Question

(Accounts of a Charitable Hospital)

From the following particulars relating to “Radha-Krishna Charitable Hospital” Pune. Prepare Income and Expenditure Account for the year ending 31.03.2020 and Balance Sheet as on that date.

Dr	Receipts and payments Account for the year ending 31.03.2020.					Cr
Receipts		Amount ₹	Payments		Amount ₹
To Balance b/d			By Medicines Purchased		41,000
Cash		8,230	By General Expenses		1,050
To Subscriptions		52,000	By Salaries		23,500
To Donations (General)		17,500	By Stationery		2,000
To Interest in Investments		10,000	By Expenses on Charity Show		550
To Proceeds from Charity Show		8,530	By Surgery and Dispensary Exp		4,200
			By Equipments		10,000
			By Balance c/d
			Cash in Hand	960
			Cash at Bank	13,000	13,960
		96,260			96,260

Additional Information :

Particulars	01.04.2019 ₹	31.03.2020 ₹
1. Subscription Due	310	350
2. Subscription Received in Advance	600	150
3. Stock of Medicine	8,000	11,000
4. Estimated Value of Equipment	15,000	?
5. Building	40,000	?
6. Capital Fund	1,70,940	?
7. 10 % Investment	1,00,000	?

Provide Depreciation on Equipments ₹ 1,900 and on Building ₹ 1,500

Answer 1

 

Dr	In the books of Radha-Krishna Charitable Hospital, Pune Income and Expenditure Account for the year ended 31st March 2020						Cr
Expenditure		Amount (₹)	Amount (₹)	Income	Amount (₹)	Amount (₹)
To Medicines Consumed				By Subscriptions	52,000
Opening Stock		8,000		Add: Outstanding of Current Year	350
Add: Purchases		41,000		Add: received in Advance in Previous Year	600
		49,000			52,950
Less: Closing Stock		11,000	38,000	Less: received in Current Year of the Previous Year	150
To General Expenses			1,050	Less: Subscription due of Previous Year	310	52,490
To Salaries			23,500	By Donations (General)		17,500
To Stationery			2,000	By Interest on Investments		10,000
To Expenses on charity show			550	By Proceeds from Charity Show		8,530
To Surgery and Dispensary Expense			4,200
To Depreciation
Equipments		1,900
Building		1,500	3,400
To Surplus (Excess of income over expenditure)			15,820
			88,520			88,520

 

Balance Sheet as on 31st March 2020
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Capital Fund	1,70,940		Outstanding Subscription		350
Add : Surplus	15,820	1,86,760	Closing Stock of Medicines		11,000
Subscription received in Advance		150	Equipments opening Balance	15,000
			Add: Purchases	10,000
				25,000
			Less: Depreciation	1,900	23,100
			Buildings	40,000
			Less: Depreciation	1,500	38,500
			10% Investments		1,00,000
			Cash in Hand		960
			Cash at Bank		13,000
		1,86,910			1,86,910

Working Notes :

(1) To find medicines consumed, here in the opening stock, purchases is added and the closing stock of medicine is subtracted.

(2) For equipment, in opening balance, add equipment purchased during the year and subtract depreciation to get the closing balance of equipment.

(3) Interest ₹ 10,000 is received on 10 % investments means there is no outstanding interest.