Advertisements
Advertisements
Question
As at March 31, 2017 the following balances have been extracted from the books of the Indian Chartered Accountants Recreation Club and you are asked to prepare (1) Trading Account for ascertaining gross profit derived from running restaurant and dining room and (2) Income and Expenditure Account for the year ended March 31, 2017 (3) and a Balance Sheet as at that date.
| Debit Balances | Rs |
Credit Balances |
Rs |
| Stock-in-hand | 1170 | Receipts Dining Room | 87660 |
| Purchases | 24660 | Subscriptions | 9450 |
| Dining Room | 32370 | Billiard's Receipts | 7300 |
| Rent | 10470 | Sunday Receipts | 410 |
| Wages | 18690 | Interest on Fixed Deposit | 270 |
| Repairs and Renewals | 5400 | Sundry Creditors | 5310 |
| Fuel and Light | 5280 | Grant from Institute (permanent) | 42000 |
| Misc. Expenses | 4050 | Income and Exp. A/c (1.4.16) | 1380 |
| Cash in hand | 560 | Suspense A/c (See note) | 60 |
| Cash at bank | 2760 | ||
| Fixed Deposit | 8500 | ||
| Sundry Debtors | 2250 | ||
| China glass, cutlery and linen | 600 | ||
| Billiard Table | 2070 | ||
| Fixtures and Fittings | 870 | ||
| Furniture | 4140 | ||
| Club Premises | 30000 | ||
| 1,53,840 | 1,53,840 |
On March 31, 2016 stock of restaurant consisted of Rs 900 and Rs 60 respectively. Provide depreciations Rs 60 on fixtures and fittings, Rs 390 on billiard table and Rs 560 on furniture.
Solution
Important Note:
1. Credit side of the Trial Balance of the question is short by Rs 60. Thus, in order to tally both sides of the Trial Balance, Suspense Account will be opened with the difference amount of Rs 60.
2. Inthe adjustment, Closing Stock should be Rs 960 instead of Rs 900.
Books of Indian Chartered Accountants Recreation Club
Restaurant Trading Account
Dr. Cr.
| Particulars |
Amount |
Particulars | Amount (Rs) |
| Opening Stock | 1170 | Receipts from Dining Room | 87,660 |
| Purchases | 24660 | Closing Stock | 960 |
| Dining Room Exp. | 32370 | ||
| Profit from Restaurant | 30420 | ||
| 88620 | 88620 |
Income and Expenditure Account
as on March 31, 2017
Dr. Cr.
| Expenditure | Amount (Rs) | Income | Amount (Rs) | |
| Rent | 10470 | Subscriptions | 9450 | |
| Wages | 18690 | Sundry Receipts | 410 | |
| Repairs an Renewals | 5400 | Interest on Fixed Deposits | 270 | |
| Fuel and Light | 5280 | Profit from Restaurant | 30420 | |
| Misc. Expenses | 4050 | Billiards Receipts | 7300 | |
| Depreciation on | ||||
| Fixtures and Fittings | 60 | 1010 | ||
| Billiards Table | 390 | |||
| Furniture | 560 | |||
| Surplus (Excess of Income over Expenditure) | 2950 | |||
| 47850 | 47850 | |||
Balance Sheet
as on March 31, 2017
| Liabilities | Amount (Rs) | Assets |
Amount (Rs) | ||
| Sundry Creditors | 5310 | Cash in Hand | 560 | ||
| Grant from Institute | 42000 | Cash at Bank | 2760 | ||
| Suspense | 60 | Fixed Deposit | 8500 | ||
|
Capital Fund (Income and Exp. A/c as on Apr.01, 2016) |
1380 | 4330 | Sundry Debtors | 2250 | |
| Add: Surplus | 2950 | China Glass, Cutlery and Linen | 600 | ||
| Billiards Table | 2070 | 1680 | |||
|
Less: Depreciation |
(390) | ||||
|
Fixture and Fittings |
870 | 810 | |||
|
Less: Depreciation |
(60) | ||||
| Furniture | 4140 | 3580 | |||
| Less: Depreciation | (560) | ||||
| Club Premises | 30000 | ||||
| Stock of Restaurant | 960 | ||||
| 51700 | 51700 | ||||
APPEARS IN
RELATED QUESTIONS
“Income and Expenditure Account of a Not-for-Profit Organisation is akin to Profit and Loss Account of a business concern”. Explain the statement.
