Book Keeping Accountancy Solutions 2014 Solutions for Class 12 Commerce Accountancy Chapter 7 Accounts Of 'Not For Profit' Concerns are provided here with simple step-by-step explanations. These solutions for Accounts Of 'Not For Profit' Concerns are extremely popular among class 12 Commerce students for Accountancy Accounts Of 'Not For Profit' Concerns Solutions come handy for quickly completing your homework and preparing for exams. All questions and answers from the Book Keeping Accountancy Solutions 2014 Book of class 12 Commerce Accountancy Chapter 7 are provided here for you for free. You will also love the ad-free experience on Meritnation’s Book Keeping Accountancy Solutions 2014 Solutions. All Book Keeping Accountancy Solutions 2014 Solutions for class 12 Commerce Accountancy are prepared by experts and are 100% accurate.
Page No 227:
Question 1.A1:
Objective Type Questions.
Answer in one sentence only.
What do you mean by ‘Not for Profit’ concerns?
Answer:
Organisations that are formed not to earn profit but to render services to their members and to the public are known as not-for profit organisations. For example, aided schools, clubs, societies etc.
Page No 227:
Question 1.A2:
Objective Type Questions.
Answer in one sentence only.
What is Capital Fund?
Answer:
In case of not-for profit organisations, excess of assets over liabilities is called capital fund. It is similar to the capital account in case of profit-making entities. Any surplus/ deficit shown by the Income and Expenditure Account will be added/ deducted from the opening capital and the net capital fund will be shown on the Liabilities side.
Page No 227:
Question 1.A3:
Objective Type Questions.
Answer in one sentence only.
Which receipts are called capital receipts?
Answer:
Those receipts, the benefits of which accrue to an organisation in the current year, as well in the years to come, are referred to as capital receipts. They are non-recurring in nature. For example, life membership fees, endowment receipts, donations and legacies etc.
Page No 227:
Question 1.A4:
Objective Type Questions.
Answer in one sentence only.
What is deferred revenue expenditure?
Answer:
Those expenses, the benefits of which accrue to an organisation for more than one accounting year are known as deferred revenue expenditure. For example, in case of advertisement expenses, the benefits of advertisement accrue to an organisation for more than one year. Hence, such expenses are spread over the years in which the benefits accrue to the organisation. The current year expenses are debited to Income and Expenditure Account and the balance is shown under Assets side of the Balance Sheet.
Page No 227:
Question 1.A5:
Objective Type Questions.
Answer in one sentence only.
What do you mean by recurring expenses?
Answer:
Expenses which are of routine nature are known as recurring expenses. These expenses are incurred in the normal course of business activities (operations) and are debited to Income and Expenditure Account. For example, salaries, rent, printing and stationery etc.
Page No 227:
Question 1.A6:
Objective Type Questions.
Answer in one sentence only.
What is legacy?
Answer:
Legacy is the money received by a not-for profit organisation (NPO) as per the will of a deceased person. It is not the main source of income for an NPO. It is treated as a capital receipt.
Page No 227:
Question 1.A7:
Objective Type Questions.
Answer in one sentence only.
What does ‘surplus’ mean?
Answer:
Income and Expenditure Account is prepared as a part of final accounts of not-for- profit organisations. It is prepared to ascertain the results of operating activities of the business. All the incomes and expenses are recorded in the Income and Expenditure Account. If the income side exceeds the expenditure side, then it is recorded as surplus, whereas if the expenditure side exceeds the income side, it is recorded as deficit.
Page No 227:
Question 1.A8:
Objective Type Questions.
Answer in one sentence only.
What do you mean by subscription?
Answer:
Subscription is the main source of income of a not-for profit organisation. It is shown on the credit side (i.e. the income side) of the Income and Expenditure Account. It is in the form of membership fees received from the members of an organisation every year.
Page No 227:
Question 1.A9:
Objective Type Questions.
Answer in one sentence only.
What is an Entrance Fee?
Answer:
Fee charged from the new members, apart from the annual subscriptions, is termed as entrance fee. It represents the amount to be paid by the person, who intends to become the member of the society, club etc. It can be treated either as a capital receipt or a revenue receipt. Also, it is possible that some portion of it may be capitalised while the rest may be treated as revenue.
Page No 227:
Question 1.A10:
Objective Type Questions.
Answer in one sentence only.
Which receipts are called ‘Revenue Receipts?
Answer:
Revenue receipts are those receipts that are received in the conduct of ordinary and day-to-day business activities. For instance, receipts from the sale of goods and services are the main source of revenue receipts. These receipts or incomes are received frequently in the normal course of business operations. Revenue receipts are shown on the credit side of the Income and Expenditure Account.
Page No 227:
Question 1.A11:
Objective Type Questions.
Answer in one sentence only.
What is ‘Deficit’?
Answer:
If the expenditure side of the Income and Expenditure Account exceeds its income side, then it is regarded as deficit.
Page No 227:
Question 1.A12:
Objective Type Questions.
Answer in one sentence only.
What do you mean by non-recurring expenses?
Answer:
Expenses that are not incurred frequently during the normal course of a business are known as non-recurring expenses. These are one-time expenses incurred due to some event or abnormal circumstances.
Page No 227:
Question 1.B1:
Write one Word / Term / Phrase for each of the following statement.
An Account, which is prepared by ‘Not for Profit’ concern, instead of Profit and Loss Account.
Answer:
Income and Expenditure Account
Explanation: It is an account prepared by a not-for profit organisation to know the surplus/deficit earned by the organization during the accounting period. It is similar to a Profit and Loss Account prepared by the sole-proprietorship concerns. It is nominal in nature; therefore, expenses are debited and incomes are credited in this account.
Page No 227:
Question 1.B2:
Write one Word / Term / Phrase for each of the following statement.
The excess of total assets over total liabilities of a ‘Not for Profit’ Concern.
Answer:
Capital Fund
Explanation: In case of non- profit organisations, excess of assets over liabilities is termed as capital fund. It is similar to the capital account in case of profit-making entities. Any surplus/ deficit shown by the Income and Expenditure Account will be added/ deducted from the opening capital and the net capital fund will be shown on the Liabilities side.
Page No 227:
Question 1.B3:
Write one Word / Term / Phrase for each of the following statement.
The income which is earned during the year, but it has not been received during the year.
Answer:
Accrued Income/Outstanding Income
Explanation: Certain incomes are earned during the current year but are not actually received by the end of the current year. Such incomes are known as ‘accrued incomes’ or outstanding income, i.e. income which is earned but yet to be received. For example, subscription outstanding at the end of current year is accrued income. It is added to the amount of subscriptions on the credit side of Income and Expenditure Account and is also shown on the Assets side of the Closing Balance Sheet.
Page No 227:
Question 1.B4:
Write one Word / Term / Phrase for each of the following statement.
Such concerns, which are formed for rendering some useful services to its members without having profit motive.
Answer:
‘Not for Profit’ concern
Explanation: Certain organisations are formed not to earn profits but to render services to their members or to the society at large. For example, aided schools, clubs, hospitals, societies etc. The primary motive of such organisations is to provide a service. In such organisations, Income and Expenditure Account and Balance Sheet are prepared at year end to know the surplus/deficit and the financial position.
Page No 227:
Question 1.B5:
Write one Word / Term / Phrase for each of the following statement.
Excess of income over expenditure.
Answer:
Surplus
Explanation: Income and Expenditure Account is prepared to ascertain the results of activities of a not-for-profit organisation. When the income side exceeds the expenditure side, we have surplus. However, in case of profit-seeking entities, it is termed as profit (ascertained from Profit and Loss Account).
Page No 227:
Question 1.B6:
Write one Word / Term / Phrase for each of the following statement.
Excess of expenditure over income.
Answer:
Deficit
Explanation: When the expenditure side of the Income and Expenditure Account exceeds its income side, we have deficit. In case of profit seeking entities, it is termed as loss (ascertained from Profit and Loss Account).
