NCERT Solutions for Class 11 Commerce Accountancy Chapter 4 Accounting For Not For Profit Organisation are provided here with simple step-by-step explanations. These solutions for Accounting For Not For Profit Organisation are extremely popular among class 11 Commerce students for Accountancy Accounting For Not For Profit Organisation Solutions come handy for quickly completing your homework and preparing for exams. All questions and answers from the NCERT Book of class 11 Commerce Accountancy Chapter 4 are provided here for you for free. You will also love the ad-free experience on Meritnation’s NCERT Solutions. All NCERT Solutions for class 11 Commerce Accountancy are prepared by experts and are 100% accurate.

Page No 474:

Question 1:

State the meaning of 'Not-for-Profit' Organisations.

Answer:

Not-for-Profit Organisations (NPO) are set up with the prime objective of providing services and not to earn profit thereby enhancing the welfare of society. Such organisations include schools, hospitals, trade unions, religious organisations, etc. The person/s or the groups of individuals who govern and manage the working of an NPO are known as trustees. NPO's main sources of income are donations, subscriptions, life membership fees, grants etc. As these organisations are not set up with profit motive, they do not prepare Trading and Profit and Loss Account. Instead, they maintain Receipt and Payments Account, Income and Expenditure Account and Balance Sheet. 

Page No 474:

Question 2:

State the meaning of Receipt and Payment Account.

Answer:

Receipts and Payments Account is a summary of the Cash Book. All cash receipts are recorded on the Receipts side (i.e. Debit side) and all cash payments are recorded on the Payments side (i.e. Credit side) of Receipts and Payments Account. It is prepared on the basis of cash and bank transactions recorded in the Cash Book. It begins with the opening balance of cash and bank and ends with the closing balances of cash and bank (balancing figure) at the end of the accounting period. It records all cash and bank transactions both of capital and revenue nature. It not only records the cash and bank transactions relating to the current accounting period, but also the cash and bank receipts (or payments) received during the current accounting period that may be related to the previous or next accounting period.

This account only helps us to ascertain the closing balance of the cash and bank and helps in assessing the cash position of an NPO.

Page No 474:

Question 3:

State the meaning of Income and Expenditure Account.

Answer:

Income and Expenditure Account (I&E) is similar to the Profit and Loss Account in the sense that while the former is prepared to ascertain surplus or deficit during an accounting period, the latter is prepared to ascertain net profit or net loss incurred during an accounting period. I&E Account is a nominal account and is prepared on the accrual basis. It records all transactions of revenue nature that are related to the current accounting period (whether outstanding or prepaid) for which the books are maintained. All expenses and losses are recorded on the debit side (Expenditure side) and all income and gains are recorded on the credit side (Income side) of I&E Account. The closing balance or the balancing figure of I&E Account is termed as surplus (or deficit), if the sum total of the Income side exceeds (is lesser than) the sum total of the Expenditure side.

Page No 474:

Question 4:

What are the features of Receipt and Payment Account?

Answer:

The following are the features of Receipt and Payment Account:

1. Nature: It is a Real Account. It is a summarised version of Cash Book.

2. Nature of Transactions: It records only cash and bank transactions. Transactions other than cash and bank like depreciation, loss/ profit on sale of assets, etc. are not recorded in this account.

3. No distinction between Capital and Revenue items: It records all cash and bank receipts and payments of both capital and revenue nature.

4. Opening and closing balance: It begins with the opening balance of cash and bank and ends with the closing balance of the cash and bank (balancing figure) at the end of the accounting period.

5. Purpose: It reveals the cash position of an organisation. It helps to ascertain the total amount paid and received during an accounting period.

Page No 474:

Question 5:

What steps are taken to prepare Income and Expenditure Account from a Receipt and Payment Account?

Answer:

The following steps are taken to prepare Income and Expenditure Account (I&E) from Receipts and Payment Account (R&P).

Step 1: All the revenue expenditures paid for the current accounting period are transferred from the Payments side of R&P to the Expenditure side of I&E.

Step 2: All the revenue receipts for the current accounting period are transferred from the Receipts side of R&P to the Income side of I&E.

Step 3: Expenses outstanding for the current period and expenses paid in advance (prepaid expenses) for the current period in the preceding accounting periods are to be added (adjusted) to their related expenses in the Step 1.

Step 4: Income outstanding (accrued income) for the current period and income received in advance for the current period in the preceding accounting periods are to be added (adjusted) to their related incomes in Step 2.

Step 5: Non-cash items like depreciation, appreciation for the current accounting period are to be adjusted in the I&E.

Step 6: After adjusting all the revenue items for the current accounting period, the Income and the Expenditure sides are totaled. If the sum total of the Income side exceeds (or is lesser than) the sum total of the Expenditure side, then the balancing figure is termed as surplus (or deficit).

Page No 474:

Question 6:

What is subscription? How is it calculated?

Answer:

Subscription is the main source of income for an NPO besides entrance fees, donations, grants, etc. Subscriptions refer to the amount of money paid by the members on periodic basis for keeping their membership with the organisation alive. It is paid monthly, quarterly, half yearly or annually by the members.

It is shown in the debit side of the Receipt and Payment Account with the total amount received during the year that may be related to the current period and to the previous and next accounting period.

While calculating subscription for the current period, advance subscription received for the current period in the previous period and outstanding subscription for the current period are added to the subscription received during the current period. Whereas, on the other hand, advance subscription received for the next accounting period during the current period and outstanding subscription for the preceding period are deducted from the subscription received during the current period.

Calculation of Subscription

Subscription received during the year

 

***

Add: Subscription received (in advance) during previous year for current year

***

 

Add: Subscription outstanding at the end of the year

***

 

 

 

***

Less: Subscription received in advance for the next year

***

 

Less: Subscription outstanding for the previous year

***

***

## Subscription shown in Income and Expenditure Account

 

***

## This subscription is related to the current accounting period and is shown in the Income side of the Income and Expenditure Account.

Page No 474:

Question 7:

What is Capital Fund? How is it calculated?

