Question

Given below is the Receipts and Payments Account of “Vithai Mahila Mandal” Pandharpur for the year ending 31.03.2018. Prepare an Income and Expenditure Account for the year ended 31.03.2018 and Balance Sheet as on that date.

Dr	Receipts and Payments Account for the year ending 31.03.2018.						Cr
Receipts		Amount ₹	Amount ₹	Payments	Amount ₹	Amount ₹
To Balance b/d				By Stationery		6000
Cash in Hand		3,000		By Repairs to Furniture		950
Cash at Bank		20,000	23,000	By Rent		8,300
To Entrance Fees			3,500	By Salaries		15,000
To Subscription			19,000	By Miscellaneous Expenses		450
To Miscellaneous Receipts			850	By Balance c/d
				Cash in Hand	1,650
				Cash at Bank	14,000	15,650
			46,350			46,350

Adjustments :

1) Capital Fund on 01.04.2017 was ₹ 90,000

2) Outstanding Subscription ₹ 4,000

3) Entrance Fees are to be capitalized

4) Rent paid includes ₹ 800 paid for April 2018

5) They have the following Assets and Liabilities 01.04.2017

Furniture ₹ 9,000,

Building ₹ 70,000, 

Outstanding Expenses ₹ 12,000

Answer 1

Dr	In the books of Vithai Mahila Mandal, Pandharpur Income and Expenditure Account for the year ended 31st March 2018						Cr
Expenditure		Amount ₹	Amount ₹	Income	Amount ₹	Amount ₹
To Stationery			6,000	By Subscription	19,000
To Repairs to Furniture			950	Add: Outstanding Subscription	4,000	23,000
To Rent		8,300		By Miscellaneous receipts		850
Less: Prepaid Rent		800	7,500	By Deficit (Excess of expenses over incomes)		6,050
To Salaries			15,000
To Miscellaneous Expense			450
			29,900			29,900

 

Balance Sheet as on 31st March 2018
Liabilities		Amount ₹	Amount ₹	Assets	Amount ₹	Amount ₹
Capital Fund		90,000		Furniture		9,000
Add: Entrance Fees (Capitalised)		3,500		Building		70,000
Less: Deficit		6,050	87,450	Outstanding Subscription		4,000
Outstanding Expenses			12,000	Cash in Hand		1,650
				Cash at Bank		14,000
				Prepaid rent		800
			99,450			99,450

Working Notes :

(1) Outstanding subscription of ₹ 4,000 is first added to subscription received on the credit side of Income and Expenditure A/c and then it is shown on the Assets side of the Balance Sheet.

(2) The entire amount of the entrance fees ₹ 3,500 is added to the capital fund.

(3) Prepaid ₹ 800 is first deducted from rent paid on the debit side of Income & Expenditure A/c and then shown on the Assets side of the Balance Sheet.

(4) Outstanding expenses ₹ 12,000 is directly shown on the Liabilities side of the Balance Sheet.