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Question
Answer in one sentence only.
What is legacy?
Solution
Legacy is the money received by a not-for profit organisation (NPO) as per the will of a deceased person. It is not the main source of income for an NPO. It is treated as a capital receipt.
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Following is the Balance Sheet and Receipts and Payments Account of the Sevagiri Hospital, Satara.
Prepare Income and Expenditure account for the year ended on 31 st March, 2013 and Balance Sheet as on that date :
Balance Sheet as on 1st April, 2012
| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
| Capital fund | 1000000 | Cash in hand | 6000 |
| Outstanding Salaries | 22000 | Cash at bank | 30000 |
| Medical bill unpaid | 6000 | Land and building | 800000 |
| Furniture | 70000 | ||
| Equipments | 120000 | ||
| Outstanding Subscription | 2000 | ||
| 1028000 | 1028000 |
Receipts and Payments Account for the year ending 31.03.2013
| Dr. | Cr. | ||
| Receipts | Amount (Rs.) | Payments | Amount (Rs.) |
|
To Balance b/d Cash in hand Cash at bank |
6000 30000 |
By Salaries (including of previous year) |
110000
|
|
To Subscription (includes 2000 received for previous year) |
130000
|
By Medicines | 48000 |
|
To Sale of old furniture (book value Rs. 30000) |
20000
|
By Equipment purchased | 20000 |
|
To Donations (revenue) |
44000
|
By Taxes | 3000 |
| To Life membership fees | 25000 | By General expenses | 8600 |
|
By Balance c/d Cash in hand Cash at bank |
15400 50000 |
||
| 255000 | 255000 |
Consider the following adjustments :
- Outstanding subscription Rs. 15,000.
- Capitalise the amount of life membership fees.
- Pre-paid taxes Rs. 500.
- Outstanding salary Rs. 12,000.
- Write off depreciation Rs. 20,000 from land and building and Rs. 30,000 from equipments.
- Outstanding medicine bill as on 01.04.2012 is still due.
Mrs. Meena of Bilaspur has not kept proper books of accounts, following information is provided to you.
| Particulars | 31.3.2012 | 31.3.2013 |
| Amount (Rs. ) | Amount (Rs.) | |
| Machinery | 50000 | 50000 |
| Furniture | 50000 | 30000 |
| Debtors | 18000 | 25000 |
| Creditors | 18000 | 20000 |
| Stock | 30000 | 42000 |
| Outstanding Expenses | 1500 | - |
| Prepaid Expenses | - | 500 |
| Cash at Bank | 28000 | 40000 |
(1) Mrs. Meena introduced additional capital as on 1st October, 2012 by selling her personal car is Rs. 10,000.
(2) She paid her daughter's college fees from business bank account Rs. 3,000.
(3) Depreciate machinery by 5% p.a.
(4) Provide 2% on debtors for Bad and Doubtful debts.
(5) Interest on capital is to be provided @ 5% p.a. and on drawings @ 5% p.a.
Prepare : Opening and closing statement of affairs and statement of profit or loss for the year ended 31st March, 2013.
Following is the Receipts and Payments Account of Chamber of Commerce, Amaravati for the year ending 31st March 2012 and some additional information.
| Receipts and Payments Account For the year ended March 31, 2012 | |||
| Receipts | Amount | Payment | Amount |
| To balance b/d (Cash at bank) | 11,960 | By Printing and Stationery | 6,950 |
| To Subscription (Including Rs. 2,500 for 2010–11) | 36,500 | By Repairs | 2,100 |
| To Sale of furniture (Books value Rs. 18,000) | 12,000 | By Rent | 8,500 |
| To Donation for building fund | 27,000 | By Books | 20,000 |
| To Admission fees (Revenue) | 5,050 | By Travelling expenses | 2,000 |
| By Investments | 40,000 | ||
| By Insurance | 1,700 | ||
| By Balance c/d (Cash at bank) | 11,260 | ||
| 92,510 | 92,510 | ||
| Particulars | 1.04.2011 | 31.03.2012 |
| Outstanding Subscription |
3,000 | 5,000 |
| Furniture | 32,000 | 12,600 |
| Building Fund | 1,45,000 | |
| Capital Fund | 1,51,960 | |
| Investment | 2,50,000 |
Prepare Income and Expenditure A/c for the year ended 31st March, 2012 and Balance Sheet as on that date.
