Question

Following is the Receipts and Payments Account of Indian Youth Club for the year ended 31st March, 2021:

'Receipts and Payments Account' of Indian Youth Club for the year ended 31st March, 2021
Receipts	Amount (₹)	Amount (₹)	Payments	Amount (₹)	Amount (₹)
To Balance b/d:			By Salaries		3,60,000
Cash	25,000	3,10,000	By Printing & Stationary		19,000
Bank	2,85,000		By Printer		40,000
To Subscriptions		4,00,000	By Investments		80,000
(including ₹ 40,000 for year ending 31.3.2022)			By Balance c/d:
To Interest on investments		1,000	Cash	12,000	2,12,000
			Bank	2,00,000
		7,11,000			7,11,000

Additional Information:

1. Investments were made on 1st October, 2020 @ 5% p.a.
2. Salaries for March, 2021 ₹ 5,000 are unpaid.
3. ₹ 3,000 are payable for stationery.

Prepare Income and Expenditure Account of the Club for the year ended 31st March, 2021.

Answer 1

Indian Youth Club  Income and Expenditure A/c for the year ended 31st March, 2021
Expenditure	Amount (₹)	Amount (₹)	Income	Amount (₹)	Amount (₹)
To Salaries	3,60,000	3,65,000	By Subscription	4,00,000	3,60,000
Add: Outstanding	5,000		Less: Received	40,000
To Printing and Stationary	19,000	22,000	By Interest on investments	1,000	2,000
Add: Outstanding	3,000		Add: Accrued	1,000
			By Excess of Expenditure over Income - Deficit		25,000
		3,87,000			3,87,000

Working Note:

Interest on Investments = ₹ `80,000 xx 5/100 xx 6/12` = ₹ 2,000

Interest already received = ₹ 1,000

Interest accrued = ₹ 2,000 - ₹ 1,000 = ₹ 1,000

Note: Closing stock of stationery has not been given. So it is assumed that whole of the stationery purchased of (19,000 + 3,000) = ₹ 22,000 has been consumed.