Question

Following is the Receipts and Payments account of Neyveli Science Club for the year ended 31^st December, 2018.

Dr.	Receipts and Payments Account for the year ended 31st December, 2018			Cr.
Receipts	₹	Payments	₹	₹
To Balance b/d		By Balance b/d
Cash in hand	2,400	Bank overdraft		1,000
To Subscription	8,700	By Postage expenses		200
To Life membership fees	5,000	By Science equipments purchased		10,000
To Exhibition fund receipts	7,000	By Laboratory expenses		2,400
To Sale of science equipments (Book value ₹ 5,000)	6,000	By Secretary’s honorarium		5,000
To Miscellaneous income	500	By Audit fees		3,600
		By General charges		1,800
		By Exhibition expenses		5,000
		By Balance c/d
		Cash in hand	200
		Cash at bank	400	600
	29,600			29,600

Additional information:

1. Opening capital fund ₹ 6,400
2. Subscription includes ₹ 600 for the year 2019
3. Science equipment as on 1.1.2018 ₹ 5,000
4. Surplus on account of exhibition should be kept in reserve for new auditorium.

Prepare income and expenditure account for the year ended 31^st December, 2018 and the balance sheet as on that date.

Answer 1

Dr.	Income and Expenditure Account for the year ended 31.12.18				Cr.
Expenses	₹	₹	Income	₹	₹
To Postage expenses		200	By Subscription	8,700
To Laboratory expenses		2,400	(−) Recd in Adv.	600	8,100
To Audit fees		3,600	By Profit on sale of Science Equipment		1,000
To General charges		1,800	By Miscellaneous income		500
To Secretary’s honorarium		5,000	By Exhibition fund receipts		7,000
To Exhibition expenses		5,000	By Expenditure Over Income (Deficit)		1,400
		18,000			18,000

Balance Sheet as on 31.12.2018

Liabilities	₹	₹	Assets	₹	₹
Capital Fund	6,400		Science Equipment	5,000
(−) Deficit	1,400	5,000	(+) Purchases	10,000
Subscription Received in Adv.		600		15,000
Life Membership fees		5,000	(−) Sales of Equipment	5,000	10,000
			Cash in Hand		200
			Cash at Bank		400
		10,600			10,600