2020
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Advance Subscription	6,000	Cash Balance	90,000
Salary Outstanding	5,000	Subscription Outstanding
Capital Fund 6,12,500		For 2019-20 45,000
Add; Surplus 2,22,500	8,35,000	For 2018-19 5,000	50,000
		Municipal Tax Prepaid	1,000
		Accrued Interest	5,000
		Building	5,00,000
		Investment	2,00,000
	8,46,000		8,46,000

Question 56

From the following information and Receipts and Payments Account of Delhi Medical Society, prepare Income and Expenditure Account for the year ended 31st March, 2020 and Balance Sheet as at that date.

Receipts and Payments Account
Dr.	for the year ended 31 Mar 2020		Cr.
Receipts	Amount (Rs)	Payments	Amount (Rs)
To Balance b/d	31,900	By Rent	16,800
To Entrance Fees	5,500	By Wages	24,500
To Subscriptions	1,80,000	By Lighting Charges	7,200
To Donations	16,500	By Books	24,800
To Life Membership Fees	25,000	By Medicines	1,00,000
To Government Grant	2,00,000	(Polio Eradication Project)
(Polio Eradication Project)		By Salaries to Doctors	80,000
To Proceeds of Seminar	23,200	(Polio Eradication Project)
To Interest on Deposits	2,400	By Office Expenses	45,000
		By 8% Fixed Deposits	1,20,000
		(On 1st October, 2020)
		By Seminar Expenses	20,200
		By Cash in Hand	26,000
		By Bank A/c	20,000
		(Polio Eradication Project)
	4,84,500		4,84,500

Other Information:
On 31st March, 2019, the Club possessed books of Rs. 2,00,000 and Furniture of Rs. 85,000. Provide depreciation on these assets @ 10% including the purchases during the year.
Subscriptions in arrears in the beginning of the year amounted to Rs. 3,500 and at the end of the year Rs. 5,500 were outstanding.
The Club paid three months' rent in advance both in the beginning and at the end of the year.

Answer

Books of Delhi Medical Society
Income & Expenditure Account
Dr.	for the year ended 31 Mar 2020		Cr.
Expenditure	Amount (Rs)	Income	Amount (Rs)
To Rent A/c 16,800		By Entrance Fees A/c	5,500
Add; Advance in beginning 4,200		By Subscriptions A/c 1,80,000
Less; Advanced at the end (4,200)	16,800	Add; Arrear at the end 5,500
To Wages A/c	24,500	Less; Arrear in the beginning (3,500)	1,82,000
To Lighting Charges A/c	7,200	By Donations A/c	16,500
To Office Expenses A/c	45,000	By Interest on Deposits A/c 2,400
To Depreciation A/c		Add: Accrued Interest 2,400	4,800
Furniture 8,500		By Profit from Seminar:
Books 22,480	30,980	Proceeds of Seminar 23,200
To Surplus; Excess of income over expenditure	84,320	Less: Expenses (20,200)	3,000
	2,08,800		2,11,800

Balance Sheet (Opening)
as at 1st Apr 2019
Liabilities	Amount (Rs)	Assets	Amount (Rs)
		Advance Rent	4,200
Capital Fund (Balancing Fig.)	3,24,600	Subscription-in-Arrears	3,500
		Books	2,00,000
		Furniture	85,000
		Cash in Hand	31,900
	3,24,600		3,24,600

Balance Sheet (Closing)
as at 31 Mar 2020
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Government Grant 2,00,000		Cash in Hand	26,000
Less; Medicines 1,00,000		Cash at Bank	20,000
Less; Salaries 80,000	20,000	Advance Rent	4,200
Capital Fund 3,24,600		Subscription-in-Arrears	5,500
Add; Surplus 87,320		Accrued Interest on Fixed Deposits	2,400
Add; Life Membership 25,000	4,36,920	8% Fixed Deposits	1,20,000
		Books 2,00,000
		Add; Purchased 24,800
		Less; Depreciation 22,480	2,02,320
		Furniture 85,000
		Less; Depreciation 8,500	76,500
	4,56,920		4,56,920

Question 57

Receipts and Payments Account of Shankar Sports Club is given below for the year ended 31st March, 2020:

Receipts and Payments Account
Dr.	for the year ended 31 Mar 2020		Cr.
Receipts	Amount (Rs)	Payments	Amount (Rs)
To Cash in Hand (Opening)	2,600	By Rent	18,000
To Entrance Fee	3,200	By Wages	7,000
To Donation for Building	23,000	By Billiard Table	14,000
To Locker Rent	1,200	By Furniture	10,000
To Life Membership Fee	7,000	By Interest	2,000
To Profit from Entertainment	3,000	By Postage	1,000
To Subscription	40,000	By Salary	24,000
		By Cash In Hand (Closing)	4,000
	80,000		80,000

Prepare Income and Expenditure Account and Balance Sheet with the help of following information:

Subscription outstanding on 31st March, 2019 is Rs. 1,200 and Rs. 2,300 on 31st March, 2020; opening stock of postage stamps is Rs. 300 and closing stock is Rs. 200; Rent Rs. 1,500 related to the year ended 31st March, 2020 and Rs. 1,500 is still unpaid. On 1st April, 2019 the club owned furniture Rs. 15,000, Furniture valued at Rs. 22,500 on 31st March, 2020. The club has a loan of Rs. 20,000 (@ 10% p.a.) which was taken, in year ended 31st March, 2019.