| Balance Sheet as on 1st April 2007 | |||
| Liabilities | Amount (Rs) | Assets | Amount (Rs) |
| Entrance Fees | 6,000 | Furniture | 16,800 |
| Capital Fund | 1,03,800 | Laboratory | 20,000 |
| Library | 25,000 | ||
| Investment | 40,000 | ||
| Cash in hand | 1,000 | ||
| Cash at bank | 3,000 | ||
| Outstanding Tuition Fees | 4,000 | ||
| 1,09,800 | 1,09,800 | ||
| Receipts and Payments Account for the year ended 31st March 2008 | |||
| Receipts | Amount (Rs) | Payments | Amount (Rs) |
| To Balance b/d | By Furniture Purchased | 5,400 | |
| Cash in hand | 1,000 | By Salaries | 60,000 |
| Cash at bank | 3,000 | By Rent | 28,000 |
| To Tuition Fees | 80,000 | By Sundry Expenses | 15,200 |
| To Term Fees | 26,200 | By Annual Gathering Expenses | 11,300 |
| To Government Grant | 16,000 | By Insurance | 4,000 |
| To Donation of Library | 30,000 | By Closing Balance | |
| To Interest on Investment | 2,000 | Cash at bank | 34,300 |
| 1,58,200 | 1,58,200 | ||
Adjustments:
1. Tuition fees still receivable are Rs. 10,000.
2. Salaries still payable are Rs. 30,000
3. An insurance premium is paid for one year ending 30.9.2008.
4. Rent paid in advance Rs. 4,000.
5. Depreciate furniture and library at 10%.
Depreciation to be charged on the closing balances of the assets.
Expenditure on purchase of a building is a _____.
Following is the Balance Sheet as on 1.4.2009 and the Receipts and Payments Account for the year ending 31.3.2010 of Bright Students Junior College, Pune.
Balance Sheet as on 1.4.2009
|
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Capital fund (Balancing figure) |
13,18,000 |
Building Furniture Books Bank deposits Tuition fees receivable Cash in hand Cash at bank |
10,00,000 1,20,000 60,000 1,00,000 10,000 19,000 9,000 |
|
13,18,000 |
13,18,000 |
Receipts and Payment Account
For the year ended 31.03.2010
|
Receipts |
Amount |
Payments |
Amount |
|||
|
To Balance b/d |
|
By Salaries to teachers |
1,80,000 |
|||
|
Cash in hand |
9,000 |
By Salaries to office staff |
30,000 |
|||
|
Cash at bank |
19,000 |
By Books purchased on 1.1.2010 |
20,000 |
|||
|
To Tuition fees |
|
By Printing and stationary |
41,000 |
|||
|
2008-2009 : |
10,000 |
|
By Office rent |
10,000 |
||
|
2009-2010 : |
1,70,000 |
1,80,000 |
By Repair to Jr. College building |
24,000 |
||
|
To Fine collected |
5,200 |
By Sports expenses |
8,600 |
|||
|
To Admission fees |
20,000 |
By Annual gathering expenses |
14,000 |
|||
|
To Donations |
1,00,000 |
By Furniture (Purchased on 1.1.2010) |
80,000 |
|||
|
To Interest on bank deposits |
5,000 |
By Balance c/d |
|
|||
|
To Government grant (Revenue) |
2,00,000 |
Cash in hand |
2,600 |
|||
|
|
|
Cash at bank |
1,28,000 |
|||
|
|
5,38,200 |
|
5,38,200 |
|||
Additional information:
(1) For the current year (2009–2010) tuition fees receivable (outstanding) Rs 24,000.
(3) Salary to teachers is outstanding Rs 12,000.
You are required to prepare:
(b) Balance Sheet as on 31.3.2010
Following is the Receipts and Payments Account and additional information of Kalpana Hospital, Sakri.
|
Receipts and Payments Account for the year ended on 31st March, 2010 |
||||||
|
Dr. |
Cr. |
|||||
|
Receipts |
Amount |
Payments |
Amount |
|||
|
To Balance b/d |
6,000 |
By Medicines |
10,000 |
|||
|
To Subscriptions: |
|
By Honorarium to Doctors |
75,000 |
|||
|
2008-2009 |
7,500 |
|
By Ambulance Maintenance |
44,000 |
||
|
2009-2010 |
95,000 |
|
By Hospital Equip. purchased |
30,000 |
||
|
2010-2011 |
15,000 |
1,17,500 |
By Furniture purchased |
25,000 |
||
|
To Donations |
55,000 |
By Fixed Deposits |
1,00,000 |
|||
|
To Life Membership Fees |
25,000 |
By Balance c/d (31.3.10) |
69,500 |
|||
|
To Hospital Receipts (Revenue) |
1,50,000 |
|
|
|||
|
|
3,53,500 |
|
3,53,500 |
|||
Additional Information:
(1) Outstanding subscription for 2009-2010 is amounted to Rs. 5,000.
(2) Hospital equipments and furniture were purchased on 1.10.2009 and both were to be depreciated at 20% p. a.
(3) Life membership fees are to be capitalized.
(4) Donations represent donations for Building fund.
(5) Staff salary for the current year is outstanding Rs. 7,500.
(6) On 1.4.2009, the hospital had the following assets and liabilities:
Land Rs. 2,50,000, Investments Rs. 50,000, Ambulance Rs. 1,02,500, Bank Loan Rs. 2,00,000.
(7) Capital Fund as on 1.4.2009 was amounted to Rs. 2,16,000.
Prepare: Income and Expenditure Account for the year ending 31st March, 2010 and the Balance Sheet as on that date.
