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 | ||
|
|
|
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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 |
|
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* 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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