From the following receipts and payments and information given below, Prepare Income and Expenditure Account and opening Balance Sheet of Adult Literacy Organisation as on December 31, 2017.
Receipt and Payment Account for the year ending
as on December 31, 2017
| Receipts | Amount (Rs) | Payments | Amount (Rs) | |
| Balance b/d | General Expenses | 3,200 | ||
| Cash in hand | 4000 | News paper | 1850 | |
| Cash at Bank | 15550 | Electricity | 3000 | |
| Subscriptions | Fixed deposit with bank (on 31.06.2017) @ 10% p.a. |
18000 | ||
| 2016 | 1200 | 28200 | Books | 7000 |
| 2017 | 26500 | Salary | 3600 | |
| 2018 | 500 | Rent | 6500 | |
| Sale of old newspapers | 1250 | Postage charges | 300 | |
| Govt. grant | 12000 | Furniture (purchased) | 10500 | |
| Sale of old furniture (book value Rs 5, 000) | 3700 | Balance c/d | ||
| Interest received on FD | 450 | Cash in Hand | 3000 | |
| Cash at Bank | 8200 | |||
| 65150 | 65150 | |||
Information:
- Subscription outstanding as on 31.12. 2016 Rs 2,000 and on December 31, 2017 Rs 1,500.
- On December 31, 2017 Salary outstanding Rs 600, and one month rent paid in advance.
- On Jan. 01, 2016 organization owned Furniture Rs 12,000, Books Rs 5,000.
From the following Receipt and Payment Account of Jan Kalyan Club, prepare Income and Expenditure Account and Balance Sheet for the year ending March 31, 2017.
| Dr. | Receipt and Payment Account for the year ending March 31, 2017 |
Cr. | |
| Receipts | Amount (Rs) | Payments | Amount (Rs) |
| Cash in hand as on 1.4.16 | 6,800 | Salaries | 24,000 |
| Subscription | 60,200 | Traveling Expenses | 6,000 |
| Donation | 3,000 | Stationery | 2,300 |
| Sale of furniture (Book value Rs 6,000) | 4,000 | Rent | 16,000 |
| Entrance fee | 800 | Repair | 700 |
| Life membership fee | 7,000 | Books purchased | 6,000 |
| Interest on investment (@ 5% for full year) | 5,000 | Building purchased | 30,000 |
| Cash in hand as 31.3.2017 | 1,800 | ||
| 86800 | 86800 | ||
Additional Information:
|
As on |
As on |
||
| i) | Subscription received in advance | 1,000 | 3,200 |
| ii) | Outstanding subscription |
2,000 |
3,700 |
| iii) | Stock of stationery | 1,200 | 800 |
| iv) | Books | 13,500 | 16,500 |
| v) | Furniture |
16,000 |
8,000 |
| vi) | Outstanding rent | 1,000 | 2,000 |
How are the following dealt with while preparing the final accounts for the year ended 31st March, 2019?
|
RECEIPTS AND PAYMENTS ACCOUNT (AN EXTRACT) |
||||
|
Dr. |
|
Cr. | ||
| Receipts | ₹ |
Payments |
₹ | |
|
|
By Payments for Medicines | 1,50,000 | ||
Additional information :
| As at 1st April, 2018 (₹) |
As at 31st March, 2019 (₹) |
|
| Stock of Medicines | 50,000 | 75,000 |
| Creditors for Medicines | 40,000 | 60,000 |
Prepare Income and Expenditure Account for the year ended 31st March, 2019 from the following
|
RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31st March, 2019 |
|||||
| Dr. | Cr. | ||||
| Receipts | ₹ | Payments | ₹ | ||
| 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 ₹ 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 | ||||
Prepare Income and Expenditure Account from the following Receipts and Payments Account of Delhi Nursing Society for the year ended 31st March, 2019
| Dr. | Receipts and Payment Account for the year ended 31st March, 2019 |
Cr. | |||
| Receipts | Amount (₹) | Payments | Amount (₹) | ||
| To Balanceb/d (Cash at Bank) |
2,01,000 | By Salaries of Nurses | 65,600 | ||
| To Sunscriptions | 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 ₹ 10,000 received for Building Fund was wrongly included in the Subscriptions Account. A bill of medicines purchased during the year amounted to ₹12,800 was outstanding. Government Grant is not for a specific purpose.