Page No 227:
Question 1.B7:
Write one Word / Term / Phrase for each of the following statement.
A fund created out of a specific amount earmarked, gifted, or donated and the income of this fund is to be used for a specific purpose.
Answer:
Endowment Fund
Explanation: Endowment fund is basically the fund generated via gifts and bequests. The income from such funds is usually allocated for some specific purpose. It is a capital receipt because it provides a permanent income to the organisation and is shown on the Liabilities side as a separate item.
Page No 227:
Question 1.B8:
Write one Word / Term / Phrase for each of the following statement.
The fees paid by a person, who wants to become a member of the concern, for his whole life.
Answer:
Life Membership Fees
Explanation: In order to become the member of an organisation for life, some members pay fees in lump sum (i.e. a single large payment). Such fees are known as life membership fees. It is non-recurring in nature, i.e. a capital income. Therefore, it is not credited to Income and Expenditure Account; rather, it is added to the capital fund appearing on the Liabilities side of the Balance Sheet.
Page No 227:
Question 1.B9:
Write one Word / Term / Phrase for each of the following statement.
All such receipts which are non-recurring in nature and not forming a part of regular flow of income of a concern.
Answer:
Capital Receipts
Explanation: Those receipts, the benefits of which accrue to an organisation in the current year, as well as in the years to come, are termed as capital receipts. They are non-recurring in nature. For example, life membership fees, endowment receipts, donations and legacies etc.
Page No 227:
Question 1.B10:
Write one Word / Term / Phrase for each of the following statement.
A statement showing the financial position of a concern on a particular date.
Answer:
Balance Sheet
Explanation: A statement prepared to ascertain the financial position of a business at the end of the accounting year is regarded as a Balance Sheet. It contains only capital items, i.e. assets, liabilities and capital fund. It is prepared after the transfer of all revenue incomes and expenses to the Income and Expenditure Account.
Page No 227:
Question 1.C1:
Select the most appropriate answers from the alternatives given below and rewrite the sentences.
Income and Expenditure Account is a ______________.
a) capital account
b) real account
c) personal account
d) nominal account
Answer:
Income and Expenditure Account is a nominal account.
Explanation: In this account, only revenue items are recorded, while capital items are ignored. It is prepared to ascertain the results of operating activities of the business over a period of time. All revenue items, i.e. both income and expenses, are recorded in it. Thus, it is treated as a nominal account.
Page No 227:
Question 1.C2:
Select the most appropriate answers from the alternatives given below and rewrite the sentences.
For a sports club, expenditure on the purchase of sports Machinery/Equipment is a ______________ expenditure.
a) revenue
b) recurring
c) general
d) capital
Answer:
For a sports club, expenditure on the purchase of sports machinery/equipment is a capital expenditure.
Explanation: Expenditure incurred on the purchase of fixed assets is regarded as capital expenditure. So, the purchase of sports machinery/equipment is a capital expenditure. Such expenses are recorded on the Assets side of the Balance Sheet. However, the depreciation charged on the equipment and machinery (or any other fixed asset) is a type of revenue expenditure and is, therefore, charged to the Income and Expenditure Account.
Page No 227:
Question 1.C3:
Select the most appropriate answers from the alternatives given below and rewrite the sentences.
‘Outstanding subscription’ at the end of Accounting year represents _____________.
a) a liability
b) an expenditure
c) an asset
d) a capital fund
Answer:
‘Outstanding subscription’ at the end of Accounting year represents an asset.
Explanation: Subscriptions are the main source of income for an NPO. Outstanding subscription represents amount receivable on account of subscriptions. Such outstanding income at year-end is an asset and, therefore, shown on the Assets side of the Closing Balance Sheet (being closing balance of subscription).
Page No 228:
Question 1.C4:
Select the most appropriate answers from the alternatives given below and rewrite the sentences.
Excess of income over Expenditure is termed as _________________.
a) deficit
b) profit
c) surplus
d) loss
Answer:
Excess of income over expenditure is termed as surplus.
Explanation: When income side of the Income and Expenditure Account exceeds its expenditure side, then we have surplus.
Page No 228:
Question 1.C5:
Select the most appropriate answers from the alternatives given below and rewrite the sentences.
‘Not for Profit’ Concerns prepare _________________ Account instead of Profit and loss Account.
a) Trading
b) Income and Expenditure
c) Cash
d) Receipts and Payments
Answer:
‘Not for Profit’ Concerns prepare Income and Expenditure Account instead of Profit and loss.
Explanation: Not-for Profit concerns prepare Income and Expenditure Account to ascertain the surplus/deficit resulting from the activities of an organisation. Like Profit and Loss Account, Income and Expenditure Account is prepared as a part of final accounts. All revenue expenses and all revenue incomes are recorded in this account.
Page No 228:
Question 1.C6:
Select the most appropriate answers from the alternatives given below and rewrite the sentences.
Purchase of stationery is an _______________ expenditure.
a) capital
b) revenue
c) long-term
d) deferred revenue
Answer:
Purchase of stationery is a revenue expenditure.
Explanation: Stationery is treated as consumable good, as it is used up during the year. The amount of stationery consumed during the year should be debited to Income and Expenditure Account. It is a type of revenue expenditure.
The amount consumed is calculated as,
Opening stock
Add: Purchases made during the year
Less: Closing stock
Page No 228:
Question 1.C7:
Select the most appropriate answers from the alternatives given below and rewrite the sentences.
Usually _______________ is a major source of revenue income for ‘Not for Profit’ concerns.
a) subscription
b) donations
c) legacies
d) life membership
Answer:
Usually subscription is a major source of revenue income for ‘Not for Profit’ concerns.
Explanation: It is the main source of income for a not-for-profit organisation. It is recorded on the credit side, i.e. the income side of the Income and Expenditure Account.
Why Life Membership Fees is not the correct option?
On the other hand, life membership fees are the amount paid by a person in lump sum to become the member of the organisation for life. It is non-recurring in nature and, hence, added to the capital fund.
Why Legacy is not the correct option?
Legacy is the amount received by the not-for-profit organisation as per the will of a deceased person. It is non-recurring in nature and, therefore, treated as capital receipt. Hence, legacy cannot be treated as the main source of income for an NPO.
Why Donation is not the correct option?
Donations can be categorised into general donations and specific donations. Specific donations are received for particular purposes; hence they are to be capitalised. On the contrary, general donations, usually of big amount, are not expected to be received every year. Hence, cannot be treated as main source of income.
Page No 228:
Question 1.C8:
Select the most appropriate answers from the alternatives given below and rewrite the sentences.
An Income and Expenditure Account and a Balance sheet is prepared as final accounts by a ______________ .
a) ‘Not for Profit’ Concern
b) Trading Concern
c) Commercial Organisation
d) Public Limited Company
Answer:
An Income and Expenditure Account and a Balance sheet is prepared as final accounts by a Not for Profit Concern.
Explanation: Certain organisations are formed not to earn profits but to render services to their members or to society at large. For example, schools, clubs, hospitals etc. The primary motive of such organisations is to provide service. At the end of the accounting year, non-profit organisations (NPO) prepare Income and Expenditure Account and Balance Sheet to ascertain the financial performance (i.e. surplus or deficit) and the financial position.
In case of profit seeking entities, i.e. commercial organisations, public limited companies or trading concerns, Profit and Loss Account is prepared to ascertain the profit earned or loss incurred during the year and Balance Sheet is prepared to know the financial position of the business.
Page No 228:
Question 1.C9:
Select the most appropriate answers from the alternatives given below and rewrite the sentences.
Non-Cash items are not recorded in_____________ .
a) Income and Expenditure
b) Receipt and Payments Accounts
c) Balance Sheet
d) Profit and Loss Account
Answer:
Non-Cash items are not recorded in Receipts and Payments Account.