Answer:

Capital fund is the excess of NPOs' assets over its liabilities. In other words, the excess of assets over the liabilities for a profit earning organisation is termed as capital and the same for an NPO is termed as capital fund. Any surplus or deficit ascertained from Income and Expenditure account is added to (deducted from) the capital fund. It is also termed as Accumulated Fund.

Calculation of Capital Fund

Capital Fund at the beginning of the year

 

**

Add: Surplus from Income and Expenditure Account

**

 

Add: Subscription Amount (Capitalised amount)

**

 

Add: Life membership fee.

**

**

Less: Deficit from Income and Expenditure Account

 

**

Capital Fund at the end of the year

 

***

 

Page No 474:

Question 1:

From the following particulars taken from the Cash Book of a health club, prepare a Receipts and Payments Account.

Particulars

Rs

Opening balance:

 

Cash in Hand

5,000

Cash at Bank

25,000

Subscriptions

1,65,000

Donations

35,000

Investment Purchased

80,000

Rent Paid

20,000

General Expenses

21,500

Postage and stationery

2,000

Courier charges

1,000

Sundry Expenses

2,500

Closing Cash in Hand

12,000

 

Answer:

Books of Health Club

Receipt and Payment Account

Dr.

 

Cr.

Receipts

Amount

Rs

Payments

Amount

Rs

Balance b/d

 

Investment

80,000

Cash in Hand

5,000

 

Rent

20,000

Cash at Bank

25,000

30,000

General Expenses

21,500

Subscriptions

1,65,000

Postage and Stationery

2,000

Donations

35,000

Courier Charges

1,000

 

 

Sundry Expenses

2,500

 

 

Balance c/d

 

 

 

Cash in Hand

12,000

 

 

 

Cast at Bank

91,000

1,03,000

 

 

(Balancing figure)

 

 

2,30,000

 

2,30,000

 

 

 

 

               

 

Page No 474:

Question 2:

The Receipt and Payment Account of Harimohan charitable institution is given:

Receipt and Payment Account for the year ending March 31, 2015

Receipts

Amount

Rs

 Payments

Amount

Rs

Balance b/d:

 

Furniture

3,000

Cash at Bank

22,000

Investments

55,000

Cash in Hand

 8,800

Advance for building

20,000

Donations

32,000

Charities

 60,000

Subscriptions

50,200

Salaries

10,400

Endowment Fund

 60,000

Rent and Taxes

4,000

Legacies

24,000

Printing

1,000

Interest on Investment

 3,800

Postage

300

Interest on Deposits

 800

Advertisements

1,100

Sale of old newspapers

500

Insurance

4,800

 

 

Balance c/d:

 

 

 

Cash at Bank

32,000

 

 

Cash in Hand

10,500

 

2,02,100

 

2,02,100

 

 

 

 

Prepare the Income and Expenditure Account for the Year ended on March 31, 2015 after considering the following:

(i)

It was decided to treat Fifty per cent of the amount received on account of Legacies and Donations as income.

(ii)

Liabilities to be provided for are:

 

Rent Rs 800; Salaries Rs 1,200; advertisement Rs 200.

(iii)

Rs 2,000 due for interest on investment was not actually received.

 

Answer:

Books of Harimohan Charitable Institution

Income and Expenditure Account

Dr.

 

Cr.

Expenditure

Amount

Rs

Income

Amount

Rs

Rent and Taxes

4,000

 

Donations

16,000

Add: Outstanding

800

4,800

Legacies

12,000

 

 

Subscriptions

50,200

Salaries

10,400

 

Interest on Investment

3,800

 

 Add: Outstanding

1,200

11,600

Add: Accrued Interest

2,000

5,800

 

 

 

 

Advertisement

1,100

 

Interest on Deposits

800

Add: Outstanding

200

1,300

Sale of Old Newspapers

500

 

 

 

 

Charities

60,000

 

 

Printing

1,000

 

 

Postage

300

 

 

Insurance

4,800

 

 

 

 

 

 

Surplus (Excess of Income over Expenditure)

1,500

 

 

 

 

 

 

 

85,300

 

85,300

 

 

 

 

             

Page No 474:

Question 3:

From the following particulars, prepare Income and Expenditure account:

Details

Amount Rs

Fees collected, including Rs 80,000 on account of the previous year

5,20,000

Fees for the year outstanding

30,000

Salary paid, including Rs 5,000 on account of the previous year

68,000

Salary outstanding at the end of the year

3,000

Entertainment expenses

8,000

Tournament expenses

25,000

Meeting Expenses

18,000

Traveling Expenses

7,000

Purchase of Books and Periodicals, including Rs 31,000 for purchase of Books

40,000

Rent

15,000

Postage, telegrams and telephones

6,000

Printing and Stationery

18,000

Donations received

25,000

 

Answer:

Income and Expenditure Account

Dr.

 

Cr.

Expenditure

Amount

Rs

Income

Amount

Rs

Salaries

68,000

 

Fees Collected

5,20,000

 

Less: Previous year's Outstanding

(5,000)

 

Less: Previous year's Outstanding

(80,000)

 

 

63,000

 

 

4,40,000

 

Add: Current year's Outstanding

3,000

66,000

Add: Current year's Outstanding

30,000

4,70,000

Entertainment Expenses

 

8,000

Donations

25,000

Tournament Expenses

25,000

 

 

Meeting Expenses

18,000

 

 

Traveling Expenses

7,000

 

 

Purchases of Periodicals (40,000 – 31,000)

9,000

 

 

Postage, Telegrams and Telephone’s

6,000

 

 

Rent

15.000

 

 

Printing and Stationery

18,000

 

 

Surplus (Excess of Income over Expenditure)

3,23,000

 

 

 

 

 

 

 

4,95,000

 

4,95,000

 

 

 

 

             

NOTE: As per the solution, Excess of Income over Expenditure is Rs 3,23,000; however, as per the book, it is Rs 3,07,000.

Page No 474:

Question 4:

Following is the information given in respect of certain items of a Sports Club. Show these items in the Income and Expenditure Account and the Balance Sheet of the Club:

Particulars

Rs

Sports Fund as on 1.4.2015

 35,000

Sports Fund Investments

35,000

Interest on Sports Fund

4,000

Donations for Sports Fund

15,000

Sports Prizes awarded

10,000

Expenses on Sports Events

4,000

General Fund

80,000

General Fund Investments

80,000

Interest on General Fund Investments

8,000

 

Answer:

Books of Sports Club

Income and Expenditure Account

Dr.

