Question

As at March 31, 2017 the following balances have been extracted from the books of the Indian Chartered Accountants Recreation Club and you are asked to prepare (1) Trading Account for ascertaining gross profit derived from running restaurant and dining room and (2) Income and Expenditure Account for the year ended March 31, 2017 (3) and a Balance Sheet as at that date.

Debit Balances	Rs	Credit Balances	Rs
Stock-in-hand	1170	Receipts Dining Room	87660
Purchases	24660	Subscriptions	9450
Dining Room	32370	Billiard's Receipts	7300
Rent	10470	Sunday Receipts	410
Wages	18690	Interest on Fixed Deposit	270
Repairs and Renewals	5400	Sundry Creditors	5310
Fuel and Light	5280	Grant from Institute (permanent)	42000
Misc. Expenses	4050	Income and Exp. A/c (1.4.16)	1380
Cash in hand	560	Suspense A/c (See note)	60
Cash at bank	2760
Fixed Deposit	8500
Sundry Debtors	2250
China glass, cutlery and linen	600
Billiard Table	2070
Fixtures and Fittings	870
Furniture	4140
Club Premises	30000
	1,53,840		1,53,840

On March 31, 2016 stock of restaurant consisted of Rs 900 and Rs 60 respectively. Provide depreciations Rs 60 on fixtures and fittings, Rs 390 on billiard table and Rs 560 on furniture.

Answer 1

Important Note:

1. Credit side of the Trial Balance of the question is short by Rs 60. Thus, in order to tally both sides of the Trial Balance, Suspense Account will be opened with the difference amount of Rs 60.

2. Inthe adjustment, Closing Stock should be Rs 960 instead of Rs 900.

Books of Indian Chartered Accountants Recreation Club
Restaurant Trading Account

Dr.                                                                                   Cr.

Particulars	Amount  (Rs)	Particulars	Amount (Rs)
Opening Stock	1170	Receipts from Dining Room	87,660
Purchases	24660	Closing Stock	960
Dining Room Exp.	32370
Profit from Restaurant	30420
	88620		88620

Income and Expenditure Account 
as on March 31, 2017 

Dr.                                                                                  Cr.

Expenditure		Amount (Rs)	Income	Amount (Rs)
Rent		10470	Subscriptions	9450
Wages		18690	Sundry Receipts	410
Repairs an Renewals		5400	Interest on Fixed Deposits	270
Fuel and Light		5280	Profit from Restaurant	30420
Misc. Expenses		4050	Billiards Receipts	7300
Depreciation on
Fixtures and Fittings	60	1010
Billiards Table	390
Furniture	560
Surplus (Excess of Income over Expenditure)		2950
		47850		47850

Balance Sheet 
as on March 31, 2017 

Liabilities		Amount (Rs)	Assets		Amount (Rs)
Sundry Creditors		5310	Cash in Hand		560
Grant from Institute		42000	Cash at Bank		2760
Suspense		60	Fixed Deposit		8500
Capital Fund (Income and Exp. A/c as on Apr.01, 2016)	1380	4330	Sundry Debtors		2250
Add: Surplus	2950		China Glass, Cutlery and Linen		600
			Billiards Table	2070	1680
			Less: Depreciation	(390)
			Fixture and Fittings	870	810
			Less: Depreciation	(60)
			Furniture	4140	3580
			Less: Depreciation	(560)
			Club Premises		30000
			Stock of Restaurant		960
		51700			51700