Explanation: Receipts and Payments Account is a summary of cash and bank transactions over a certain period. It is prepared by societies, clubs, associations etc. It is prepared on cash basis. So, any transaction that is not recorded in the Cash Book will not be entered in the Receipts and Payments Account also.
On the other hand, Income and Expenditure Account, Balance Sheet and Profit and Loss Account record non- cash items such as depreciation. These items are not recorded in the Receipts and Payments Account.
Page No 228:
Question 1.C10:
Select the most appropriate answers from the alternatives given below and rewrite the sentences.
In case of non trading concern the excess of assets over liabilities is termed as _____________.
a) surplus
b) deficit
c) capital fund
d) loan
Answer:
In case of non trading concern the excess of assets over liabilities is termed as capital fund.
Explanation: Excess of assets over liabilities, in case of a not-for-profit organisation, is called capital fund. It is same as capital, which is calculated in case of profit-seeking entities. Opening capital fund is calculated by deducting opening liabilities from opening assets. It is shown on the Liabilities side of the Balance Sheet.
Page No 228:
Question 1.D1:
State whether the following statements are True or False.
‘Not for Profit’ concerns do not have profit motive.
Answer:
True
Explanation: Certain organisations are formed not to earn profits but to render services to members or to society at large. For example, aided schools, clubs, hospitals etc. The primary motive of all these organisations is to provide service.
Page No 228:
Question 1.D2:
State whether the following statements are True or False.
‘Not for Profit’ concerns concentrate their efforts on maximizing their profit.
Answer:
False
Explanation: Unlike profit-making organisations, NPOs do not have profit-making as their primary motive. In fact, they are formed to render services to their members or to society at large. For example, aided schools, clubs, hospitals etc. The primary motive of all these organisations is to provide service to others.
Page No 228:
Question 1.D3:
State whether the following statements are True or False.
Every year, ‘Bal Vikas Mandir’, a primary school, prepares Income and expenditure Account.
Answer:
True
Explanation: It is an account prepared by NPOs to know the surplus earned /deficit incurred during the accounting period. It is similar to the Profit and Loss Account prepared by the profit-making organisations. It is a nominal account, where all the revenue expenses are debited and revenue incomes are credited. As Bal Vikas Mandir is a school (i.e. an NPO), it prepares Income and Expenditure Account.
Page No 228:
Question 1.D4:
State whether the following statements are True or False.
Charitable Institutions prepare Profit and Loss Account, at the end of every financial year.
Answer:
False
Explanation: Charitable institutions are not-for-profit organisations. So, these organisations prepare Income and Expenditure Account, rather than Profit and Loss Account, which is prepared by profit-making organisations.
Page No 228:
Question 1.D5:
State whether the following statements are True or False.
There is no difference between Receipts and Payment Account and Income and Expenditure Account.
Answer:
False
Explanation: Similar to a Profit & Loss Account, Income and Expenditure Account is prepared to ascertain the surplus/deficit of a concern during the accounting year, whereas Receipts and Payments Account is a summary of the cash book. Income and Expenditure Account is a nominal account that records all revenue expenses and all revenue incomes, while Receipts and Payment Account is a real account that records receipts and payments of capital and revenue nature.
Page No 228:
Question 1.D6:
State whether the following statements are True or False.
All receipts are the items of revenue income.
Answer:
False
Explanation: Receipts can be of capital or revenue nature. Both types of receipts are recorded on the receipt side, i.e. the debit side of the Receipts and Payments Account. However, while revenue receipts are recorded in Income and Expenditure Account, all capital receipts are shown in the Balance Sheet. For example, life membership fees, endowment fund, specific donations and legacies are capital receipts, whereas general donations and miscellaneous receipts are revenue receipts.
Page No 228:
Question 1.D7:
State whether the following statements are True or False.
Income and expenditure account, prepared by ‘Not for Profit’ concerns, must be accompanied by balance sheet.
Answer:
True
Explanation: Income and Expenditure Account is prepared to ascertain the surplus earned/deficit incurred during the accounting year. On the other hand, Balance Sheet is prepared to depict the true financial position of business. Both Income and Expenditure Account and Balance Sheet form a part of the final accounts.
Page No 228:
Question 1.D8:
State whether the following statements are True or False.
In the Income and Expenditure Account, all incomes received during the year irrespective of the year for which they are received, are to be recorded.
Answer:
False
Explanation: Only income related to the current year is recorded in the Income and Expenditure Account, irrespective of whether the income is received in cash or not. In other words, income earned during a year is accounted within that year itself. So, income received in advance will be shown on the Liabilities side of the Balance Sheet and is also deducted from the total amount received during the year. On the other hand, income earned but not received (i.e. outstanding income) is shown on the Asset side of the Balance Sheet and is also shown on the credit side of Income and Expenditure Account.
Page No 228:
Question 1.D9:
State whether the following statements are True or False.
The final balancing amount of Income and Expenditure Account represents either surplus or Deficit.
Answer:
True
Explanation: Income and Expenditure Account is prepared to ascertain the financial performance of an NPO. If the income side exceeds the expenditure side, the balancing figure is surplus and if the expenditure side exceeds the income side, the balancing amount is regarded as deficit.
Page No 228:
Question 1.D10:
State whether the following statements are True or False.
Receipts and Payments Account do not have any opening balance.
Answer:
False
Explanation: Receipts and Payments Account is a summary of transactions appearing in the Cash Book. It is prepared by not-for-profit organisations at the end of an accounting year. It is a real account, wherein receipts are recorded on the debit side and payments on the credit side. It usually has an opening balance i.e. cash balance and bank balance.
Page No 228:
Question 1:
PRACTICAL PROBLEMS
(Calculation of Drugs Consumed during the year)
From the information given below calculate the amount of Drugs consumed in a hospital, during the year 2012-2013. Show its presentation in Income and Expenditure Account and Balance Sheet as on 31-03-2013.
(i) |
Stock Drugs in Hand |
On 01-04-2012 Rs 25,000 |
|
|
On 31-03-2013 Rs 27,000 |
(ii) |
Drugs purchased during the year |
Rs 1,20,000 |
(iii) |
Bill of drugs payable on 31-03-2013
|
Rs 19,500. |
Answer:
Income and Expenditure Account
for the year ending March 31,2013
|
||||
Dr.
|
|
Cr.
|
||
Expenditure
|
Amount
(Rs)
|
Income
|
Amount (Rs)
|
|
Stock of Drugs Consumed during the year
|
|
|
|
|
Stock of Drugs as on Apr.01,2012
|
25,000
|
|
|
|
Add: Purchases
|
1,20,000
|
|
|
|
Add: Outstanding Bill
|
19,500
|
|
|
|
Less: Stock of Drugs at the end of Mar.31,2013
|
27,000
|
1,37,500
|
|
|
|
|
|
|
Balance Sheet
as on March 31, 2013
|
|||
Liabilities
|
Amount
(Rs)
|
Assets
|
Amount (Rs)
|
|
|
|
|
Outstanding Bill of Drugs
|
19,500
|
Stock of Drugs
|
27,000
|
|
|
|
|
Page No 229:
Question 2:
PRACTICAL PROBLEMS
(Presentation of Subscriptions only)
Balance Sheet as on 01/04/2012
|
|||||
Liabilities
|
Amount
Rs
|
Amount
Rs
|
Assets
|
Amount
Rs
|
Amount
Rs
|
Subscription received in
|
|
|
Outstanding subscriptions
|
|
|
Advance for 2012-2013
|
|
15,000
|
2010-2011
|
20,000
|
|
|
|
|
2011-2012
|
30,000
|
|
|
|
|
|
|
50,000
|
Receipts and Payments Account for the year ending on 31-03-2013
|
||||||
Dr.
|
Cr.
|
|||||
Receipts
|
Amount
Rs
|
Amount
Rs
|
Payments
|
Amount
Rs
|
Amount
Rs
|
|
To subscriptions
|
|
|
|
|
|
|
2010-2011
|
16,000
|
|
|
|
|
|
2011-2012
|
25,000
|
|
|
|
|
|
2012-2013
|
3,30,000
|
|
|
|
|
|
2013-2014
|
19,000
|
|
|
|
|
Adjustment:
Outstanding Subscription for 2012-2013 is Rs 22,000. With the above information present the item 'Subscription’ in Income and expenditure Account and Balance sheet for the year ended on 31st March 2013.
