Question

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 Rs.		Payments	Amount Rs.
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.

Answer 1

In the books of Kalpana Hospital, Sakri
Income and Expenditure Account  for the year ending March 31,2010
Dr.				Cr.
Expenditure	Amount (Rs)	Income		Amount (Rs)
Outstanding Staff  Salary	7,500	Subscription	95,000
Medicines	10,000	Add: Outstanding at the end	5,000	1,00,000
Honorarium to Doctors	75,000	Hospital Receipts		1,50,000
Ambulance Maintenance	44,000
Depreciation on Hospital Equipment	3,000
Depreciation on Furniture	2,500
Surplus (Excess of Income over Expenditure)	1,08,000
	2,50,000			2,50,000

 

Balance Sheet as on March 31, 2010
Liabilities		Amount (Rs)	Assets			Amount (Rs)
Capital Fund	2,16,000		Land			2,50,000
Add: Life Membership Fees	25,000		Hospital Equipment		30,000
Add: Surplus	1,08,000	3,49,000	Less: Depreciation @ 20% (6 months)		3,000	27,000
Donation for Building Fund		55,000	Furniture	25,000
Salaries Outstanding		7,500	Less: Depreciation @ 20% (6 months)		2,500	22,500
Bank Loan		2,00,000	Investments			50,000
Advance Subscription		15,000	Ambulance			1,02,500
			Fixed Deposits			1,00,000
			Bank			69,500
			Outstanding Subscription			5,000
		6,26,500				6,26,50

Working Notes:

WN1 Calculation of Depreciation

\[\text{On Hospital Equipment} = 30,000 \times\frac{20}{100}\times\frac{6}{12}= Rs 3,000\]

\[\text{On Furniture} = 25,000 \times\frac{20}{100}\times\frac{6}{12}= Rs 2,500\]