Answer

In the books of Shankar Sports Club
Income & Expenditure Account
Dr.	for the year ended 31 Mar 2020		Cr.
Expenditure	Amount (Rs)	Income	Amount (Rs)
To Rent A/c	18,000	By Entrance Fess A/c	3,200
To Wages A/c	7,000	By Locker Rent A/c	1,200
To Interest A/c	2,000	By Profit from Entertainment A/c	3,000
To Postage Consumed A/c (WN1)	1,100	By Subscriptions A/c 40,000
To Depreciation on Furniture A/c (WN2)	2,500	Less; Outstanding for 2020 2,300
To Salary A/c	24,000	Less; Outstanding for 2019 1,200	41,100
		By Deficit; Excess of expenditure over Income	6,100
	54,600		54,600

Balance Sheet (Opening)
as at 1st Apr 2019
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Loan @ 10 % p.a.	20,000	Furniture	15,000
Outstanding Rent	1,500	Postage	300
		Outstanding Subscription	1,200
		Cash in Hand	2,600
		Capital Fund (Balancing Fig.)	2,400
	21,500		21,500

Balance Sheet (Closing)
as at 31 Mar 2020
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Loan @ 10 % p.a.	20,000	Capital Fund Deficit 2,400
Donation for Building	23,000	Add; Deficit in I & E A/c 6,100	8,500
Life Membership Fee	7,000	Furniture	22,500
Outstanding Rent	1,500	Billiard Table	14,000
		Postage	200
		Outstanding Subscription	2,300
		Cash in Hand	4,000
	51,500		51,500

Working Notes

1. Calculation for Stamp Used

Stamp Used = Opening Stock + Purchases - Closing Stock

Stamp Used = 300 + 1000 – 200 = Rs. 1,100

2. Calculation for Depreciation

Depreciation on Furniture = Opening Value + Purchases – Closing Value

Depreciation on Furniture = RS. 15,000 + 10,000 – 22,500 = Rs. 2,500

Question 58

From the following Particulars relating to the Ramakrishna Mission Charitable Hospital, prepare Income and Expenditure Account for the year ended 31st March, 2020 and Balance Sheet as at that date.

Receipts and Payments Account
Dr.	for the year ended 31 Mar 2020		Cr.
Receipts	Amount (Rs)	Payments	Amount (Rs)
To Cash in Hand on 1st April, 2020	71,300	By Medicines	3,05,900
To Subscriptions	4,79,960	By Doctor's Honorarium	90,000
To Donations	1,45,000	By Salaries	2,75,000
To Interest on Investment	70,000	By Petty Expenses	4,610
(@ 7% for full year)		By Equipment	1,50,000
To Proceeds from Charity Show	1,04,500	By Expenses on Charity Show	7,500
		By Cash in Hand on 31st Mar, 2020	37,750
	8,70,760		8,70,760

Additional Information:	As at 1st April,2019 (Rs.)	As at 31st March, 2020 (Rs)
Subscriptions Due	2,400	2,800
Subscriptions Received in Advance	640	1,000
Stock of Medicines	88,100	97,400
Estimated value of Equipment	2,12,000	3,16,000
Building (cost less depreciation)	4,00,000	3,80,000

Answer

Books of Rama Krishna Mission Charitable Hospital
Income & Expenditure Account
Dr.	for the year ended 31 Mar 2020		Cr.
Expenditure	Amount (Rs)	Income	Amount (Rs)
To Medicine A/c 3,05,900		Subscription 4,79,960
Add; Opening Stock 88,100		Add; Due for 2019-20 2,800
Less; Closing Stock 97,400	2,96,600	Add; Advance for 2019-20 640
Doctor’s Honorarium	90,000	Less; Due for 2018-19 2,400
Salaries	2,75,000	Less; Advance for 2020-21 1,000	4,80,000
Petty Expenses	4,610	Donations	1,45,000
Expenses on Charity Show	7,500	Interest on Investments	70,000
To Depreciation on Equipment	46,000	Proceeds from Charity Show	1,04,500
To Depreciation on Building	20,000
To Surplus; Excess of income over expenditure	59,790
	7,99,500		7,99,500

Balance Sheet (Opening)
as at 1st Apr 2019
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Advance Subscription	640	Subscription Due	2,400
		Stock of Medicines	88,100
		Equipment	2,12,000
		Building	4,00,000
		Cash in Hand	71,300
Capital Fund (Balancing Fig.)	17,73,160	Investments	10,00,000
	17,73,800		17,73,800

Balance Sheet (Closing)
as at 31 Mar 2020
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Advance Subscription	1,000	Subscription Due	2,800
Capital Fund 17,73,160		Stock of Medicines	97,400
Add: Surplus 59,790	18,32,950	Equipment 2,12,000
		Add: Purchases 1,50,000
		Total 3,62,000
		Less; Depreciation 46,000	3,16,000
		Building 4,00,000
		Less; Depreciation 20,000	3,80,000
		Cash in Hand	37,750
		7% Investments	10,00,000
	18,33,950		18,33,950

Working Note:

Calculation of Value of Investments

Interest on Investment = Investment x 7/100

ð Investment = Interest on Investment x 100/7

ð Investment = 70,000 x 100/7 = Rs. 10,00,000

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