Answer:
Income and Expenditure Account
for the year ending March 31,2013
|
||||
Dr.
|
|
Cr.
|
||
Expenditure
|
Amount
(Rs)
|
Income
|
Amount (Rs)
|
|
|
|
Subscription
|
3,30,000
|
|
|
|
Add: Outstanding at the end
|
22,000
|
|
|
|
Add: Advance in the beginning
|
15,000
|
3,67,000
|
|
|
|
|
Balance Sheet
as on March 31,2013
|
|||
Liabilities
|
Amount
(Rs)
|
Assets
|
Amount (Rs)
|
|
|
Outstanding Subscription
|
|
Subscription Received in Advance at the end
|
15,000
|
(Outstanding for 2010-11 is Rs 4,000 + outstanding for 2011-12 + Rs 5,000 and Outstanding for2 012-13 is Rs 22,000)
|
31,000
|
|
|
|
|
Page No 229:
Question 3:
PRACTICAL PROBLEMS
(Presentation of Subscriptions only)
With the information given below regarding ‘Subscription’ give accounting effects of it in the Final Accounts of a ‘Not for Profit’ concern.
Receipts and Payments Account for year ending on 31-03-2013
|
||||||
Dr.
|
Cr.
|
|||||
Receipts
|
Amount
Rs
|
Amount
Rs
|
Payments
|
Amount
Rs
|
Amount
Rs
|
|
To subscriptions received
|
|
4,87,500
|
|
|
|
Additional Information:
• Subscription received during the year, includes
• Subscriptions received for 2011-2012 Rs 17,500 and for 2013-2014 Rs 15,000
• There are 500 members of the concern and each member pays Rs 1,000 as annual subscription.
• During the year 2011-2012 subscription received for the year 2012-2013 was Rs 25,000.
Answer:
Subscription Account |
|||||
Dr. |
Cr. |
||||
Particulars |
Amount (Rs) |
Particulars |
Amount (Rs) |
||
|
|
|
|
||
Outstanding Subscription for 2011-12 |
17,500 |
Received in advance in 2011-12 for 2012-13 |
25,000 |
||
|
|
|
|
||
Income and Expenditure A/c (500 × 1,000) |
5,00,000 |
Bank A/c (given) |
4,87,500 |
||
|
|
|
|
||
|
|
Outstanding Subscription for 2012-13 (Balancing figure) |
20,000 |
||
|
|
|
|
||
Received in advance for 2013-14 |
15,000 |
|
|
||
|
5,32,500 |
|
5,32,500 |
||
|
|
|
|
Page No 230:
Question 4:
PRACTICAL PROBLEMS
(Simple Problem)
With the information given below, prepare Income and Expenditure Account and Balance sheet of Sudarshan charitable Organisation for the year ending on 31-03-2012.
Receipts and Payment Account for the year ending on 31-03-2012
|
|||||||
Dr.
|
|
Cr. |
|||||
Receipts
|
Amount
Rs
|
Amount
Rs
|
Payments
|
Amount
Rs
|
Amount
Rs
|
||
To Balance b/d
|
|
|
By Salaries
|
|
18,000
|
||
Cash in Hand
|
500
|
|
By Printing and stationery
|
|
20,000
|
||
Cash at Bank
|
39,500
|
40,000
|
By Charity Expenses
|
|
20,000
|
||
To Subscriptions
|
|
81,000
|
By Investments
|
|
60,000
|
||
(includes Rs 5,500 for 2009-10)
|
|
|
By Office expenses
|
|
2,000
|
||
Interest on Investments
|
|
1,800
|
By Balance c/d
|
|
|
||
To Sale of Furniture
|
|
8,000
|
Cash in Hand
|
700
|
|
||
(Book Value Rs 10,000)
|
|
|
Cash at Bank
|
10,100
|
10,800
|
||
|
|
1,30,800
|
|
|
1,30,800
|
||
|
|
|
|
|
|
Additional Information:
1) There are Rs 800 members, paying annual subscription Rs 100 each.
2) Outstanding salary Rs 2,000.
3) The Assets on 01-04-2012 were as following:
Furniture Rs 40,000, Investment Rs 20,000, Land Rs 1,00,000
4) On 01-04-2012 Capital Fund was Rs 2,05,500
Answer:
Sudarshan Charitable Organisation
Income and Expenditure Account
for the year ending March 31,2012
|
||||
Dr.
|
|
Cr.
|
||
Expenditure
|
Amount
(Rs)
|
Income
|
Amount (Rs)
|
|
Printing and Stationery
|
20,000
|
Subscription (800 × 100)
|
80,000
|
|
Charity Expenses
|
20,000
|
Interest on Investments
|
1,800
|
|
Office Expenses
|
2,000
|
|
|
|
Loss on Sale of Furniture
|
2,000
|
|
|
|
Salaries paid
|
18,000
|
|
|
|
Add: Salaries Outstanding
|
2,000
|
20,000
|
|
|
Surplus (Excess of Income over Expenditure)
|
17,800
|
|
|
|
|
81,800
|
|
81,800
|
|
|
|
|
|
Balance Sheet
as on March 31, 2012
|
|||||
Liabilities
|
Amount
(Rs)
|
Assets
|
Amount (Rs)
|
||
Capital Fund
|
|
Furniture
|
40,000
|
|
|
Opening Balance
|
2,05,500
|
|
Less: Sale
|
10,000
|
30,000
|
Add: Surplus
|
17,800
|
2,23,300
|
Investment
|
20,000
|
|
Salaries Outstanding
|
2,000
|
Add: Further Investments
|
60,000
|
80,000
|
|
|
|
Land
|
1,00,000
|
||
|
|
Outstanding Subscription
|
4,500
|
||
|
|
Cash in hand
|
700
|
||
|
|
Cash in Bank
|
10,100
|
||
|
2,25,300
|
|
2,25,300
|
||
|
|
|
|
Total amount of subscription due for 2011-2012
|
||||
No. of Members
|
×
|
Annual Subscription
|
||
800
|
×
|
Rs 100
|
=
|
Rs 80,000
|
Less: Amount actually received (Rs 81,000-Rs 5,500 for 2009-10)
|
=
|
Rs 75,500
|
||
Subscription Outstanding at the end of the year
|
=
|
Rs 4,500
|
Page No 230:
Question 5:
PRACTICAL PROBLEMS
(Newly started Associations)
Following is the Receipts and Payments Account of Bavdhan Pensioners Association newly started on 01.04.2010.
Receipts and Payment Account for the year ending on 31-03-2011
|
|||||||
Dr.
|
|
Cr. |
|||||
Receipts
|
Amount
Rs
|
Amount
Rs
|
Payments
|
Amount
Rs
|
Amount
Rs
|
||
To Subscriptions received
|
|
|
By rent
|
|
6,000
|
||
For 2010-2011
|
85,000
|
|
By Travelling Expenses
|
|
2,800
|
||
For 2011-2012
|
6,900
|
|
By Expenses for get-together
|
|
|
||
For 2012-2013
|
2,000
|
|
Function
|
|
3,300
|
||
|
|
93,900
|
By Charity
|
|
1,000
|
||
To Entrance Fees
|
|
11,000
|
By Salaries
|
|
4,500
|
||
To Donations
|
|
25,000
|
By Furniture
|
|
30,500
|
||
|
|
|
By Fixed Deposit
|
|
50,000
|
||
|
|
|
By Balance c/d
|
|
31,800
|
||
|
|
1,29,900
|
|
|
1,29,900
|
||
|
|
|
|
|
|
Adjustments:
1) Outstanding Subscription for current year Rs 10,000.