 

 

Cr.

Expenditure

Amount

Rs

Income

Amount

Rs

 

 

Interest on General Fund Investments

8,000

 

 

 

 

 

Balance Sheet

Liabilities

Amount

Rs

Assets

Amount

Rs

Sports Fund

35,000

 

Sports Fund Investments

35,000

Add: Interest on Sports Fund

4,000

 

General Fund Investments

80,000

Add: Donations for Sports Fund

15,000

 

 

 

 

54,000

 

 

 

Less: Expenses on Sports Event

(4,000)

 

 

 

Less: Prize Awarded

(10,000)

40,000

 

 

General Fund

80,000

 

 

 

 

 

 

 

Page No 474:

Question 5:

How will you deal with the following items while preparing for the Bombay Women Cricket Club its income and expenditure account for the year ending 31.3.2017 and its Balance Sheet as on 31.3.2017:

 

Rs

(a)

Donation received during the year for the construction of a permanent Pavilion

12,25,000

 

Expenditure incurred up to 31.3.2017 on its construction

10,80,000

 

The total estimated expenditure on construction of Pavilion being

25,00,000

 

 

 

(b)

Tournament Fund:

 

 

Balance as on 1.4.2016

10,700

 

Subscriptions for tournament received during the year

65,800

 

Expenditure incurred during the year on conducting tournaments

72,400

 

 

 

(c)

Life Membership fee received during the year

28,000

Give reasons for your answers

Answer:

(a)

Books of Bombay Women Cricket Club

Balance Sheet 

as on March 31, 2017

Liabilities

Amount

Rs

Assets

Amount

Rs

Donation for Pavilion

12,25,000

 

Construction of Pavilion in Progress

10,80,000

Less: Exp. on construction of Pavilion

(10,80,000)

1,45,000

 

 

 

 

 

 

Capital 

 

 

 

Add: Pavilion Construction

10,80,000

10,80,000

 

 

 

 

 

 

Reason

Donation for construction of Pavilion is a donation for specific purpose.

Expenses on construction on Pavilion is a capital expenditure.

(b)

Balance Sheet 

as on March 31, 2017

Liabilities

Amount

Rs

Assets

Amount

Rs

Tournament Fund

10,700

 

 

 

Add: Subscription for Tournament

65,800

 

 

 

76,500

 

 

 

Less: Tournament Expenses

(72,400)

4,100

 

 

 

 

 

 

Reason

All funds received are treated as capital receipts and expenses related to any fund are deduced from the concerned funds.

(c)

Balance Sheet 

as on March 31, 2017

Liabilities

Amount

Rs

Assets

Amount

Rs

Life Membership Fees

28,000

 

 

 

 

 

 

Reason

Life Membership Fees are considered as capital receipts and are shown on the Liabilities side of the Balance Sheet, if nothing is specified about its treatment. But if it is to be treated as revenue item, then it is shown on the credit side of the Income and Expenditure Account.

Page No 474:

Question 6:

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

 

4,000

News paper

1,850

Cash at Bank

 

 15,550

Electricity

3,000

Subscriptions

 

 

Fixed deposit with bank

(on 31.06.2017) @ 10% p.a.

18,000

2016

1,200

 

2017

26,500

 

Books

7,000

2018

500

28,200

Salary

3,600

Sale of old newspapers

 

1,250

Rent

6,500

Govt. grant

 

12,000

Postage charges

300

Sale of old furniture (book value Rs 5, 000)

 

 3,700

Furniture (purchased)

10,500

Interest received on FD

 

 450

Balance c/d

 

 

 

 

Cash in Hand

 3,000

 

 

 

Cash at Bank

8,200

 

 

65,150

 

65,150

 

 

 

 

 

Information:

(i)    Subscription outstanding as on 31.12.2016 Rs 2,000 and on December 31, 2017 Rs 1,500.

(ii)   On December 31, 2017 Salary outstanding Rs 600, and one month Rent paid in advance.

(iii)  On Jan. 01, 2016 organisation owned Furniture Rs 12,000, Books Rs 5,000.
 

Answer:

Books of Adult Literacy Organisation

Income and Expenditure Account 

as on Dec. 31, 2017

Dr.

Cr.

Expenditure

Amount

Rs

Income

Amount

Rs

Loss on Sale of Old Furniture

1,300

Subscription

26,500

 

General Expenses

3,200

Add: Outstanding for 2017

1,500

28,000

Newspapers

1,850

 

 

Electricity

 

3,000

Sale of Old Newspapers

1,250

Salary

3,600

 

Government Grant

12,000

Add: Outstanding for 2017

600

4,200

Interest received on F.D.

450

 

 

 

 

Add: Accrued Interest

450

900

Rent

6,500

 

 

 

Less: Prepaid for 2018 {6,500×(1/13)}

(500)

6,000

 

 

Postages Charges

 

300

 

 

Surplus (Excess of Income over Expenditure)

22,300

 

 

 

 

 

 

 

42,150

 

42,150

 

 

 

 

             

Balance Sheet 

as on Dec. 31, 2016

Liabilities

Amount

Rs

Assets

Amount

Rs

Capital Fund on Dec. 31, 2016 (Balancing Figure)

38,550

Subscription Outstanding

2,000

 

 

Cash in Hand

4,000

 

 

Cash at Bank

15,550

 

 

Furniture

12,000

 

 

Books

5,000

 

38,550

 

38,550

 

 

 

 

 

Balance Sheet 

as on Dec. 31, 2017

Liabilities

Amount 

Rs

Assets

Amount 

Rs

Capital

38,550

 

Prepaid Rent

500

Add: Surplus

22,300

60,850

Books

5,000

 

 

 

Add: Purchases

7,000

12,000

Salary Outstanding

600

 

 

Subscription  Received in Advance for 2018

 500

Furniture

12,000

 

 


 

Add: Purchases

10,500

 

 

 

 

22,500

 

 

 

Less: Sale

(5,000)

17,500

 

 

 

 

 

 

Fixed Deposit

18,000

 

 

 

