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Following information has been provided by “Vivekanand Charitable Hospital” Latur. You are required to prepare Income and Expenditure Account for the year ending on 31.03.2019 - Book Keeping and Accountancy

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Following information has been provided by “Vivekanand Charitable Hospital” Latur. You are required to prepare Income and Expenditure Account for the year ending on 31.03.2019 and Balance Sheet as on that date.

Balance Sheet as on 01.04.2018.
Liabilities Amount
Assets Amount
Capital Fund 11,00,000 Building 10,50,000
Bank Loan 6,50,000 Ambulance 4,00,000
Outstanding Bill for Drugs 50,000 Stock of Drugs 42,000
    Hospital Equipments 3,04,000
    Cash in Hand 4,000
  1800000   1800000

 

Dr Receipts and Payments Account for the year ended 31.03.2019 Cr
Receipts Amount ₹ Payments Amount ₹
To Balance b/d 4,000

By Purchase of Drugs

(Includes 40,000 for 2017 - 18)

2,00,000
To Subscription 2,22,000 By Salary to Staff 85,000
To Life Membership Fees 30,000 By Honorarium to Doctors 4,00,000

To Hospital Receipts
(Revenue)

5,10,400  By Repairs and Maintenance 18,000
    By Furniture 45,000
    By General Expenses 16,000
    By Balance c/d 2,400
  7,66,400   7,66,400

Adjustments :

1) On 31.03.2019 Stock of Drugs was valued at ₹ 22,000.

2) Depreciation on Building at 5*% p.a. and on Ambulance ₹ 30,000.

3) Life Membership Fees are to be capitalized.

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Solution

In the books of Vivekanand Charitable Hospital, Latur

Dr

Income and Expenditure Account for the year ended 31st March, 2019

Cr
Expenditure Amount ₹ Amount ₹ Income Amount ₹ Amount
To Salary to Staff   85,000 By Subscription   2,22,000
To Honorarium to Doctors   4,00,000 By Hospital Receipts   5,10,400
To Repairs and Maintenance   18,000 By Deficit (Excess of expenditure over income)   49,100
To General Expenses   16,000      
To Depreciation          
Building 52,500        
Ambulance 30,000 82,500      
To Drugs Consumed          
Opening Stock 42,000        
Add : Purchases (2,00,000 – 40,000) 1,60,000        
  2,02,000        
Less : Closing stock 22,000 1,80,000      
    7,81,500     7,81,500

 

Balance Sheet as on 31st March, 2019
Liabilities Amount
Amount
Assets Amount
Amount ₹
Capital Fund 11,00,000   Building 10,50,000  
Add: Life Membership Fees (Capitalised) 30,000   Less: Depreciation 52,500 9,97,500
  11,30,000   Ambulance 4,00,000  
Less: Deficit 49,100 10,80,900 Less: Depreciation 30,000 3,70,000
Outstanding Bill for Drugs (50,000 – 40,000)   10,000 Hospital Equipment   3,04,000
Bank Loan   6,50,000 Closing stock of Drugs   22,000
      Furniture   45,000
      Cash in Hand   2,400
    17,40,900     17,40,900

Working Notes :

(1) Purchase of drugs ₹ 2,00,000 includes ₹ 40,000 of 2017–18 and in the Balance Sheet of 2017–18, the outstanding bill of drugs is ₹ 50,000 given. So, ₹ 10,000 is still outstanding

(2) Consumption of drugs :

Opening stock (2017 – 18) 42,000
Add: Purchase of drugs 1,60,000
  2,02,000
Less: Closing stock of drugs 22,000
Consumption of drugs 1,80,000
  Is there an error in this question or solution?
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APPEARS IN

Balbharati Book-keeping and Accountancy 12th Standard HSC Maharashtra State Board
Chapter 2 Accounts of ‘Not for Profit’ Concerns
Practical Problems | Q 14 | Page 124
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