2) Entrance Fees are to be capitalized.
3) ‘Capital Fund’ should be created out of Entrance Fees and Surplus of the current year’.
4) Depreciate Furniture by Rs 2,500.
You are required to prepare Income and Expenditure Account for the year ending on 31/03/2011 and Balance Sheet as on that date.
Answer:
Bavdhan Pensioners Association
Income and Expenditure Account
for the year ending March 31,2011
|
||||
Dr.
|
Cr.
|
|||
Expenditure
|
Amount
(Rs)
|
Income
|
Amount (Rs)
|
|
Printing and Stationery
|
|
Subscription
|
85,000
|
|
Rent Paid
|
6,000
|
Add: Outstanding at the end
|
10,000
|
95,000
|
Expenses for Get-Together Function
|
3,300
|
General Donation
|
25,000
|
|
Travelling Expenses
|
2,800
|
|
|
|
Charity
|
1,000
|
|
|
|
Depreciation on Furniture
|
2,500
|
|
|
|
Salaries paid
|
4,500
|
|
|
|
Surplus (Excess of Income over Expenditure)
|
99,900
|
|
|
|
|
1,20,000
|
|
1,20,000
|
|
|
|
|
|
Balance Sheet
as on March 31,2011
|
|||||
Liabilities
|
Amount
(Rs)
|
Assets
|
Amount (Rs)
|
||
Capital Fund
|
|
Furniture
|
30,500
|
|
|
Entrance Fees
|
11,000
|
|
Less: Depreciation
|
2,500
|
28,000
|
Add: Donation
|
99,900
|
1,10,900
|
Fixed Assets
|
50,000
|
|
Subscription received in advance
|
8,900
|
Outstanding Subscription
|
10,000
|
||
|
|
Cash in hand
|
31,800
|
||
|
1,19,800
|
|
1,19,800
|
||
|
|
|
|
Page No 231:
Question 6:
PRACTICAL PROBLEMS
(Only Income and Expenditure Account)
The following is the Receipts and Payments Account of Star Citizen’s Association, Bilaspur for the year ending on 31/03/2012.
Receipts and Payment Account for the year ending on 31/03/2012
|
||||||
Dr.
|
Cr.
|
|||||
Receipts
|
Amount
Rs
|
Amount
Rs
|
Payments
|
Amount
Rs
|
Amount
Rs
|
|
To Balance b/d
|
|
5,500
|
By Postage and Telegram
|
|
1,500
|
|
To Subscriptions
|
|
|
By Stationary Purchased
|
|
6,000
|
|
2010-2011
|
3,900
|
|
By Fixed Deposits
|
|
1,00,000
|
|
2011-2012
|
81,500
|
|
By Picnic Expenses
|
|
7,900
|
|
2012-2013
|
2,500
|
87,900
|
By Salaries
|
|
20,000
|
|
To Entrance Fees
|
|
2,000
|
By Annual General -
|
|
|
|
(to be Capitalized)
|
|
|
meeting expenses
|
|
4,500
|
|
To Donations
|
|
50,000
|
By Insurance Premium
|
|
3,450
|
|
To Legacies
|
|
10,000
|
By Sundry Expenses
|
|
4,800
|
|
To Interest on Deposits
|
|
30,000
|
By Furniture
|
|
26,000
|
|
To Picnic Receipts
|
|
5,750
|
By Balance c/d
|
|
17,000
|
|
|
|
1,91,150
|
|
|
1,91,150
|
|
|
|
|
|
|
|
Adjustments:
1) Outstanding Picnic Receipts Rs 4,250.
2) Furniture was purchased on 01/10/2011 and it is to be depreciated @ 10% p.a.
3) Outstanding subscriptions for current year Rs 8,200.
4) Stock of Stationery on 01/04/2011 was Rs 650 and on 31/03/2012 was Rs 1,150.
5) Entries amount of legacies and 50% of Donations are to be capitalized.
With the above information, you are required to prepare Income and Expenditure Account for the year ending on 31/03/2012.
Answer:
Star Citizen Association, Bilaspur
Income and Expenditure Account
for the year ending March 31,2012
|
||||||
Dr.
|
|
Cr.
|
||||
Expenditure
|
Amount
(Rs)
|
Income
|
Amount (Rs)
|
|||
Stationery
|
|
Subscription
|
81,500
|
|
||
Stock of Stationery as on Apr,01,2011
|
650
|
|
Add: Outstanding at the end
|
8,200
|
89,700
|
|
Add: Purchases
|
6,000
|
|
Donations (50% Capitalised)
|
25,000
|
||
Less: Stock of Stationery as on Mar.31,2012
|
1,150
|
5,500
|
Interest on Deposits
|
30,000
|
||
Sundry Expenses
|
4,800
|
Picnic Receipts
|
5,750
|
|
||
Postage and Telegram
|
1,500
|
Add: Outstanding
|
4,250
|
10,000
|
||
Annual General Meeting Expenses
|
4,500
|
|
|
|||
Insurance Premium
|
3,450
|
|
|
|||
Depreciation on Furniture
|
1,300
|
|
|
|||
Picnic Expenses
|
7,900
|
|
|
|||
Salaries paid
|
20,000
|
|
|
|||
Surplus (Excess of Income over Expenditure)
|
1,05,750
|
|
|
|||
|
1,54,700
|
|
1,54,700
|
|||
|
|
|
|
Working Notes:
Furniture Purchased on 01/10/2011 for Rs 26,000
Depreciation for 6 months @ 10% p.a. Rs 1,300
(01/10/2011 to 31/03/2012)
Page No 232:
Question 7:
PRACTICAL PROBLEMS
(Outstanding Expenses and Prepaid Expenses)
From the following information supplied to you, prepare Income and Expenditure Account for the year ending on 31/03/2013 and Balance Sheet as on that date for Suryodaya Club, Nasik.
Balance Sheet as on 01/04/2012
|
|||
Liabilities
|
Amount
Rs
|
Assets
|
Amount
Rs
|
Capital Fund
|
50,000
|
Land
|
60,000
|
Bank Overdraft
|
35,000
|
Outstanding Subscriptions
|
5,000
|
Outstanding Salary
|
2,000
|
Prepaid Insurance Premium
|
2,500
|
|
|
Cash in Hand
|
9,500
|
|
|
Furniture
|
10,000
|
|
87,000
|
|
87,000
|
|
|
|
|
Receipts and Payments Account for the year ending 31.03.2013
|
||||||
Dr.
|
|
Cr. |
||||
Receipts
|
Amount
Rs
|
Payments
|
Amount
Rs
|
|||
To Balance b/d
|
9,500
|
By Bank Overdraft (Repaid)
|
35,000
|
|||
To Subscription
|
95,000
|
By Salary
|
12,500
|
|||
To Admission Fees
|
7,500
|
By Insurance Premium
|
8,000
|
|||
|
|
By Interest
|
1,700
|
|||
|
|
By Miscellaneous Expenses
|
4,400
|
|||
|
|
By Furniture
|
20,000
|
|||
|
|
By Balance c/d
|
|
|||
|
|
Cash in Hand
|
5,400
|
|
||
|
|
Cash at Bank
|
25,000
|
30,400
|
||
|
1,12,000
|
|
1,12,000
|
|||
|
|
|
|
Adjustments:
1) Subscriptions received, includes Rs 3,000 for 2011-2012 and Outstanding Subscriptions for 2012-2013 was Rs 8,000.
2) Salary Paid includes Rs 2,000 Paid for last year
3) On 31/03/2013, Prepaid Insurance Premium was Rs 3,000
4) Admissions Fees are to be capitalized.
