Question

From the following Receipts and Payments Account of ‘Rampur High School, Ratnagiri for the year ending 31st March, 2022 and additional information, prepare Income and Expenditure Account for the year ended 31st March, 2022 and a Balance Sheet as on that date.

Dr.	Receipts and Payments Account For the year ending 31st March, 2022				Cr.
Receipts	Amount (₹)	Amount (₹)	Payments	Amount (₹)	Amount (₹)
To Balance b/d		4,24,000	By Salary of staff		47,10,000
Cash	24,000		By Printing and stationery		68,000
Bank	4,00,000		By Books		1,76,000
To Interest		1.32,000	By Furniture (Purchased on 01.01.2022)		1,56,000
To Donation		14,00,000	By Drama expenses		1,80,000
To Tuition fees		30,00,000	By Electricity charges		1,34,000
To Admission fees		9,30,000	By Magazines and Newspapers		12,000
To Drama receipts		2,00,000	By Balance c/d		7,70,000
To Legacies (Capital)		1,20,000	Cash	1,24,000
			Bank	6,46,000
		62,06,000			62,06,000

Additional Information:

1. Particulars	1st April 2021 (₹)	31st March 2022 (₹)
   Books	18,00,000	17,76,000
   Furniture	6,52,000	6,00,000
   Building fund	16,54,000	?
   Capital fund	12,22,000	?

2. 60% Donations are for Building Fund and balance is to be treated as revenue income.
3. Outstanding Staff salaries ₹ 1,40,000.

Answer 1

Dr.	In the books of Rampur High School, Ratnagiri Income and Expenditure Account for the year ended on 31st March, 2022				Cr.
Expenditure	Amount (₹)	Amount (₹)	Income	Amount (₹)	Amount (₹)
To Salary to staff	47,10,000	48,50,000	By Interest		1,32,000
Add: O/s Salary	1,40,000		By Donation	14,00,000	5,60,000
To Printing and stationery		68,000	Less: Building fund	8,40,000
To Electricity charges		1,34,000	By Tuition fees		30,00,000
To Magazines and newspapers		12,000	By Drama receipt	2,00,000	20,000
To Depreciation		4,08,00	Less: Drama expenses	1,80,000
Books	2,00,000		By Admission fees		9,30,000
Furniture	2,08,000		By Deficit (Excess of expenses over incomes)		8,30,000
		54,72,000			54,72,000

 

Balance Sheet as on 31st March, 2022
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Capital Fund	12,22,000	5,12,000	Books	18,00,000	17,76,000
Add: Legacies	1,20,000		Add: Purchases	1,76,000
	13,42,000			19,76,000
Less: Deficit	8,30,000		Less: Depreciation	2,00,000
Building Fund	16,54,000	24,94,000	Furniture	6,52,000	6,00,000
Add: Donation	8,40,000		Add: Purchase	1,56,000
Outstanding salary		1,40,000		8,08,000
			Less: Depreciation	2,08,000
			Cash in hand		1,24,000
			Cash at Bank		6,46,000
		31,46,000			31,46,000

Working Notes:

1. 60% of donations are for the building fund, i.e., out of donations received, transfer 60% to the building fund.
   Donation received = 14,00,000
   60% of Donation = `14,00,000 xx 60/100` = ₹ 8,40,000 (Add it to Building fund)
2. Legacies (capital) means adding the legacies amount received to the capital fund.
3. To find out the depreciation amount for Books and Furniture, Add the purchase amount to the Balances of Books and Furniture and find out the difference between the closing balance and the total, which gives you the the depreciation amount.