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
 
 
 
 

 

Working Notes:
 
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