5) Depreciate Furniture by Rs 2,000
Answer:
Suryodaya Club, Nasik
Income and Expenditure Account
for the year ending March 31,2013
|
|||||
Dr.
|
|
Cr.
|
|||
Expenditure
|
Amount
(Rs)
|
Income
|
Amount (Rs)
|
||
Depreciation on Furniture
|
2,000
|
Subscription
|
95,000
|
|
|
Less: Outstand. in the beg. | 3,000 | ||||
Miscellaneous Expenses
|
4,400
|
Add: Outstand. at the end
|
10,000
|
1,02,000
|
|
Interest
|
|
1,700
|
|
|
|
Insurance Premium
|
8,000
|
|
|
|
|
Less: Prepaid at the end
|
3,000
|
|
|
|
|
Add: Prepaid at the beginning
|
2,500
|
7,500
|
|
|
|
Salaries paid
|
12,500
|
|
|
|
|
Less: Salaries Outstanding at the end
|
2,000
|
|
|
|
|
Add: Outstanding in the beginning
|
2,000
|
12,500
|
|
|
|
Surplus (Excess of Income over Expenditure)
|
73,900
|
|
|
||
|
1,02,000
|
|
1,02,000
|
||
|
|
|
|
Balance Sheet
as on March 31,2013
|
|||||
Liabilities
|
Amount
(Rs)
|
Assets
|
Amount (Rs)
|
||
Capital Fund
|
|
Furniture
|
10,000
|
|
|
Opening Balance
|
50,000
|
|
Add: Purchases
|
20,000
|
|
Add: Admission Fees
|
7,500
|
|
Less: Depreciation
|
2,000
|
28,000
|
Add: Surplus
|
73,900
|
1,31,400
|
Subscription Outstanding
|
|
|
|
|
For 2011-12
|
2,000
|
|
|
|
|
For 2012-13
|
8,000
|
10,000
|
|
|
|
Prepaid Insurance
|
3,000
|
||
|
|
Land
|
60,000
|
||
|
|
Investment in Securities
|
|
||
|
|
Stock of Food Stuff
|
|
||
|
|
Cash in Hand
|
5,400
|
||
|
|
Cash at Bank
|
25,000
|
||
|
1,31,400
|
|
1,31,400
|
||
|
|
|
|
Page No 232:
Question 8:
PRACTICAL PROBLEMS
(Accounting of a School)
From the information given below of Jeevan Vikas Vidyalaya Khamgaon, You are required to prepare, Income and Expenditure Account and Balance Sheet for the year ending on 31.03.2011.
Balance Sheet as at 01.04.2010
|
|||
Liabilities
|
Amount
Rs
|
Assets
|
Amount
Rs
|
Capital Fund
|
4,99,100
|
Library Books
|
1,15,500
|
Loan
|
5,00,000
|
Laboratory Equipments
|
1,25,000
|
|
|
Furniture
|
1,10,000
|
|
|
Building
|
6,25,000
|
|
|
Cash in Hand
|
3,500
|
|
|
Cash at Bank
|
20,100
|
|
9,99,100
|
|
9,99,100
|
|
|
|
|
Receipts and Payments Account for the year ending 31.03.2011
|
|||||
Dr.
|
Cr.
|
||||
Receipts
|
Amount
Rs
|
Payments
|
Amount
Rs
|
||
To Balance b/d
|
|
By Salaries
|
6,25,200
|
||
Cash in Hand
|
3,500
|
By Purchases
|
|
||
Cash at Bank
|
20,100
|
i. Laboratory Equipments
|
10,000
|
|
|
To Tuition Fees
|
3,67,500
|
ii. Library Books
|
50,000
|
|
|
To Term Fees
|
35,000
|
iii. Furniture
|
20,000
|
80,000
|
|
To Admission Fees
|
30,600
|
By Sundry Expenses
|
10,000
|
||
To Government Grant (Revenue)
|
3,50,000
|
By Printing and Stationery
|
35,800
|
||
To Sundry Receipts
|
1,300
|
By Annual Social
|
|
||
|
|
Gathering Expenses
|
18,000
|
||
|
|
By Balance c/d
|
|
||
|
|
Cash in Hand
|
4,000
|
||
|
|
Cash at Bank
|
35,000
|
||
|
8,08,000
|
|
8,08,000
|
||
|
|
|
|
Adjustments:
1) Tuition Fees Outstanding Rs 13,500
2) Outstanding Interest on Loan Rs 60,000
3) Entire admission Fees are to be Capitalized.
4) Depreciation is to be written off as under:
Library Books Rs 50,000 |
Furniture Rs 30,000 |
Laboratory Equipment Rs 20,000 |
Building Rs 30,000 |
Answer:
Jivan Vikas Vidyalaya, Khamgaon
Income and Expenditure Account
for the year ending March 31,2011
|
|||||
Dr.
|
Cr.
|
||||
Expenditure
|
Amount
(Rs)
|
Income
|
Amount (Rs)
|
||
Printing and Stationery
|
35,800
|
Tuition Fess
|
3,67,500
|
|
|
Sundry Expenses
|
10,000
|
Less: Outstanding at the end
|
13,500
|
3,81,000
|
|
Annual Social Gathering Expenses
|
18,000
|
Term Fees
|
35,000
|
||
Outstanding Interest on Loan
|
60,000
|
Government Grants
|
3,50,000
|
||
Salaries paid
|
6,25,200
|
Sundry Receipts
|
1,300
|
||
Depreciation on:
|
|
Deficit (Excess of Expenditure over Income)
|
1,11,700
|
||
Furniture
|
30,000
|
|
|
|
|
Library Books
|
50,000
|
|
|
|
|
Laboratory Equipment
|
20,000
|
|
|
|
|
Building
|
30,000
|
1,30,000
|
|
|
|
|
8,79,000
|
|
8,79,000
|
||
|
|
|
|
Balance Sheet
as on March 31,2011
|
|||||
Liabilities
|
Amount
(Rs)
|
Assets
|
Amount (Rs)
|
||
Capital Fund
|
|
Furniture
|
1,10,000
|
|
|
Opening Balance
|
4,99,100
|
|
Add: Purchases
|
20,000
|
|
Add: Admission Fess
|
30,600
|
|
|
1,30,000
|
|
Less: Deficit
|
1,11,700
|
4,18,000
|
Less: Depreciation
|
30,000
|
1,00,000
|
Loan
|
5,00,000
|
Outstanding Tuition Fees
|
13,500
|
||
Outstanding Interest on Loan
|
60,000
|
Library Books
|
1,15,500
|
|
|
|
|
Add: Purchases
|
50,000
|
|
|
|
|
Less: Depreciation
|
50,000
|
1,15,500
|
|
|
|
Laboratory Equipment
|
1,25,000
|
|
|
|
|
Add: Purchases
|
10,000
|
|
|
|
|
Less: Depreciation
|
20,000
|
1,15,000
|
|
|
|
Building
|
6,25,000
|
|
|
|
|
Less: Depreciation
|
30,000
|
5,95,000
|
|
|
|
Investment in Securities
|
|
||
|
|
Stock of Food Stuff
|
|
||
|
|
Cash in Hand
|
4,000
|
||
|
|
Cash in Bank
|
35,000
|
||
|
9,78,000
|
|
9,78,000
|
||
|
|
|
|
Page No 233:
Question 9:
PRACTICAL PROBLEMS
(Accounts of a Charitable Hospital)
Following information has been provided by “Janseva Charitable Hospital”, Latur. You are required to prepare Income and Expenditure Account for the year ending on 31/03/2013 and Balance Sheet as on that date.
