following is the receipt and payment account of natraj literary society hyderabad for the year ended 31st december 1998 :

receiptsRs payments Rs

to balance b/d 1-1-19987200By salaries 16,500

To Donations8000 By sundry expenses 1,000

To rent of the hall 15,400 By charities 1,500

To proceeds of lectures 4,700 By cost of lectures 3,000

To Interest on bonds 900 By newspapers 3,800

To journey receipts 5,600By journey Expenses 4,400

To sale of old newspaper 300 By Books 14,000

To sale of old furniture (book value rs 2,000) 400 By mowing machine (purchased on 1-4-1998) 10,000

To subscriptions : By furniture 7,000

1997 1,500 By postsge400

1998 38,000 By conveyance 800

1999 80040,300 By balance c/d 20,400

Additional Information : -

(1) there are 40 members each paying an annual subscription of 100 .

(2) on 31 st december 1997 the trustowned buildingsrs 75,500; furniture rs 10,000 ; books rs 6,000 and 12% bonds rs 10,000 .

(3) salaries of rs 1,500 for december 1998 were not paid until 7th january , 1999 .

(4) journey income receivable Rs 400 .

(5) charge depreciation @ 10% p.a. on buildings and mowing machine and 20% p.a. on the closing balance of furniture and books .

(6) it was decided to treat one - half of the amountreceived on account of donations as income.

prepare income and expenditure avvount for the year ending 31st dec., 1998and a balance sheet on that date .

Hints:- (1) Salary of rs 1,500 will be treated as outstanding .

(2) half the donations will be shown on the liabilities side .

(3) subscription outstanding rs 2,000 .

Income and Expenditure account

for the year ended March 31,1998

Dr.

 

 

Cr.

Expenditure

Amount

(Rs)

Income

Amount

(Rs)

Sundry Expenses

1,000

Subscription (40 members × Rs 1,000*)

40,000

Charities

1,500

Donation

4,000

Salaries

16,500

 

Rent of Hall

15,400

Add: Outstanding Salaries

1,500

18,000

Interest on Bonds

900

 

Conveyance

800

Add: Accrued Interest

300

1,200

Postage

400

Journey Receipt

5,600

 

Depreciation on:

 

Less: Journey Expenses

(4,400)

 

Building

7,550

 

Add: Journey Income Receivable

400

1,600

Books

4,000

 

Proceeds of Lectures

4,700

 

Mowing Machine (for 9 months)

750

 

Less: Cost of Lectures

(3,000)

1,700

Furniture

3,000

15,300

Sale of Old Newspapers

300

Loss on Sale of Furniture (2,000 – 400)

1,600

 

 

Newspapers

3,800

 

 

Surplus (Balancing Figure)

21,800

 

 

 

52,360

 

64,200

 

 

 

 

 

Balance Sheet

as on December 31,1998

Liabilities

Amount

(Rs)

Assets

Amount

(Rs)

Salary Outstanding

1,500

Cash

20,400

Subscription Received in Advance

800

Subscription Outstanding (WN1)

2,000

Donation

4,000

Journey Income Receivable

400

Capital Fund

1,10,200

 

Building

75,500

 

Add: Surplus

21,800

1,32,000

Less: Depreciation

(7,550)

67,950

 

 

Books

6,000

 

 

 

Add: Purchases

14,000

 

 

 

 

20,000

 

 

 

Less: Depreciation

(4,000)

16,000

 

 

Furniture

10,000

 

 

 

Add: Purchases

7,000

 

 

 

Less: Sales

(2,000)

 

 

 

 

15,000

 

 

 

Less: Depreciation

(3,000)

12,000

 

 

Mowing Machine

10,000

 

 

 

Less: Depreciation

(750)

9,250

 

 

Investments in 12% Bonds

10,000

 

 

 

Add: Accrued Interest

300

10,300

 

1,38,300

 

 

1,38,300

 

 

 

 

 

Balance Sheet

as on December 31, 1997

Liabilities

Amount

(Rs)

Assets

Amount

(Rs)

Capital Fund (Balancing Figure)

1,10,200

Cash

7,200

 

 

Subscription Outstanding

1,500

 

 

Building

75,500

 

 

Books

6,000

 

 

Furniture

10,000

 

 

Investments in 12% Bonds

10,000

 

1,10,200

 

1,10,200

 

 

 

 

* There seems to be typing mistake in the amount of annual subscription in the first additional information. It is assumed to be Rs 1,000 instead of Rs 100. Recheck your question once again and in case of any doubt do get back to us.

Working Note:

WN1Calculation of Subscription Outstanding for the year ending December 31, 1998

Particulars

Amount 

(Rs)

Subscription Due for the year 1998 (40 members × Rs 1,000)

40,000

Less: Received during year 1998

(38,000)

Subscription Outstanding for the year 2009

2,000

 

 

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