Question

From the following Receipts and Payment Account and additional information, prepare Income and Expenditure Account and Balance Sheet of Sears Club, Noida as on March 31, 2018.

Receipts and Payment Account of Sears Club for the year ended 31-3-2018

Receipts	Amount (₹)	Payments	Amount (₹)
To Balance b/d	20,000	By Stationery	23,400
To Subscriptions		By 12% Investments	8,000
2016-17 - 40,000		By Electricity expenses	10,600
2017-18 - 94,000		By Expenses on lectures	30,000
2018-19 - 7,200	141,200	By Sports equipment	59,000
To Donations for building	40,000	By Books	40,000
To Interest on Investments	800	By Balance c/d	50,000
To Government Grant	17,400
To Sale of old furniture
(Book value ₹ 4,000)	1,600
	2,21,000		2,21,000

Additional Information:
(i) The club has 200 members each paying an annual subscription of ₹ 1,000. ₹ 60,000 were in arrears for last year and 25 members paid in advance in the last year for the current year.

(ii) Stock of stationery on 1-4-2017 was ₹ 3,000 and on 31-3-2018 was ₹ 4,000.

Answer 1

Income and Expenditure Account

Particulars	Amount(₹)	Particulars	Amount(₹)
To Loss on Sale of Old Furniture (4,000 – 1,600)	2,400	By Subscriptions (200 × 1,000)	2,00,000
To Stationery Consumed:		By Interest on Investments -800
Add: Purchases -       23,400		Add: Accrued Interest - 160	960
Opening Stock -        3,000		By Government Aid	17,400
26,400
Less: Closing Stock - (4,000)	22,400
To Electricity Expenses	10,600
To Expenses on lectures	30,000
To Excess of Income over Expenditure (i.e. Surplus)	1,52,960
	2,18,360		2,18,360

Balance Sheet as on 31^st March 2018

Liabilities	Amount(₹)	Assets	Amount(₹)
Subscriptions in Advance	7,200	Cash in hand	50,000
Donations for Building	40,000	Stationery	4,000
Capital Fund - 62,000		Sports Equipment	59,000
Add: Surplus for the year - 1,52,960	2,14,960	Books	40,000
		12% Investments	8,000
		Subscriptions in the Arrears (WN)	1,01,000
		Accrued Interest on investments	160
	2,62,160		2,62,160

Balance Sheet as on 1^st April 2017

Liabilities	Amount(₹)	Assets	Amount(₹)
Subscriptions in Advance	25,000	Cash in hand	20,000
(25 × 1,000)
Capital Fund (Balancing Figure)	62,000	Subscriptions in Arrear	60,000
		Stationery	3,000
		Furniture	4,000
	87,000		87,000

Working Note:

Computation of subscriptions in arrears at the end of year

Particulars	Amount (₹)
Subscriptions due for the year ( 200 × 1,000)	2,00,000
Less: Subscriptions received during the year	(94,000)
Less: Subscriptions received during the last year	(25,000)
Subscription in arrears for 2017-18	81,000
Add: Subscriptions still in arrears for 2016-17 (60,000 – 40,000)	20,000
	1,01,000