Balance Sheet as on 01/04/2012
|
|||
Liabilities
|
Amount
Rs
|
Assets
|
Amount
Rs
|
Capital Fund
|
10,37,000
|
Building
|
10,00,000
|
Bank Loan
|
6,00,000
|
Ambulance
|
3,50,000
|
Outstanding bill for Drugs
|
45,000
|
Stock of Drugs
|
35,000
|
|
|
Hospital Equipments
|
2,95,000
|
|
|
Cash in Hand
|
2,000
|
|
16,82,000
|
|
16,82,000
|
|
|
|
|
Receipts and Payments Account for the year ending 31.03.2013
|
||||
Dr.
|
Cr.
|
|||
Receipts
|
Amount
Rs
|
Payments
|
Amount
Rs
|
|
To Balance b/d
|
2,000
|
By Purchases of Drugs
|
1,90,000
|
|
To subscription
|
2,10,000
|
By Salary of staff
|
85,000
|
|
To Life Membership Fees
|
27,500
|
By Honararium to Doctors
|
3,85,000
|
|
To Hospital Receipts
|
5,20,900
|
By Repairs and Maintenance
|
17,900
|
|
(Revenue)
|
|
By Furniture
|
40,000
|
|
|
|
By General Expenses
|
12,600
|
|
|
|
By Balance c/d
|
29,900
|
|
|
7,60,400
|
|
7,60,400
|
|
|
|
|
|
Adjustments:
1) On 31/03/2013 stock of Drugs was valued Rs 20,000.
2) Depreciate Building @ 5% p.a. and Ambulance by Rs 20,000
3) Life Membership Fees are to be capitalized.
Answer:
Janseva Charitable Hospital, Latur
Income and Expenditure Account
for the year ending March 31, 2013
|
||||
Dr.
|
|
Cr.
|
||
Expenditure
|
Amount
(Rs)
|
Income
|
Amount (Rs)
|
|
Drugs Consumed during the year
|
|
Subscription
|
2,10,000
|
|
Stock as on Apr.01,2012
|
35,000
|
|
Hospital Receipts
|
5,20,900
|
Add: Purchases
|
1,90,000
|
|
Deficit (Excess of Expenditure over Income)
|
44,600
|
Less: Stock as on Mar.31,2013
|
20,000
|
2,05,000
|
|
|
Repairs and Maintenance
|
17,900
|
|
|
|
Honorarium to Doctors
|
3,85,000
|
|
|
|
General Expenses
|
12,600
|
|
|
|
Depreciation:
|
|
|
|
|
Building
|
50,000
|
|
|
|
Ambulance
|
20,000
|
70,000
|
|
|
Salaries to Staff
|
85,000
|
|
|
|
|
7,75,500
|
|
7,75,500
|
|
|
|
|
|
Balance Sheet
as on March 31, 2013
|
|||||
Liabilities
|
Amount
(Rs)
|
Assets
|
Amount (Rs)
|
||
Capital Fund
|
|
Furniture
|
|
40,000
|
|
Opening Balance
|
10,37,000
|
|
Building
|
10,00,000
|
|
Add: Life Membership Fees
|
27,500
|
|
Less: Depreciation
|
50,000
|
9,50,000
|
Less: Deficit
|
44,600
|
10,19,900
|
Ambulance
|
3,50,000
|
|
Bank Loan
|
6,00,000
|
Less: Depreciation
|
20,000
|
3,30,000
|
|
Outstanding Bill for Drugs
|
45,000
|
Hospital Equipment
|
2,95,000
|
||
|
|
Stock of Drugs
|
20,000
|
||
|
|
Cash in Hand
|
29,900
|
||
|
16,64,900
|
|
16,64,900
|
||
|
|
|
|
Page No 234:
Question 10:
PRACTICAL PROBLEMS
Following is the accounting information for the year 2009-2010 of Cricket Club, Pune, You are required to prepare Income and Expenditure Account as on 31.03.2010 and Balance Sheet as on that date.
Balance Sheet as on 01.04.2009
|
||||
Liabilities
|
Amount
Rs
|
Assets
|
Amount
Rs
|
|
Capital Fund
|
67,100
|
Land
|
1,20,000
|
|
Building Fund
|
54,000
|
Sports Material
|
32,000
|
|
Bank Overdraft
|
37,400
|
Cash in Hand
|
2,200
|
|
|
|
Outstanding Subscriptions
|
|
|
|
|
2007-2008
|
Rs 1,800
|
|
|
|
2008-2009
|
Rs 2,500
|
4,300
|
|
1,58,500
|
|
1,58,500
|
|
|
|
|
|
Receipts and Payments Account for year ending on 31-03-2010
|
||||||
Dr.
|
Cr.
|
|||||
Receipts
|
Amount
Rs
|
Amount
Rs
|
Payments
|
Amount
Rs
|
Amount
Rs
|
|
To Balance b/d
|
|
2,200
|
Bank Overdraft (repaid)
|
|
37,400
|
|
(cash in Hand)
|
|
|
By Salaries
|
|
25,600
|
|
To subscription
|
|
|
By Electricity Charges
|
|
2,250
|
|
2007-2008
|
1,800
|
|
By Rent and Taxes
|
|
1,750
|
|
2008-2009
|
2,500
|
|
By Printing and Stationery
|
|
5,100
|
|
2009-2010
|
65,500
|
69,800
|
By Entertainment Expenses
|
|
8,700
|
|
To Donations
|
|
11,000
|
31/03/2010
|
|
|
|
To Entertainment Receipts
|
|
8,800
|
By Balance c/d
|
|
|
|
To Entrance Fees
|
|
2,000
|
Cash in Hand
|
|
3,000
|
|
|
|
|
Cash at Bank
|
|
10,000
|
|
|
|
93,800
|
|
|
93,800
|
|
|
|
|
|
|
|
Adjustments:
1) Donation are received for Building Fund.
2) Entrance Fees are to be Capitalized.
3) Outstanding Subscription Rs 1,500.
4) Depreciate sport Material @ 12 1/2% p.a.
Answer:
Cricket Club, Pune
Income and Expenditure Account
for the year ending March 31,2010
|
||||
Dr.
|
|
Cr.
|
||
Expenditure
|
Amount
(Rs)
|
Income
|
Amount (Rs)
|
|
Printing and Stationery
|
5,100
|
Subscription
|
65,500
|
|
Salaries paid
|
25,600
|
Add: Outstanding at the end
|
1,500
|
67,000
|
Electricity Charges
|
2,250
|
Entertainment Receipts
|
8,800
|
|
Rent and Taxes
|
1,750
|
General Donation
|
|
|
Entertainment Expenses
|
8,700
|
|
|
|
Depreciation on Sports Material
|
4,000
|
|
|
|
Surplus (Excess of Income over Expenditure)
|
28,400
|
|
|
|
|
75,800
|
|
75,800
|
|
|
|
|
|
Balance Sheet
as on March 31,2010
|
|||||
Liabilities
|
Amount
(Rs)
|
Assets
|
Amount (Rs)
|
||
Capital Fund
|
|
Sports Material
|
32,000
|
|
|
Opening Balance
|
67,100
|
|
Less: Depreciation
|
4,000
|
28,000
|
Add: Surplus
|
28,400
|
95,500
|
Land
|
1,20,000
|
|
Building Fund
|
54,000
|
|
Subscription Outstanding
|
1,500
|
|
Add: Donations
|
11,000
|
65,000
|
Cash in Hand
|
3,000
|
|
Entrance Fees
|
2,000
|
Cash at Bank
|
10,000
|
||
|
1,62,500
|
|
1,62,500
|
||
|
|
|
|
Page No 235:
Question 11:
PRACTICAL PROBLEMS
From the following Receipts and Payments Account of Nanasaheb Patil Engineering College, Faizpur for the year ending 31 March 2013 and additional information, Prepare Income and Expenditure Account for year ending 31/03/2013 and a Balance Sheet as on that date.
