Question

​How are the following dealt with while preparing the final accounts of a sports club for the year ended 31st March, 2019?

RECEIPTS AND PAYMENTS ACCOUNT
for the year ended 31st March, 2019

Dr.				Cr.
Receipts		₹	Payments	₹
To Sale of Sports Materials		26,000	​By Creditors for Sports Materials	61,000
(Book value ₹ 20,000)			By Cash purchase of Sports Materials	10,000

Additional information :

	As at 31st March, 2018 (₹)	As at 31st March, 2019 (₹)
Sports Materials	20,000	25,000
Creditors for Sports Materials	7,000	15,000

Answer 1

Income and Expenditure Account for the year ended March 31, 2019
Dr.						Cr.
Expenditure			Amount (₹)	Income	Amount (₹)
Payment for Sports Material		71,000		Profit on Sale of Sports Material (26,000 – 20,000)	6,000
Add: Opening Stock		20,000
Less: Closing Stock		(25,000)
Less: Creditors in the beginning		(7,000)
Add: Creditors at the end		15,000
Less: Book Value of Material Sold		(20,000)	54,000

 

Balance Sheet as on March 31, 2018
Liabilities	Amount (₹)	Assets	Amount (₹)
Creditors for Sport Materials	7,000	Stock of Sport Materials	20,000

 

Balance Sheet as on March 31, 2019
Liabilities	Amount (₹)	Assets	Amount (₹)
Creditors for Sport Materials	15,000	Stock of Sport Materials	25,000