From the given Receipts and Payments Account and additional information of Shine Club for the year ended 31st March 2019, prepare Income and Expenditure Account for the year ended 31st March 2019.
Receipts and Payments Account of Shine Club for the year ended 31st March, 2019
| Receipts |
Amount (₹) |
Payments |
Amount (₹) |
| To balance b/d |
50,000 |
By Furniture & equipments |
1,22,000 |
| To donations |
45,000 |
By Salaries |
32,000 |
| To subscriptions : |
|
By balance c/d |
13,400 |
| 2017-18 - 1,600 |
|
|
|
| 2018-19 - 60,000 |
|
|
|
| 2019-20 - 5,000 |
66,600 |
|
|
| To interest received |
5,800 |
|
|
|
1,67,400 |
1,67,400 |
Additional Information :
(i) Furniture and equipments were purchased on 1-10-2018. Depreciation @ 10% p.a. was to be provided on furniture and equipments.
(ii) Subscriptions in arrears for the year 2018-19 were ₹ 2,000
(iii) Outstanding salary ₹ 6,000.
How will the following items be treated while preparing the financial statements of a not-for-profit organization for the year ended 31st March, 2019?
| As at 31-3-2018 (₹) | As at 31-3-2019 (₹) | |
| Creditors for medicines | 33,000 | 67,000 |
| Stock of medicines | 27,000 | 43,000 |
During 2018-19, the payment made to the creditors was ₹ 4,25,000.
What are the significant sources of income for not-for-profit-organization?
Credit side balance in the Income and Expenditure Account reveals:
If there is no 'Match Fund', then match expenses are transferred to:
Subscriptions received in cash during the year amounted to ₹ 40,000; subscription outstanding at the end of the previous year was ₹ 1,500 and outstanding at the end of the current year was ₹ 2,000. Subscription received in advance for next year was ₹ 800. The amount credited to the Income and Expenditure Account will be:
The following is the extract of the Receipts and Payments Account of the Rajasthan Society for the year ending 31st December 2021.
| Receipts | Amount (₹) |
Payments | Amount (₹) |
| By medicine | 18,000 |
A bill of medicine purchased during the year amounting to ₹ 2,000 was outstanding. The amount debited to the Income and Expenditure Account will be:
Subscription Outstanding at the beginning of the current year will be:
From the following which item is not entered in the Income and Expenditure Account?
Locker's rent amount received by a school is treated as:
From the following information, calculate the amount of stationery to be shown in Income and Expenditure Account for the year ended 31st March, 2021:
| Particulars | 1st April, 2020 (₹) |
31st March, 2021 (₹) |
| Creditors for Stationery | 5,600 | 12,800 |
| Stock of Stationery | 25,000 | 35,000 |
During the year ended 31st March, 2021 payments made to creditors amounted to ₹ 62,800. Stationery purchased during the year was ₹ 2,00,000.
From the following information obtained from the books of 'Murlidhar Charitable Hospital', calculate the amount of medicines to be debited to the Income and Expenditure Account of the hospital for the year ended 31.03.2022.
| Particulars | 31.3.2021 Amount (₹) |
31.3.2022 Amount (₹) |
| Stock of medicines | 1,70,000 | 3,75,000 |
| Creditors for medicines | 5,40,000 | 8,25,000 |
During the year ₹ 11,49,000 were paid to the Creditors for medicines. Medicines of ₹ 3,30,000 were purchased in cash for emergency use.