Add: Accrued Interest

450

18,450

 

 

 

 

 

 

Cash in Hand

 

3,000

 

 

Cash at Bank

 

8,200

 

 

Subscription Outstanding for 2017

1,500

 

 

 

Add: Outstanding for 2016

800

2,300

 

 

 

 

 

61,950

 

61,950

 

 

 

 

 

Page No 474:

Question 7:

The following is the account of cash transactions of the Nari Kalayan Samittee for the year ended December 31, 2017:

Receipts

Amount

Rs

Payments

Amount

Rs

Balance from last year

2,270

Rent 

6,600

Subscriptions

32,500

Electric charges

3,200

Life membership fee

3,250

 Lecturer’s fee

730

Donation

2,500

Office expenses

1,480

Profit from entertainment

7,250

Printing and Stationery

1,050

Sale of old Books (books value Rs 1,000)

750

Legal fee

1,870

Interest

350

Books

6,500

 

 

Furniture purchased

 8,600

 

 

Expenses on nukar drama

1,300

 

 

Cash in hand

8,040

 

 

Cash at bank

9,500

 

 

 

 

 

48,870

 

48,870

 

 

 

 

You are required to prepare an Income and Expenditure Account after the following adjustments:

(a) Subscription still to be received are Rs 750, but subscription include Rs 500 for the year 2018.

(b)  In the beginning of the year the Sangh owned building Rs 20,000 and furniture Rs 3,000 and Books Rs 2,000.

(c) Provide depreciation on furniture @ 5% (including purchase), books @ 10% and building @ 5%.

Answer:

Books of  Nari Kalyan Samittee

Income and Expenditure Account 

as on Dec. 31, 2017

Dr.

 

 

Cr.

Expenditure

Amount

Rs

Income

Amount

Rs

Rent

6,600

Subscription

32,500

 

Electric Charges

3,200

Add: Outstanding for 2017

750

 

Lecturer’s fee

730

33,250

 

Office Expenses

1,480

Less: Advance for 2018

(500)

32,750

Printing and Stationery

1,050

Donation

2,500

Legal Fee

1,870

Profit from Entertainment

7,250

Depreciation on:

 

Interest

350

Books

750

 

 

 

Furniture

580

 

 

 

Building

1,000

2,330

 

 

Expenses on Nukar Drama

1,300

 

 

Loss on Sale of Books

250

 

 

Surplus

24,040

 

 

 

 

 

 

 

42,850

 

42,850

 

 

 

 

 

Balance Sheet 

as on Dec. 31, 2016

Liabilities

Amount

Rs

Assets

Amount

Rs

Capital Fund as Dec. 31, 2016

27,270

Building

20,000

(Balancing Figure)

 

Furniture

3,000

 

 

Books

2,000

 

 

Cash and Bank

2,270

 

 

 

 

 

27,270

 

27,270

 

 

 

 

 

Balance Sheet 

as on Dec. 31, 2017

Liabilities

Amount

Rs

Assets

Amount

Rs

Capital Fund

27,270

 

Building

20,000

 

Add: Life Membership Fees

3,250

 

Less: 5% Depreciation

(1,000)

 19,000

Add: Surplus

24,040

 54,560

 

 

 

 

 

Furniture

3,000

 

Advance Subscription for 2018

500

Add: Purchases

8,600

 

 

 

 

11,600

 

 

 

Less: 5% Depreciation

580

11,020

 

 

 

 

 

 

Books

2,000

 

 

 

Add: Purchases

6,500

 

 

 

 8,500

 

 

 

Less: Sales

1,000

 

 

 

 

 

7,500

 

 

 

Less: 5% Depreciation

750

6,750

 

 

Cash in Hand

 

8,040

 

 

Cash at Bank

 

9,500

 

 

Subscription Outstanding

 

750

 

 

 

 

 

55,060

 

55,060

 

 

 

 

             

 

Page No 474:

Question 8:

Following is the Receipt and Payment Account of Indian Sports Club, prepared Income and Expenditure Account, Balance Sheet as on December 31, 2017:

Receipt and Payment Account 

for the year ending December 31, 2017

Receipts

Amount

Rs

Payments

Amount

Rs

Balance b/d

7,890

Salary

11,000

Subscriptions

52,000

Electric charges

5,500

Life member ship fee

2,200

Billiard Table

17,500

Entrance fee

3,200

Office expenses

4,100

Tournament fund

26,000

Printing and Stationery

 2,300

Locker Rent

 1,250

Tournament expenses

18,500

Sale of old sports goods (Costing Rs 2,200)

2,500

Repair of ground

 2,000

Sale of Old Newspaper

 750

Furniture purchased

 7,700

Legacy

37,500

Sports equipments

12,000

 

 

Cash in Hand

12,690

 

 

Cash at Bank

 10,000

 

 

Fixed Deposit (on 1.10.17 for 10% p.a)

30,000

 

 

 

 

 

1,33,290

 

1,33,290

 

 

 

 

Other Information:

Subscription outstanding was on December 31, 2016 Rs 1,200 and Rs 3,200 on December 31, 2017. Locker rent outstanding on December 31, 2017 Rs 250. Salary outstanding on December 31, 2017 Rs 1,000.

On January 1, 2017, club has Building Rs 36,000, furniture Rs 12,000, Sports equipments Rs 17,500. Depreciation charged on these items @ 10% (including Purchase).
 

Answer:

Indian Sports Club

Income and Expenditure Account 

as on Dec. 31, 2017

Dr.

 

 

Cr.

