Question

Following is the Receipts and Payments Account of Parnil Sports Club, Pune and additional information given below you are required to prepare Income and Expenditure Account for the year ended 31st March 2019 and a Balance Sheet as on that date.

Dr.	Receipts and Payments Account for the year ended 31st March, 2019			Cr.
Receipts		Amount (₹)	Payments	Amount (₹)
To Balance b/d		5,000	By Bank Overdraft (Repaid)	32,000
To Subscriptions:			By Salaries	10,000
2016-17	2,000	75,000	By Electrical Charges	4,000
2017-18	3,000		By Municipal Taxes	2,700
2018-19	70,000		By Purchase of Sports Materials	50,000
To Donations		15,000	By General Expenses	500
To Entrance fees		1,700	By Billiard Expenses	3,000
To Life membership fees (Revenue)		17,000	By Repairs to Ground	500
To Tournaments Receipts		60,000	By Tournaments Exp.	50,000
			By Balance c/d:
			Cash in Hand	7,000
			Cash at Bank	14,000
		1,73,700		1,73,700

Additional Information :

1. 50% Donations are towards Building Fund.
2. 70% entrance fees should be capitalised.
3. Subscriptions ₹ 500 for the year 2016-17 ₹ 1,000 for 2017-18 are still in arrears.
4. Following are the balances appeared in the books as on 1-4-2018 :
   Building Fund ₹ 47,000, Bank Overdraft ₹ 32,000, Land ₹ 1,50,000, Sports Materials ₹ 30,000. Outstanding Subscription for 2016-17 is ₹ 2,500 and 2017-18 is ₹ 4,000.
5. Outstanding Subscription for current year is ₹ 8,000.
6. Closing Stock of Sports Material was ₹ 8,000 on which depreciation to be provided at 12.50% p.a.

Answer 1

Dr.	Income and Expenditure A/c for the Year Ended 31st March, 2019				Cr.
Expenditure		Amount (₹)	Income		Amount (₹)
To Salaries		10,000	By Tournament Receipts	60,000	10,000
To Electricity Charges		4,000	Less: Tournament exp.	50,000
To Municipal Taxes		2,700	By Subscriptions	70,000	78,000
To Sports Materials Consumed:			Add: Outstanding	8,000
Opening Stock	30,000	72,000	By Donations	15,000	7,500
Add: Purchases	50,000		Less: 50 % for Building fund	7,500
	80,000		By Entrance fees	1,700	510
Less: Closing Stock	8,000		Less: 70 % Capitalised	1,190
To General Expenses		500	By Life Membership Fee		17,000
To Billiard Expenses		3,000
To Repairs to Ground		500
To Depreciation on Sports Materials		1,000
To Surplus (Excess of Income over Expenditure)		19,310
		1,13,010			1,13,010

Balance Sheet as on 31st March, 2019
Liabilities		Amount (₹)	Assets		Amount (₹)
Capital Fund	1,12,500	1,33,000	Cash in Hand		7,000
Add: 70% Entrance fees	1,190		Cash at Bank		14,000
Add: Surplus	19,310		O/s Subscription
Building Fund	47,000		2016-17	500	9,500
Add: 50 % Donations	7,500	54,500	2017-18	1,000
			2018-19	8,000
			Land		1,50,000
			Sports Materials	8,000	7,000
			Less: 12.5% Depreciation	1,000
		1,87,500			1,87,500

Working Note:

1. Calculation of Capital Fund:

Balance Sheet as on 31st March, 2018
Liabilities	Amount (₹)	Assets		Amount (₹)
Building Fund	47,000	Land		1,50,000
Bank Overdraft	32,000	Sports Materials		30,000
Capital Fund (Balance figure)	1,12,500	O/s Subscription
		2016-17	2,500
		2017-18	4,000	6,500
		Cash in Hand		5,000
	1,91,500			1,91,500

2. Calculation of Depreciation:

12.5% Depreciation of ₹ 8,000

`8,000 xx 12.5/100` = ₹ 1,000