Question

Following information has been provided by Gajanan Charitable Hospital, Yavatmal. You are required to prepare Income and Expenditure Account for the year ending 31^st March, 2021 and Balance sheet as on that date:

Balance Sheet as on 1st April, 2020
Liabilities	Amount (₹)	Assets	Amount (₹)
Capital Fund:	5,50,000	Hospital Equipments	1,52,000
Bank Loan	3,25,000	Ambulance	2,00,000
Outstanding Bill for drugs	25,000	Building	5,25,000
		Stock of drugs	21,000
		Cash in hand	2,000
	9,00,000		9,00,000

Receipts and Payments Account for the year ended 31st March, 2021
Receipts	Amount (₹)	Payments	Amount (₹)
To Balance b/d	2,000	By Staff salary	42,500
To Life Membership Fees	15,000	By Honorarium to Doctors	2,00,000
To Hospital Receipts (Revenue)	2,55,200	By Repairs	9,000
To Subscriptions	1,11,000	By Furniture	22,500
		By General Expenses	8,000
		By Purchase of Drugs (includes ₹ 20,000 for 2019-2020)	1,00,000
		By Balance C/d	1,200
	3,83,200		3,83,200

Adjustments:

1. Depreciate Building by 5% p.a. and Ambulance by ₹ 15,000.
2. On 31^st March, 2021 Stock of drugs was valued at ₹ 11,000.
3. Life Membership Fees has to be capitalised.

Answer 1

In the books of Gajanan Charitable Hospital, Yavatmal
Dr.	Income and Expenditure Account for the year ended on 31st March, 2021			Cr.
Expenditure	Amount (₹)	Amount (₹)	Income	Amount (₹)
To Drugs consumed		90,000	By Subscriptions	1,11,000
To Op. stock (Drugs)	21,000		By Hospital receipts	2,55,200
(+) Drugs Purchased	1,00,000		By Deficit transferred to capital fund (Bal. Fig.)	24,550
	1,21,000
(–) Payment for L.Y.	20,000
	1,01,000
(–) Cl. stock of Drugs	11,000
To Honorarium to Doctors		2,00,000
To Staff salary		42,500
To Repairs		9,000
To General expenses		8,000
To Depreciation on		41,250
Building	26,250
Ambulance	15,000
		3,90,750		3,90,750

 

Balance Sheet as on 31st March, 2021
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Capital Fund	5,50,000	5,40,450	Hospital Equipments		1,52,000
Add: Life membership fees	15,000		Ambulance	2,00,000	1,85,000
	5,65,000		Less: Depreciation	15,000
Less: Deficit	24,550		Building	5,25,000	4,98,750
Bank loan		3,25,000	Less: Depreciation @ 5% p.a.	26,250
Outstanding bill for drugs (25,000 – 20,000)		5,000	Furniture		22,500
			Cash in hand		1,200
			Stock of drugs		11,000
		8,70,450			8,70,450