Expenditure

Amount

Rs

Income

Amount

Rs

Salary

11,000

 

Subscriptions

52,000

 

Add: Outstanding for 2017

1,000

12,000

Add: Outstanding for 2017

3,200

 

Electric Charges

5,500

 

55,200

 

Office Expenses

4,100

Less: Outstanding for 2016

(1,200)

54,000

Printing and Stationery

 2,300

 

 

 

Repair of Ground

 2,000

Locker Rent

1,250

 

Depreciation on:

 

Add: Outstanding for 2017

250

 1,500

Furniture

1,970

 

 

 

Building

3,600

 

Entrance Fees

 3,200

Sports Equipments

2,730

 8,300

Profit on Sale of Sports

 

Surplus

26,300

Equipments (Rs 2,500 – Rs 2,200)

300

 

 

Sale of Old Newspapers

750

 

 

Accrued Interest

750

 

60,500

 

60,500

 

 

 

 

 

Balance Sheet 

as on January 01, 2016

Liabilities

Amount

Rs

Assets

Amount

Rs

Capital Fund (Balancing Figure)

74,590

Subscription Outstanding

1,200

 

 

 

Building

36,000

 

 

Furniture

12,000

 

 

Sports Equipments

17,500

 

 

Cash and Bank

7,890

 

74,590

 

74,590

 

 

 

 

         

Balance Sheet 

as on Dec. 31, 2017

Liabilities

Amount

Rs

Assets

Amount

Rs

Salary Outstanding 

1,000

Subscripting Outstanding

3,200

Tournament Fund

26,000

 

Locker Rent Outstanding

250

Less: Tournament Expenses

18,500

7,500

Building

36,000

 

 

 

Less: 10% Depreciation

(3,600)

32,400

Capital fund

74,590

 

 

 

Add: Life Membership Fee

2,200

 

Furniture

12,000

 

Add: Legacy

37,500

 

Add: Purchases

7,700

 

Add: Surplus

26,300

1,40,590

 

19,700

 

 

 

Less: 10% Depreciation

(1,970)

17,730

 

 

 

 

 

 

Sports Equipments

17,500

 

 

 

Add: Purchases

12,000

 

 

 

 

29,500

 

 

 

Less: Sales

(2,200)

 

 

 

 

27,300

 

 

 

Less: 10% Depreciation

(2,730)

24,570

 

 

 

 

 

 

Billiard Table 

17,500

 

 

Cash in hand

12,690

 

 

Cash at Bank

10,000

 

 

Fixed Deposit

30,000

 

 

 

Add: Accrued Interest

750

30,750

 

 

 

 

 

1,49,090

 

1,49,090

 

 

 

 

 

Page No 474:

Question 9:

From the following Receipt and Payment Account of Jan Kalyan Club, prepare Income and Expenditure Account and Balance Sheet for the year ending March 31, 2017.           

Receipt and Payment Account 

for the year ending March 31, 2017

Receipts

Amount

Rs

Payments

Amount

Rs

Cash in hand as on 1.4.16

6,800

Salaries

24,000

Subscription

60,200

Traveling Expenses

6,000

Donation

3,000

Stationery

2,300

Sale of furniture (Book value Rs 6000)

4,000

Rent

16,000

Entrance fee

800

Repair

700

Life membership fee

7,000

Books purchased

 6,000

Interest on investment (@ 5% for full year)

5,000

Building purchased

30,000

 

 

Cash in hand as 31.3.2017

1,800

 

 

 

 

 

86,800

 

86,800

 

 

 

 

Additional Information:

 

As on

1.04.2016

As on

31.03.2017

(i)

Subscription received in advance

1,000

 3,200

(ii)

Outstanding subscription

2,000

3,700

(iii)

Stock of stationery

 1,200

 800

(iv)

Books

13,500

16,500

(v)

Furniture

16,000

8,000

(vi)

Outstanding rent

1,000

2,000

 

Answer:

Books of Jan Kalyan Club

Income and Expenditure Account 

as on 31 March 2017

Dr.

 

 

Cr.

Expenditure

Amount

Rs

Income

Amount

Rs

Loss on Sale of Furniture (Rs 6,000 – Rs 4,000)

2,000

Subscription

60,200

 

Salaries

 

24,000

Less: Outstanding for 2016

(2,000)

 

Traveling Expenses

6,000

 

58,200

 

Stationery

2,300

 

Add: Outstanding for 2017

3,700

 

Add: Opening Stock

1,200

 

 

61,900

 

 

3,500

 

Add: Advance in 2016

1,000

 

Less: Closing Stock

(800)

2,700

 

62,900

 

 

 

Less: Advance in 2017

(3,200)

59,700

Repairs

700

 

 

Rent

16,000

 

Donation

 3,000

Less: Outstanding for 2016

(1,000)

 

Entrance Fees

800

 

15,000

 

Interest on Investments  

5,000

Add: Outstanding for 2017

2,000

17,000

 

 

Depreciation on Books

3,000

 

 

Depreciation on Furniture

2,000

 

 

Surplus

11,100

 

 

 

 

 

 

 

68,500

 

68,500

 

 

 

 

 

Balance Sheet 

as on April 01, 2016

Liabilities

Amount

Rs

Assets

Amount

Rs

Advance Subscription

1,000

Cash in Hand

6,800

Outstanding Rent

1,000

Investment {5,000 × (100/5)}

1,00,000

Capital Fund (Balancing figure)

1,37,500

Subscription Outstanding

2,000

 

 

Stock of Stationery

1,200

 

 

Books

13,500

 

 

Furniture

16,000

 

1,39,500

 

1,39,500

 

 

 

 

 

Balance Sheet 

as on March 31, 2017

Liabilities

Amount

Rs

Assets

Amount

Rs

Advance Subscription

3,200

Subscription Outstanding

3,700

Outstanding Rent

2,000

Stock of Stationery

800

Capital Fund

1,37,500

 

Investments

1,00,000

Add: Life Membership Fees

7,000

 

 

 

Add: Surplus

11,100

1,55,600

Books

13,500

 

 

 

 

Add: Purchases

6,000

 

 

 

 

19,500

 

 

 

Less: Depreciation

(3,000)

16,500

 

 

 

 

 

 

Building

30,000

 

 

Cash in Hand

1,800

 

 

Furniture

16,000

 

 

 

 Less: Sales

6,000

 

 

 

 

10,000

 

 

 

 Less: Depreciation

(2,000)

8,000

 

 

 

 

 

1,60,800

 

1,60,800

 

 

 

 

 

Page No 474:

Question 10:

Receipt and Payment Account of Shankar Sports club is given below, for the year ended March 31, 2017

Receipt and Payment Account 

for the year ending March 31, 2017

Receipts

Amount

Rs

Payments

Amount

Rs

Opening Cash in hand

2,600

Rent

18,000

Entrance fees

3,200

Wages

7,000

Donation for building

23,000

Billiard table

 14,000

Locker rent

 1,200

Furniture

 10,000

Life membership fee

7,000

Interest

 2,000

Profit from entertainment

3,000

Postage

1,000

Subscription

40,000

Salary

24,000

 

 

Cash in hand

4,000

 

80,000

 

 80,000

 

 

 

 

Prepare Income and Expenditure Account and Balance Sheet with help of following Information:

Subscription outstanding on March 31, 2016 is Rs 1, 200 and Rs 2,300 on March 31, 2017, opening stock of postage stamps is Rs 300 and closing stock is Rs 200, Rent Rs 1,500 related to 2015 and Rs 1,500 is still unpaid.

