Question

Dr. Anish Korgaonkar started the practice of Medical Practioner on 1^st April 2019. He gives you the Receipts and Payments Account for the year ended 31^st March 2020 and the adjustments.
Prepare the Income and Expenditure Account for the year ended 31^st March 2020 and the Balance Sheet as on that date:

Dr.	Dr. Anish Korgaonkar's Receipts and Payments Account for the year ended 31st March 2020		Cr.
Receipts	Amount (₹)	Payments	Amount (₹)
To Cash introduced	50,000	By Furniture	16,000
To visit fees	20,000	By Equipment	20,000
To Receipts from dispensary	60,000	By Drugs	14,000
To Sundry receipts	10,000	By Salaries	24,000
		By Rent	12,000
		By Conveyance	8,000
		By Stationery	1,000
		By Electrical charges	10,000
		By Journals	1,000
		By Drawings	30,000
		By Balance c/d	4,000
	1,40,000		1,40,000

Additional information:

1. Receipts in arrears are visit fees ₹ 4,000 and dispensary ₹ 1,000
2. Outstanding expenses - Rent ₹ 1,000 and Salaries ₹ 2,000
3. Stock of drugs ₹ 2.000
4. Depreciate furniture @ 8% p.a. and equipment ₹ 1.000.
5. 40% of the conveyance expenses are for domestic use.

Answer 1

Dr.	Income and Expenditure Account for the year ended 31st March 2020				Cr.
Expenditure	Amount (₹)	Amount (₹)	Income	Amount (₹)	Amount (₹)
To Rent	12,000	13,000	By Visit fees	20,000	24,000
Add: O/s	1,000		Add: O/s	4,000
To salaries	24,000	26,000	By Receipts from dispensary	60,000	61,000
Add: O/s	2,000		Add: O/s	1,000
To Drugs	14,000	12,000	By Sundry receipts		10,000
Less: Stock of drugs	2,000
To Depreciation on furniture		1,280
To Depreciation on equipment		1,000
To Conveyance	8,000	4,800
Less: 40% domestic use	3,200
To Stationery		1,000
To Electrical charges		10,000
To Journals		1,000
To Surplus (Excess of Income over expenditure)		24,920
		95,000			95,000

 

Balance Sheet as on 31st March, 2020
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Capital Fund (Cash Introduced)	50,000	41,720	Furniture	16,000	14,720
Add: Surplus	24,920		Less: 8% Depreciation	1,280
	74,920		Equipment	20,000	19,000
Less: Drawings	30,000		Less: Depreciation	1,000
	44,920		Visit fees receivable		4,000
Less: 40% domestic use	3,200		Outstanding dispensary		1,000
Outstanding Rent		1,000	Stock of drugs		2,000
Outstanding Salaries		2,000	Cash in hand		4,000
		44,720			44,720