Receipts and Payments Account for the year ending 31.03.2013
|
||||
Dr.
|
Cr.
|
|||
Receipts
|
Amount
Rs
|
Payments
|
Amount
Rs
|
|
To Balance b/d
|
|
By Salaries to
|
|
|
Cash in Hand
|
15,950
|
• Teaching Staff
|
8,50,500
|
|
Cash at Bank
|
1,00,070
|
• Office Staff
|
1,81,000
|
|
To Interest
|
51,000
|
By Electricity
|
51,900
|
|
To Subscriptions
|
25,800
|
By Books
|
57,800
|
|
To Life Membership Fees
|
20,500
|
By Furniture
|
45,000
|
|
To Donations
|
6,36,000
|
By Stationery
|
19,950
|
|
To tuition Fees
|
11,20,000
|
By Fixed Deposit
|
7,50,000
|
|
To Term Fees
|
2,00,900
|
31/03/2013
|
|
|
To Admission Fees
|
55,000
|
By Balance c/d
|
|
|
To Sundry Receipts
|
6,930
|
Cash in Hand
|
13,500
|
|
|
|
Cash at Bank
|
2,62,500
|
|
|
22,32,150
|
|
22,32,150
|
|
|
|
|
|
Additional Information:
1)
Particulars |
01/04/2012 |
31/03/2013 |
Books |
5,50,000 |
5,50,000 |
Furniture |
2,15,000 |
2,00,000 |
Building Fund |
9,35,000 |
? |
Fixed Deposits |
8,00,000 |
? |
Capital Fund |
7,46,020 |
? |
2) 50% of Donations are for Building Fund and the balance is to be treated as revenue income.
3) Outstanding Subscription Rs 4,200.
4) Life Membership Fees are to be capitalized.
Answer:
Nanasaheb Patil Engineering College, Faizpur
Income and Expenditure Account
for the year ending March 31,2013
|
|||||
Dr.
|
Cr.
|
||||
Expenditure
|
Amount
(Rs)
|
Income
|
Amount (Rs)
|
||
Electricity
|
51,900
|
Subscription
|
25,800
|
|
|
Depreciation on:
|
|
Add: Advance in the beginning
|
4,200
|
30,000
|
|
Furniture
|
60,000
|
|
Sundry Receipts
|
6,930
|
|
Books
|
57,800
|
1,17,800
|
Interest
|
51,000
|
|
Salaries paid to:
|
|
Donation
|
3,18,000
|
||
Teachers
|
8,50,500
|
|
Tuition Fees
|
11,20,000
|
|
Staff
|
1,81,000
|
10,31,500
|
Term Fees
|
2,00,900
|
|
Stationery
|
19,950
|
Admission Fees
|
55,000
|
||
Surplus (Excess of Income over Expenditure)
|
5,60,680
|
|
|
||
|
17,81,830
|
|
17,81,830
|
||
|
|
|
|
Balance Sheet
as on March 31,2013
|
|||||
Liabilities
|
Amount
(Rs)
|
Assets
|
Amount (Rs)
|
||
Capital Fund
|
|
Furniture
|
2,15,000
|
|
|
Opening Balance
|
7,46,020
|
|
Add: Purchases
|
45,000
|
|
Add: Life Membership Fees
|
20,500
|
|
|
2,60,000
|
|
Add: Surplus
|
5,60,680
|
13,27,200
|
Less: Depreciation
|
60,000
|
2,00,000
|
Building Fund
|
9,35,000
|
|
Books
|
5,50,000
|
|
Add: Donation
|
3,18,000
|
12,53,000
|
Add: Purchases
|
57,800
|
|
|
|
Less: Depreciation
|
57,800
|
5,50,000
|
|
|
|
Subscription Outstanding
|
4,200
|
||
|
|
Fixed Deposits
|
8,00,000
|
|
|
|
|
Add: Investments
|
7,50,000
|
15,50,000
|
|
|
|
Cash in Hand
|
13,500
|
||
|
|
Cash at Bank
|
2,62,500
|
||
|
25,80,200
|
|
25,80,200
|
||
|
|
|
|
Working Notes:
WN1: Calculation of Depreciation on Furniture:
Depreciation on Furniture = Furniture as on Apr. 01, 2012 + Purchases - Furniture as on Mar. 31, 2013
2,15,000 + 45,000 - 2,00,000 = Rs 2,60,000
WN2: Calculation of Depreciation on Books:
Depreciation on Books = Books as on Apr. 01, 2012 + Purchases - Books as on Mar. 31, 2013
5,50,000 + 57,800 - 5,50,000 = Rs 57,800
Page No 236:
Question 12:
PRACTICAL PROBLEMS
(Loss on Sale of Asset)
Following is the Receipts and Payments Account of Chamber of Commerce, Kolhapur, for the year ending 31/03/2012 and some additional information. You are required to prepare the Income and Expenditure Account for the year ending 31/03/2012 and Balance Sheet as at that date.
Receipts and Payments Account for the year ending 31.03.2012
|
||||
Dr.
|
Cr.
|
|||
Receipts
|
Amount
Rs
|
Payments
|
Amount
Rs
|
|
To Balance b/d
|
11,960
|
By Printing and Stationery
|
6,950
|
|
(Cash at Bank)
|
|
By Repairs
|
2,100
|
|
To Subscriptions
|
36,500
|
By Rent
|
8,500
|
|
(including Rs 2,500 for 2010-2011)
|
|
By Books
|
20,000
|
|
To Sale of Furniture
|
12,000
|
By Travelling Expenses
|
2,000
|
|
(Book Value Rs 18,000)
|
|
By Investments
|
40,000
|
|
To Donations
|
27,000
|
By Insurance
|
1,700
|
|
To Admission Fees
|
5,050
|
By Balance c/d
|
11,260
|
|
(Revenue)
|
|
(Cash at Bank)
|
|
|
|
92,510
|
|
92,510
|
|
|
|
|
|
Additional Information:
1)
Particulars |
01-04-2011 |
31-03-2012 |
Outstanding Subscriptions |
3,000 | 5,000 |
Furniture |
32,000 | ? |
Building Fund |
1,45,000 | ? |
Capital Fund |
1,51,960 | ? |
Investments |
2,50,000 | ? |
2) Neglect depreciation on the part of furniture sold during the year. But depreciate the remaining furniture by Rs 1,400.
3) Donation is received for Building Fund.
Answer:
Chamber of Commerce, Kollahpur
Income and Expenditure Account
for the year ending March 31,2012
|
||||
Dr.
|
|
Cr.
|
||
Expenditure
|
Amount
(Rs)
|
Income
|
Amount (Rs)
|
|
Printing and Stationery
|
6,950
|
Subscription
|
36,500
|
|
Repairs
|
2,100
|
Less: Outstanding in the beginning
|
2,500
|
|
Rent Paid
|
8,500
|
Add: Outstanding at the end
|
5,000
|
39,000
|
Loss on Sale of Furniture
|
6,000
|
Admission Fees
|
5,050
|
|
Travelling Expenses
|
2,000
|
|
|
|
Insurance
|
1,700
|
|
|
|
Depreciation on Furniture
|
1,400
|
|
|
|
Add: Salaries Outstanding
|
|
|
|
|
Surplus (Excess of Income over Expenditure)
|
15,400
|
|
|
|
|
44,050
|
|
44,050
|
|
|
|
|
|
Balance Sheet
as on March 31,2012
|
|||||
Liabilities
|
Amount
(Rs)
|
Assets
|
Amount (Rs)
|
||
Capital Fund
|
|
Furniture
|
32,000
|
|
|
Opening Balance
|
1,51,960
|
|
Less: Purchases
|
18,000
|
|
Add: Surplus
|
15,400
|
1,67,360
|
|
14,000
|
|
Building Fund
|
1,45,000
|
|
Less: Depreciation
|
1,400
|
12,600
|
Add: Donation
|
27,000
|
1,72,000
|
Subscription Outstanding
|
|
|
|
|
For 2010-11
|
500
|
|
|
|
|
For 2011-12
|
5,000
|
5,500
|
|
|
|
Investment in Securities
|
2,50,000
|
|
|
|
|
Add: Further Investments
|
40,000
|
2,90,000
|
|
|
|
Books
|
20,000
|
||
|
|
Bank
|
11,260
|
||
|
3,39,360
|
|
3,39,360
|
||
|
|
|
|
View NCERT Solutions for all chapters of Class 15