On April 01, 2016 the club owned furniture Rs 15,000, Furniture valued at Rs 22,500

On March 31, 2017. The club took a loan of Rs 20,000 (@ 10% p.a.) in 2017.
 

Answer:

Books of Shankar Sports Club

Income and Expenditure Account 

as on 31 Dec. 2017

Dr.

 

 

Cr.

Expenditure

Amount

Rs

Income

Amount

Rs

Rent

18,000

 

Entrance Fees

3,200

Add: Outstanding for 2017

1,500

 

Locker Rent

1,200

 

19,500

 

Profit from Entertainment

3,000

Less: Outstanding for 2016

(1,500)

18,000

 

 

 

 

Subscription

40,000

 

Wages

7,000

Less: Outstanding for 2016

(1,200)

 

Depreciation on Furniture

2,500

 

38,800

 

Interest

2,000

Add: Outstanding for 2017

2,300

41,100

Postage

1,000

 

Deficit (Balancing Figure)

6,100

Add: Opening Stock

300

 

 

 

 

1,300

 

 

 

Less: Closing Stock

(200)

1,100

 

 

Salaries

24,000

 

 

 

 

 

 

 

54,600

 

54,600

 

 

 

 

 

Balance Sheet 

as on  December 31, 2016

Liabilities

Amount

Rs

Assets

Amount

Rs

Rent Outstanding

1,500

Cash in Hand

2,600

10%  Loan

20,000

Subscription Outstanding

1,200

 

 

Furniture

15,000

 

 

Stock of Postage Stamps

300

 

 

Capital fund Deficit (Balancing figure)

2,400

 

 

 

 

 

21,500

 

21,500

 

 

 

 

 

Balance Sheet 

as on December 31, 2017

Expenditure

Amount

Rs

Income

Amount

Rs

Rent Outstanding

1,500

Subscription Outstanding

2,300

10%  Loan

20,000

Stock of Postage Stamps

200

Donation for Building

23,000

Billiard Table

14,000

Capital Fund

(2,400)

 

Furniture

15,000

 

Add: Life Membership Fee

7,000

 

Add: Purchases

10,000

 

Less: Deficit

(6,100)

 

 

 

25,000

 

 

 

Less: Depreciation

(2,500)

22,500

 

 

Cash in Hand

4,000

 

 

Capital Fund (Deficit)

1500

 

44,500

 

44,500

 

 

 

 

             

* NOTE 1:

Capital Fund

(2,400)

 

Add:

Life Membership Fees

7,000

 

Less:

Deficit

(6,100)

 

 

Net Deficit

(1,500)

 

 

Page No 474:

Question 11:

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

 

12,000

Furniture

4,000

Subscription

 

 

Telephone expenses

800

2014-2015

2,000

 

Salary

 

2015-2016

22,000

24,000

2014-2015

1,000

Entrance fees

 

2,800

2015-2016

4,000

Locker rent

 

1,000

Newspapers

700

Life membership fee

 

1,200

Sundry expenses

 1,000

Government grant

 

11,000

Defence bonds

18,000

 

 

 

Land

20,000

 

 

 

Closing cash balance

2,500

 

 

52,000

 

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 Advance

1,000

Outstanding Expenses

3,000

Outstanding salary

 2,000

Building

35,000

Loan

10,000

 

 

Capital fund

 36,800

 

 

 

50,000

 

50,000

 

 

 

 

 

Answer:

Books of Culture Club

Income and Expenditure Account 

as on March 31, 2016

Dr.

 

Cr.

Expenditure

Amount

Rs

Income

Amount

Rs

Telephone Expenses

800

Subscription

22,000

 

Salary

4,000

Add: Advance Received in 2015

1,000

23,000

Newspapers

700

 

 

Sundry Expenses

1,000

Entrance Fees

2,800

 

 

Locker Rent

1,000

 

Surplus (Balancing figure)

31,500

Add: Advance Received in 2015

200

1,200

 

 

Government Grants

11,000

 

 

 

 

 

38,000

 

38,000

 

 

 

 

               

Balance Sheet 

as on March 31, 2016

Liabilities

Amount

Rs

Assets

Amount

Rs

Capital Fund

36,800

 

Subscription Still Outstanding for 2015

1,000

Add: Life Membership Fees

1,200

 

(Rs 3,000 – Rs 2,000)

 

Add: Surplus

31,500

69,500

Furniture

4,000

 

 

Defence Bonds

18,000

Salary Still Outstanding for 2015

1,000

Land 

20,000

Loan

10,000

Building

35,000

 

 

Cash in Hand

2,500

 

80,500

 

80,500

 

 

 

 

 

Page No 474:

Question 12:

From the following Receipt and Payment Account prepare final accounts of a Unity Club for the year ended March 31, 2017.

Receipt and Payment Accounts 

for the year ending March 31, 2017

Receipts

Amount

Rs

Payments

Amount

Rs

Balance b/d

 

15,000

Furniture

18,000

Sale of Old furniture (costing Rs 6,000)

4,000

Library books

10,000

Subscriptions:

 

 

Salaries

 72,000

2015–16

 18,000

 

General expenses

18,000

2016–17

60,000

 

Electric charges

12,000

2017–18

12,000

 90,000

Newspapers

33,800

Sale of old newspapers

 

10,800

Postage

 3,000

Profit from entertainment

 

44,000

Stationery

 40,000

Rent

 

84,000

Audit fee

 8,000

 

 

 

Balance c/d

33,000

 

 

2,47,800

 

2,47,800

 

 

 

 

 

 

Balance Sheet 

as on March 31, 2016

Liabilities

Amount

Rs

Assets

Amount

Rs

Outstanding Salary

6,000

Cash

15,000

Capital Fund

6,94,000

Outstanding subscription

18,000

 

 

Library Books

30,000

 

 

Furniture

37,000

 

 

Land and Building

6,00,000

 

7,00,000

 

7,00,000

 

 

 

 

Additional Information:

1.

