Question

Given below is the balance sheet as on 1st April, 2015 and Receipts and Payments Account for the year ending 31st March, 2016 of Decent sports Club, Kudal.
From the given information prepare Income and Expenditure Account for the year ended 31st March, 2016 and the Balance Sheet as on that date :
                            Balance Sheet as on 1st April, 2015
Dr                                                                                                          Cr

Liabilities	Amount (Rs.)	Assets	Amount (Rs.)
Capital Fund	9,25,000	Play-ground	8,00,000
Building fund	5,00,000	Furniture	36,000
Subscription received in advance for the year		Stock of sports material	44,000
2015 - 2016	9,000	Building fund investment	5,00,000
		Cash at bank	20,000
		Outstanding subscriptions	34,000
	14,34,000		14,34,000

Receipts and Payments Account
for the year ending 31st March, 2016
Dr                                                                                                          Cr

Receipts	Amount (Rs.)	Payments	Amount (Rs.)
To Balance c/d		By Sports material purchased	52,000
Cash in bank	20,000	By salaries and wages	87,000
To Subscription	201,800	By office expenses	126,000
To Donations	56,000	By Telephone charges	12,400
To Admission fees	13,000	By Balance c/d
To Sundry Receipts	2,700	Cash at bank	34,100
To Interest on Investment in building fund	18,000
	3,11,500		3,11,500

Adjustment :
(1) Stock of sports material in hand on 31st March, 2016 was Rs. 48,000.
(2) Admissin fees and donations are to be capitalised.
(3) Subscription received during the year included Rs. 34,000 for previous year and Rs. 10,000 for the next year. Current year's subscription Rs. 29,000 is to be received.

Answer 1

ln the books of Decent Sports Club, Kudal.
lncome and Expenditure Account for the year ended 31st  March, 2016.

Expenditure	Amount (Rs.)	Amount (Rs.)	Income	Amount (Rs.)	Amount (Rs.)
To Depreciation on sports material		48,000	By Subscription	201,800
To Salaries and wages		87,000	(+) Current year subscription received during the last year in advance.	9000 [No Second Effect will Come.]
To Office Expenses		126,000	(-) Last year Amount due Received in Current year	(34000) [No Second Effect will Come.]
To Telephone charges		12,400	( - ) Next year Subscription Received in Advance	(10,000) [No Second Effect will Come.]
			(+) Outstanding Subscription of Current Yearl	29,000 [No Second Effect will Come.]	195800
			By Expenditure Over lncome Deficit		74900
			by sundry Receipts		2700
		273400			273400

Balance Sheet as on 31st March 2016

Liabilities	Amount (Rs.)	Amount (Rs.)	Assets	Amount (Rs.)	Amount (Rs.)
Capital Fund	925,000		Sports Material	96,000
( - ) Defiicit	74,900	8,50,100	(-) Depreciation	(48,000)	48,000 [ Given in 1st Adjustment]
( + ) Admission Fees [See adjustment no 2]		13,000
( + ) Donations [ See adjustment no. 2]		56,000	Cash at Bank		34100
			Playground		800,000
			Furniture		36,000
Builiding Fund	500,000		Building Fund Investment		500,000
( + ) Interest on Investment in Building Fund	18,000	518,000	Outstanding Subscription of Current Year		29,000
Subscription Received in Advance for Next Year		10,000
		1447,100			1447,100

Working Note : Calculation of Closing Value of Sports Material

Opening Balance = 44000 [ Given in Balance Sheet Asset Side]
(+) Additional purchases = 52000 [Given in Payment side of Receipts and payments Account ]
Closing Balance = 44000 + 52000 = 96000 [Show this amount in Asset side inner Column. Because Depreciation is there]

Note : According to our above Working Note Sports Material Should be Rs. 96000.

But, Adjustment No. 1 Says, Stock of Sports Material in hand on 31st March, 2016 was Rs 48000. Therefore, the remaining 48000, That is 96000 - 48000 = 48000, is the depreciation amount.

lmportant Note : The NPO might also create a special fund, such as prize fund, match fund, Building fund, etc. The purpose of which is to meet the expenses related to the purpose for which it is created. The incomes on the amount which is invested from these funds accrue to the fund alone and not the income and expenditure account.