Following is the Balance Sheet of Anil and Sunil.
|
Balance Sheetas on 31st March, 2008 |
||||
|
Liabilities |
Amount (Rs) |
Assets |
Amount (Rs) |
|
|
Capitals : |
|
|
|
|
|
Anil |
3,60,000 |
Machinery |
3,60,000 |
|
|
Sunil |
2,40,000 |
Computer |
60,000 |
|
|
Profit and Loss A/c |
60,000 |
Stock in trade |
2,70,000 |
|
|
Creditors |
93,000 |
Debtors |
1,26,000 |
|
|
Bank overdraft |
87,000 |
Cash |
24,000 |
|
|
|
|
|
|
|
|
|
8,40,000 |
|
8,40,000 |
|
The Profit and Losses for the last 5 years were:
|
Years |
2003-04 |
2004-05 |
2005-06 |
2006-07 |
2007-08 |
|
(Rs) |
1,50,000 |
1,80,000 |
72,000 |
12,000 |
60,000 |
|
(Profit) |
(Profit) |
(Profit) |
(Loss) |
(Profit) |
You are required to calculate the value of Goodwill at 5 years’ purchase of super profit assuming that the normal rate of return is 10% on capital employed in the similar business.
Match the following pairs :
| Group ‘A’ | Group ‘B’ | ||
| (1) | Income and Expenditure A/c | (a) | Withdrawals in cash or kind |
| (2) | Drawings | (b) | Negotiable instrument |
| (3) | Bill of Exchange | (c) | Similar to Profit and Loss account |
| (4) | Co-venturers’ Liability | (d) | Limited |
| (5) | Intangible Asset | (e) | Computer |
|
|
|
(f) | Unlimited |
|
|
|
(g) | Goodwill |
|
|
|
(h) | Building |
Answer in one sentence only.
What is Capital Fund?
Answer in one sentence only.
What do you mean by recurring expenses?
Answer in one sentence only.
What does ‘surplus’ mean?
Answer in one sentence only.
What do you mean by non-recurring expenses?
Write one Word / Term / Phrase for the following statement.
An Account, which is prepared by ‘Not for Profit’ concern, instead of Profit and Loss Account.
Write one Word / Term / Phrase for the following statement.
A statement showing the financial position of a concern on a particular date.
Select the most appropriate answer from the alternatives given below and rewrite the sentence.
Excess of income over Expenditure is termed as _________________.
Select the most appropriate answer from the alternatives given below and rewrite the sentence.
An Income and Expenditure Account and a Balance sheet is prepared as final accounts by a ______________ .
State whether the following statement is True or False.
Every year, ‘Bal Vikas Mandir’, a primary school, prepares Income and expenditure Account.
State whether the following statement is True or False.
In the Income and Expenditure Account, all incomes received during the year irrespective of the year for which they are received, are to be recorded.
State whether the following statement is True or False.
The final balancing amount of Income and Expenditure Account represents either surplus or Deficit.
|
LIABILITIES
|
AMOUNT
|
ASSETS
|
AMOUNT
|
|
Capital Fund
|
502000
|
Cash in Hand
|
3000
|
|
Medical bill Unpaid
|
3000
|
Cash at Bank
|
6000
|
|
Land and Building
|
400000
|
||
|
Furniture
|
35000
|
||
|
Equipments
|
60000
|
||
|
Outstanding Subscription
|
1000
|
||
|
505000
|
505000
|
|
Receipts
|
Amount
|
Payments
|
Amount
|
|
To balance b/d
|
By Salaries
|
55000
|
|
|
Cash in Hand
|
3000
|
By Medicines
|
26000
|
|
Cash at Bank
|
6000
|
By Equipment purchased
|
10000
|
|
To Subscription
[Includes Rs. 1000 received for previous year]
|
65000
|
By General Expenses
|
4300
|
|
To Sale of Old Furniture
[Book value Rs. 15000]
|
10000
|
By Balance c/d
|
|
|
To Donations (Revenue)
|
22000
|
Cash in Hand
|
7700
|
|
To Life Membership Fees
|
12500
|
Cash at Bank
|
15500
|
|
118500
|
118500
|
| Trial Balance as on 31st March 2013 | |||
|
Debit Balances
|
Amount
|
Credit Balances
|
Amount
|
|
Salary and Wages
|
17000
|
Sales
|
110000
|
|
Postage and Telegram
|
1750
|
Sundry Creditors
|
72700
|
|
Opening Stock
|
23500
|
Bills Payable
|
40000
|
|
Plant and Machinery
|
70000
|
10% Bank Loan
[Taken on 1st October 2012]
|
60000
|
|
Import Duty
|
3100
|
Outstanding Audit Fees
|
5900
|
|
Purchases
|
98500
|
Capital Accounts:
|
|
|
Sundry Debtors
|
45800
|
Vishal
|
45000
|
|
Bills Receivable
|
16700
|
Vaibhav
|
45000
|
|
Carriage Outward
|
1800
|
||
|
Wages and Salary
|
14000
|
||
|
Printing and Stationery
|
4600
|
||
|
Cash in hand
|
1850
|
||
|
Leasehold premises
|
80000
|
||
|
378600
|
378600
|
||
