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As at March 31, 2017 the Following Balances Have Been Extracted from the Books of the Indian Chartered Accountants Recreation Club - Accountancy

Ledger

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.

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Solution

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
Concept: Preparation of Income and Expenditure Account
  Is there an error in this question or solution?
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APPEARS IN

NCERT Class 12 Accountancy - Not-for-profit Organisation and Partnership Accounts
Chapter 1 Accounting for Not-for-Profit Organisation
Numerical Questions | Q 19 | Page 62
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