The Club had 500 members each paying an annual subscription of Rs 150.

2.

On 31.3.2016 salaries outstanding amounted to Rs 1,200 and salaries paid included Rs 6,000 for the year 2015–16.

3.

Provide 5% depreciation on Land and Building.

 

Answer:

Books of Unity Club

Income and Expenditure Account 

as on March 31, 2017

Dr.

 

Cr.

Expenditure

Amount 

Rs

Income

Amount

Rs

Loss on Sale of Old Furniture (4,000 – 6,000)

 2,000

Subscription

 

 

 

500 members at Rs 150 each

75,000

Salaries

72,000

 

Sale of Old Newspapers

10,800

Add: Outstanding for 2015–16

1,200

 

Profit from Entertainment

44,000

 

73,200

 

Rent

84,000

Less: Outstanding for 2016–17

(6,000)

67,200

 

 

General Expenses

18,000

Deficit (Balancing figure)

200

Electric Charges

12,000

 

 

Newspapers

33,800

 

 

Postage

3,000

 

 

Stationery

40,000

 

 

  Audit Fees

8,000

 

 

Depreciation on Land and Building

30,000

 

 

 

2,14,000

 

2,14,000

 

 

 

 

             

Balance Sheet 

as on 31 March 2017

Liabilities

Amount 

Rs

Assets

Amount 

Rs

Advance Subscription (for 2017–18)

12,000

Subscription Outstanding

15,000

Salaries Outstanding

1,200

Furniture

37,000

 

Capital Fund

6,94,000

 

Add: Purchases

18,000

 

Less: Deficit

(200)

6,93,800

 

55,000

 

 

 

 

Less: Sales

(6,000)

49,000

 

 

 

 

 

 

 

Library Books

30,000

 

 

 

Add: Purchases

10,000

40,000

 

 

 

 

 

 

 

Land and Building

6,00,000

 

 

 

Less: 5% Depreciation

(30,000)

5,70,000

 

 

 

 

 

 

Cash and Bank

33,000

 

7,07,000

 

7,07,000

 

 

 

 

 

Page No 474:

Question 13:

Following is the information in respect of certain items of a Sports Club. You are required to show them in the Income and Expenditure Account and the Balance Sheet.

Details

Amount

Rs

Sports Fund as on April 1, 2016

80,000

Sports Fund Investments

80,000

Interest on Sports Fund Investments

8,000

Donations for Sports Fund

30,000

Sports Prizes awarded

16,000

Expenses on Sports Events

7,000

General Fund

2,00,000

General Fund Investments

2,00,000

Interest on General Fund Investments

 20,000

 

 

Answer:

Income and Expenditure Account 

as on March 31, 2016

Dr.

 

Cr.

Expenditure

Amount

Rs

Income

Amount

Rs

 

 

Interest on General Fund Investments

20,000

 

 

 

 

 

 

 

 

 

 

 

 

           

Balance Sheet 

as on March 31, 2016

Liabilities

Amount

Rs

Assets

Amount

Rs

Sports Fund

80,000

 

Sports Fund Investments

80,000

Add: Interest on Sports Fund

 

 

General Fund Investments

2,00,000

Investments

8,000 

 

 

 

Add: Donation for Sports Fund

30,000

 

 

 

 

1,18,000

 

 

 

Less: Sports Prizes Awarded

(16,000)

 

 

 

Less: Expenses on Sports Events

(7,000)

95,000

 

 

 

 

 

 

General Fund

 2,00,000

 

 

 

 

 

 

 

Page No 474:

Question 14:

Receipt and Payment Account of Maitrey Sports Club showed that Rs 68,500 were received by way of subscriptions for the year ended on March 31, 2017.

The additional information was as under:

1. Subscription Outstanding as on March 31, 2016 were Rs 6,500,

2. Subscription received in advance as on March 31, 2016 were Rs 4,100,

3. Subscription Outstanding as on March 31, 2017 were Rs 5,400,

4. Subscription received in advance as on March 31, 2017 were Rs 2,500.

Show how that above information would appear in the final accounts for the year ended on March 31, 2017 of Maitrey Sports Club.

Answer:

Books of Maitrey Sports Club

Income and Expenditure Account 

as on March 31, 2017

Dr.

 

Cr.

Expenditure

Amount

 Rs

Income

Amount

Rs

 

 

Subscription

68,500

 

 

 

Less: O/s on Mar. 31, 2016

(6,500)

 

 

 

62,000

 

 

 

Add: Advance on Mar. 31, 2016

4,100

 

 

 

Add: O/s on Mar. 31, 2017

5,400

 

 

 

71,500

 

 

 

Less: Advance on Mar. 31, 2017

(2,500)

69,000

 

 

 

 

 

 

 

 

             

Balance Sheet 

as on  March 31, 2016

Liabilities

Amount

Rs

Assets

Amount

Rs

Subscription in Advance

4,100

Subscription Outstanding

6,500

 

 

 

 

 

 

 

 

Balance Sheet 

as on March 31, 2017

Liabilities

Amount

Rs

Assets

Amount

Rs

Subscription in Advance

2,500

Subscription Outstanding

5,400

 

 

 

 

 

 

 

 

 

Page No 474:

Question 15:

Following is the Receipt and Payment account of Rohatgi Trust :

Receipt and Payment Account 

for the year ending December 31, 2017

Receipts

Amount

Rs

Payments

Amount

Rs

Cash in hand

 

14,000

Rent

6,000

Cash at Bank

 

60,000

Salary

12,000

Subscriptions:

2016

2017

2018

 

5,000

83,000

3,000

91,000

Postage

Electricity charges

Purchase of furniture

Books

300

6,000

20,000

3,000

Sale of Investment

 

90,000

Defence Bonds

1,50,000

Interest on investment

 

2,000

Help to needy students

22,000

Sale of furniture (book value Rs 3,000)

 3,200

Cash in hand

Cash at bank

10,900

30,000

 

 

2,60,200

 

2,60,200

 

 

 

 

 

Prepare Income and expenditure account for the year ended December 31, 2017, and a balance sheet as on that date after the following adjustments: Subscription for 2017, still owing were Rs 7,000. Interest due on defence bonds was Rs7,000, Rent still owing was Rs 1,000. The Book value of investment sold was Rs 80,000, Rs 30,000 of the investment were still in hand. Subscription received in 2017 included Rs 400 from a life member. The total furniture on January 1, 2017 was worth Rs 12,000. Salary paid for the year 2018 is Rs 2,000.

