Why didn't we considered legacy anywhere in this question?

Dear Student,
If the amount of legacy is greater, then it is normally treated as capital item and shown as liability in the balance sheet, otherwise, it is treated as income and entered in the income and expenditure account.
In the present case, legacy will be considered as income in income and expenditure account as the amount is small, just Rs. 12,500.

The same amount has been correctly shown in the income side income and expenditure account. We are sorry to you that the name is wrongly written as Sale of Old Newspaper. You can check the same, and get back to us in case of further doubts. Sorry for inconvenience caused to you!

Regards

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