Question

Following is the Receipts and Payments Account of "Satara Sports Club". Prepare Income and Expenditure Account for the year ending 31 - 03 - 2022. Also prepare Balance sheet as on 31 -03-2022.

Dr.	Receipts and Payments Account for the year ending 31 - 03 - 2022				Cr.
Receipts	Amount (₹)	Amount (₹)	Payments	Amount (₹)	Amount (₹)
To Balance b/d			By Salaries		10,000
Cash in Hand	9,000	33,000	By Rent (Including ₹ 4,000 for 2020-21)		10,00
Cash at Bank	24,000		By Electricity Charges		2,900
To Subscription			By Fixed Deposit		1,20,000
2020 - 21	8,000	1,04,000	By Printing and Stationery		1,500
2021 - 22	89,000		By General Expenses (Including ₹ 1000 paid for next year)		11,000
2022 - 23	7,000		By Sports Material
To Entrance Fees		16,000	Purchased		80,000
To Donation for			By Balance c/d
Building Fund		1,40,000	Cash in Hand	17,800	67,800
To Interest		1,200	Cash at Bank	50,000
To Sale of Furniture (Book Value ₹ 16,000)		9,000
		3,03,200			3,03,200

Adjustments:

(1) Outstanding subscription for current year is ₹ 9,000.

(2) Outstanding rent for current year amounted to ₹ 2,000.

(3) Entrance Fees are to be treated as Revenue Income.

(4) Stock of sports material as on 01 - 04 - 2021 ₹ 12,000 and on 31 - 03 - 2022 ₹ 28,000.

Answer 1

Dr.	In the books of ‘Sports Club’ Income and Expenditure Account for the year ended on 31st March, 2022				Cr.
Expenditure	Amount (₹)	Amount (₹)	Income	Amount (₹)	Amount (₹)
To Salaries		10,000	By Subscription Received for 2021 – 22	89,000	98,000
To Rent	10,000	8,000	Add : Outstanding Subscription for Current Year	9,000
Add: Outstanding Ren of Current Year	2,000		By Entrance Fees		16,000
Less: Rent Received for the Year 2020 – 21	4,000		By Interest		1,200
To Electricity Charges		2,900
To Printing and Stationery		1,500
To General Expense	11,000	10,000
Less: Amount Paid for Next Year	1,000
To Sports Material Consumed
Opening Stock	12,000	64,000
Add: Sports Material Purchased in Current Year	80,000
	92,000
Less: Closing Stock of Sports Material	28,000
To Loss due to Sale of Furniture (16,000 – 9,000)		7,000
To Surplus (Excess of income over expenditure)		11,800
		1,15,200			1,15,200

Working Notes:

(1) Entrance fees is to be treated as Revenue income. Therefore, entire amount is recorded on income side.

(2) Since selling price of Furniture ₹ 9,000 is lower than its cost price of ₹ 16,000, there is Loss on sale of furniture. It is calculated as follows :

Loss on sale of furniture = Book value (cost) – Selling price = 16,000 – 9,000 =  ₹ 7,000 It is debited to Income and Expenditure A/c.

Balance Sheet of ‘Sports Club’ as on 31st March, 2021 (Opening Balance Sheet)
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
O/s Rent		4,000	Cash in hand	9,000	33,000
Capital Fund (Opening balance) (Difference of amount)		65,000	Cash at bank	24,000
			Stock of
			Sports material		12,000
			O/s subscription		8,000
			Furniture		16,000
		69,000			69,000

 

Balance Sheet of ‘Sports Club’ as on 31st March, 2022 (Opening Balance Sheet)
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Capital Fund:			O/s subscription		9,000
Opening balance	65,000	76,800	Stock of sports material		28,000
Surplus	11,800		Fixed deposit		1,20,000
O/s Rent		2,000	Prepaid general expenses		1,000
Building fund			Cash in hand	17,800	67,800
– Donation received		1,40,000	Cash at bank	50,000
Pre-received subs.		7,000
		2,25,800			2,25,800