Question

(Newly Started Art Circle)

“Jeevan Jyoti Art Circle” a newly established concern has presented the following information.

Dr	Receipts and Payments Account for the year ending 31.03.2018.						Cr
Receipts		Amount ₹	Amount ₹	Payments	Amount ₹	Amount ₹
To Admission fees			22,000	By Furniture		12,000
To Subscriptions			40,000	By Stationery		4,000
To Donations			18,000	By Office Rent		2,600
				By Newspapers & Periodicals		300
				By Telephone Expenses		560
				By Investments		23,000
				By Balance c/d
				Cash in Hand	7,540
				Cash at Bank	30,000	37,540
			80,000			80,000

Adjustments:

1) Subscription Outstanding for the year was ₹ 5,000

2) Depreciate Furniture @10 % p.a

3) Full amount of Admission Fees and 50*% Donations are to be capitalized.

You are required to prepare Income and Expenditure Account for the year ending 31.03.2018 and Balance Sheet as on that date.

Answer 1

Dr	In the books of Jeevan Jyoti Art Circle Income and Expenditure Account for the year ended 31st March 2018						Cr
Expenditure		Amount ₹	Amount ₹	Income	Amount ₹	Amount ₹
To Stationery			4,000	By Donations	18,000
To Office rent			2,600	Less: 50 % Capitalised	9,000	9,000
To Newspapers and Periodicals			300	By Subscription	40,000
To Telephone Expenses			560	Add: Outstanding of Current Year	5,000	45,000
To Depreciation Furniture			1,200
To Surplus (Excess of income over expenditure)			45,340
			54000			54000

 

Balance Sheet as on 31st March, 2018
Liabilities	Amount ₹	Amount ₹	Assets	Amount ₹	Amount ₹
Capital Fund	-		Furniture	12,000
Add: Surplus	45,340		Less: Depreciation	1,200	10,800
Add: Admission Fees (Capitalised)	22,000		Investments		23,000
Add : Donations (50 % Capitalised)	9,000	76,340	Cash in Hand		7,540
			Cash at Bank		30,000
			Outstanding Subscription		5,000
		76,340			76,340

Working Notes:

The full amount of admission fees and 50% of donations are added to the surplus amount to get the capital funds. (Opening balance of the capital fund is not given.)