Question

From the following Receipts and Payments account of Shahu College, Kolhapur for the year ending 31st March, 2020 and additional information, prepare Income and Expenditure Account for the year ended 31st March, 2020 and Balance Sheet as on that date:

Dr.	Receipts and Payments Account for the year ended 31st March, 2020		Cr.
Receipts	Amount (₹)	Payments	Amount (₹)
To Balance b/d		By Salaries	11,77,500
Cash	6,000	By Printing and Stationery	13,500
Bank	1,00,000	By Books	44,000
To Interest	30,000	By Furniture	39,000
To Donation	3,50,000	By Drama Expenses	45,000
To Tuition Fees	9,50,000	By Postage	3,500
To Admission Fees	32,500	By Telephone Charges	3,000
To Drama Receipts	50,000	By Electricity	30,500
To Rent from use of Hall	3,000	By Magazine and Newspapers	3,000
To Legacies (Capital)	30,000	By Balance c/d
		Cash	31,000
		Bank	1,61,500
	15,51,500		15,51,500

Additional information:

(1) Outstanding Salaries ₹ 35,000.

(2) 60% of donations are for Building Fund and Balance is to be treated as revenue income.

(3)

Particulars	1 - 4 - 2019 (₹)	31 - 3 - 2020 (₹)
Capital Fund	3,05,500	?
Building Fund	4,13,500	?
Furniture	1,63,000	1,50,000
Books	4,50,000	4,44,000

Answer 1

Dr.	In the books of Shahu College, Kolhapur Income and Expenditure A/c for the Year Ended 31st March, 2020				Cr.
Expenditure		Amount (₹)	Income		Amount (₹)
To Salaries	11,77,500	12,12,500	By Interest		30,000
Add: Outstanding	35,000		By Donations	3,50,000	1,40,000
To Printing and Stationery		13,500	Less: Building Fund	(2,10,000)
To Drama Expenses		45,000	By Tuition Fees		9,50,000
To Postage		3,500	By Admission Fees		32,500
To Telephone Charges		3,000	By Drama Receipts		50,000
To Electricity		30,500	By Rent for use of Hall		3,000
To Magazines and News Papers		3,000	By Deficit c/d		2,07,500
To Depreciation on:
Books	50,000	1,02,000
Furniture	52,000
		14,13,000			14,13,000

 

M/s. Shahu College, Kolhapur Balance Sheet as on 31st March, 2020
Liabilities		Amount (₹)	Assets		Amount (₹)
Capital Fund	3,05,500	1,28,000	Books	4,50,000
Add: Legacies	30,000		Add: New Books	44,000
	3,35,500			4,94,000
Less: Deficit	(2,07,500)		Less: Depreciation (4,94,000 - 4,44,000)	(50,000)	4,44,000
Building fund	4,13,500	6,23,500	Furniture	1,63,000	1,50,000
Add: Donations	2,10,000		Add: New Furniture	39,000
Outstanding Salaries		35,000		2,02,000
			Less: Depreciation	(52,000)
			Cash		31,000
			Bank		1,61,500
		7,86,500			7,86,500

Working Note:

60% of Donation is 3,50,000 × 60% = ₹ 2,10.000

Balance 40% × 3,50,000 = ₹ 1,40,000