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Question
How is Entrance Fees dealt with while preparing the final accounts for the year ended 31st March, 2019 in each of the following alternative cases?
Case I During the year ended 31st March, 2019, Entrance Fees received was ₹ 1,00,000.
Case II During the year ended 31st March, 2019, Entrance Fees received was ₹ 1,00,000.Out of this, ₹ 25,000 was received from individuals whose membership is not yet approved.
Solution
Case 1
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Income and Expenditure Account for the year ended March 31, 2019 |
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Dr. |
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Cr. |
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Expenditure |
Amount (₹) |
Income |
Amount (₹) |
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|
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Entrance Fees |
1,00,000 |
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Case 2
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Income and Expenditure Account for the year ended March 31, 2019 |
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|
Dr. |
|
Cr. |
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Expenditure |
Amount (₹) |
Income |
Amount (₹) |
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|
|
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Entrance Fees |
75,000 |
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|
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(1,00,000 – 25,000) |
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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.
Prepare Income and Expenditure Account and Balance Sheet for the year ended December 31, 2016 from the following Receipt and Payment Account and Balance Sheet of culture club:
Receipt and Payment Account
for the year ending March 31, 2016
| Receipts | Amount (Rs) | Payments | Amount (Rs) | |
| Opening cash balance | 12000 | Furniture | 4,000 | |
| Subscription | Telephone expenses | 800 | ||
| 2014-2015 | 2,000 | 24,000 | Salary | |
| 2015-2016 |
22,000 |
2014-2015 | 1000 | |
| Entrance fees | 2,800 | 2015-2016 | 4000 | |
| Locker rent | 1000 | Newspapers | 700 | |
| Life membership fee | 1200 | Sundry expenses | 1,000 | |
| Government grant | 11,000 | Defence bonds | 18,000 | |
| Land | 20,000 | |||
| Closing cash balance | 2,500 | |||
| 52000 | 52,000 | |||
Balance Sheet
for the year ending March 31, 2015
| Liabilities | Amount (Rs) | Assets | Amount (Rs) |
| Advance locker rent |
200 |
Cash in hand | 12,000 |
| Subscription Received in |
1,000 |
Outstanding Expenses | 3,000 |
| Advance Outstanding salary | 2,000 | Building | 35,000 |
| Loan | 10,000 | ||
| Capital fund |
36,800 |
||
| 50000 | 50000 |
How are the following items of subscriptions shown in the Income and Expenditure Account for the year ended 31st March, 2019 and Balance Sheets as at 31st March, 2018 and 2019?
| ₹ | |
| Subscriptions received during the year ended 31st March, 2019 | 358,500 |
| Subscriptions outstanding on 31st March, 2018 | 30,000 |
| Subscriptions received in Advance on 31st March, 2018 | 22,500 |
| Subscriptions received in Advance on 31st March, 2019 | 13,500 |
| Subscriptions outstanding on 31st March, 2019 | 37,500 |
| (including ₹ 12,500 for the year ended 31st March, 2018) |
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 |
How are the following dealt with while preparing the final accounts of a sports club for the year ended 31st March, 2019?
RECEIPTS AND PAYMENTS ACCOUNT
for the year ended 31st March, 2019
| Dr. | Cr. | |||
|
Receipts |
₹ | Payments | ₹ | |
| To Sale of Sports Materials | 26,000 | By Creditors for Sports Materials | 61,000 | |
| (Book value ₹ 20,000) | By Cash purchase of Sports Materials | 10,000 | ||
Additional information :
| As at 31st March, 2018 (₹) |
As at 31st March, 2019 (₹) |
|
| Sports Materials | 20,000 | 25,000 |
| Creditors for Sports Materials | 7,000 | 15,000 |
Arrange the Steps in Ascending order in the preparation of the income and Expenditure Account?
- Pursue the Receipt and Payment Account thoroughly.
- Exclude the opening and closing balances of cash and bank as they are not an income.
- Consider the following items not appearing in the Receipt and Payment Account that need to be taken into account for determining the surplus I deficit for the current year: (1) Depreciation affixed assets. (2) Provision for doubtful debts, if required. (3) Profit or loss on sale of affixed assets.
- Consider only the revenue receipts to be shown on the income side of the Income and Expenditure Account. Some of these need to be adjusted by excluding the amounts relating to the preceding and the succeeding periods and including the amounts relating to the current year not yet received.
- Take the revenue expenses to the expenditure side of the Income and Expenditure Account with due adjustments as per the additional information provided relating to the amounts received in advance and those not yet received.
- Exclude the capital receipts and capital payments as these are to be shown in the Balance Sheet.
What is the nature of the Income and expenditure Account?
Credit side balance in the Income and Expenditure Account reveals:
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:
Subscriptions received in cash during the year amount to ₹ 50,000, the amount received in advance for the next year is ₹ 5,000, and the amount outstanding for the current year was ₹ 5,000. The amount to be debited to the Income and Expenditure Account is:
If there is a 'Match Fund', then match expenses and incomes are transferred to ______
Receipts and payments account is prepared with the help of:
Locker's rent amount received by a school is treated as:
Ledger Folio columns are shown by:
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.