Answer:

Books of Rohatgi Trust

Income and Expenditure Account 

as on December 31, 2017

Dr.

 

Cr.

Expenditure

Amount

 Rs

Income

Amount

 Rs

Rent

6,000

 

Subscription

83,000

 

Add: Outstanding

1,000

7,000

Add: Outstanding for 2017

7,000

 

 

 

90,000

 

Salary

12,000

 

Less: Life Membership Fees

(400)

89,600

Less: Advance for 2018

(2,000)

10,000

 

 

 

 

Interest Accrued on Defence Bonds

7,000

Postage

300

Profit on Sale of Investment

(Rs 90,000 – Rs 80,000)

10,000

Electricity Charges

6,000

Profit on Sale of Furniture

(Rs 3,200 – Rs 3,000)

200

Help to Needy Students

22,000

Interest on Investments

2,000

Surplus (Balancing Figure)

63,500

 

 

 

1,08,800

 

1,08,800

 

 

 

 

               

Balance Sheet 

as on December 31, 2016

Liabilities

Amount

Rs

Assets

Amount

Rs

Capital fund (Balancing Figure)

2,01,000

Subscription Outstanding

5,000

 

 

Investment (Rs 80,000 + Rs 30,000)

1,10,000

 

 

Furniture

12,000

 

 

Cash in hand

14,000

 

 

Cash at bank

60,000

 

2,01,000

 

2,01,000

 

 

 

 

 

Balance Sheet 

as on December 31, 2017

Expenditure

Amount

 Rs

Income

Amount

 Rs

Advance Subscription 

3,000

Subscription Outstanding

 

7,000

Rent Outstanding

1,000

Defence Bonds

1,50,000

 

Capital Fund

2,01,000

 

Add: Accrued Interest on Defence Bonds

7,000

1,57,000

Add: Surplus

 

63,500

 

 

 

 

Add: Life Membership Fees

400

 2,64,900

Investment

30,000

 

 

Advance Salaries

2,000

 

 

Furniture

12,000

 

 

 

Add: Purchases

20,000

 

 

 

32,000

 

 

 

Less: Sales

(3,000)

29,000

 

 

Books

3,000

 

 

Cash in Hand

10,900

 

 

Cash at Bank

30,000

 

2,68,900

 

2,68,900

 

 

 

 

             

 

Page No 474:

Question 16:

Following Receipt and Payment Account was prepared from the cash book of Delhi Charitable Trust for the year ending December 31, 2017

Receipt and Payment Account 

for the year ending December 31, 2017

Receipts

Amount

Rs

Payments

Amount

Rs

Balance b/d

 

Charity

11,500

Cash in hand

11,500

Rent and taxes

3,200

Cash at bank

12,600

Salary

6,000

Donation

9,000

Printing

600

Subscription

42,800

Postage

300

Legacies

18,000

Advertisements

4,500

Interest on investment

4,500

Insurances

2,000

Sale of old newspapers

200

Furniture

21,600

 

 

Investment

23,000

 

 

Balance c/d:

 

 

 

Cash in hand

9,900

 

 

Cash at bank

16,000

 

98,600

 

98,600

 

 

 

 

Prepare Income and expenditure account for the year ended December 31, 2017, and a balance sheet as on that date after the following adjustments:

(a)

It was decided to treat one-third of the amount received on account of donation as income.

(b)

Insurance premium was paid in advance for three months.

(c)

Interest on investment Rs1,100 accrued was not received.

(d)

Rent Rs600: salary Rs900 and advertisement expenses Rs1,000 outstanding as on December 31, 2017.

 

Answer:

Books of Delhi Charitable Trust

Income and Expenditure Account 

as on December 31, 2017

Dr.

Cr.

Expenditure

Amount

 Rs

Income

Amount

 Rs

Insurance

2,000

 

Donation {9,000 × (1/3)}

3,000

Less: Prepaid {2,000 × (3/15)}

(400)

1,600

Interest on Investments

4,500

 

 

 

Add: Accrued Interest

1,100

5,600

Charity

11,500

 

 

Rent and Taxes

3,200

 

Subscription

42,800

Add: Outstanding

600

3,800

Sale of Old Newspapers

200

 

 

 

 

Salary

6,000

 

 

 

Add: Outstanding

900

6,900

 

 

Printing

600

 

 

Postage

300

 

 

Advertisements

4,500

 

 

 

Add: Outstanding

1,000

5,500

 

 

Surplus (Balancing figure)

21,400

 

 

 

51,600

 

51,600

 

 

 

 

             

Balance Sheet 

as on December 31, 2016

Liabilities

Amount

Rs

Assets

Amount

Rs

Capital Fund (Balancing figure)

24,100

Cash in Hand

11,500

 

 

Cash at Bank

12,600

 

24,100

 

24,100

 

 

 

 

 

Balance Sheet 

as on December 31, 2017

Liabilities

Amount

Rs

Assets

Amount

Rs

Capital Fund

24,100

 

Prepaid Insurance {2,000 × (3/15)}

400

Add: Donation {9,000 × (2/3)

6,000

 

Investment

23,000

 

Add: Legacies

18,000

 

Add: Accrued Interest

1,100

24,100

Add: Surplus

21,400

69,500

Furniture

21,600

Rent Outstanding

600

Cash in Hand

9,900

Salary Outstanding

900

Cash at Bank

16,000

Advertisement Expenses Outstanding

1,000

 

 

 

72,000

 

72,000