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From the Following Balance Sheet and Receipts and Payments A/C of Vidya Mandir High School, Alibag. Prepare Income and Expenditure Account for the Year Ended 31st March 2008 and Balance Sheet as on that Date - Book Keeping and Accountancy

From the following Balance Sheet and Receipts and Payments A/c of Vidya Mandir High School, Alibag. Prepare Income and Expenditure Account for the year ended 31st March 2008 and Balance Sheet as on that date
Balance Sheet as on 1st April 2007
Liabilities Amount (Rs) Assets Amount (Rs)
Entrance Fees 6,000 Furniture 16,800
Capital Fund 1,03,800 Laboratory 20,000
    Library 25,000
    Investment 40,000
    Cash in hand 1,000
    Cash at bank 3,000
    Outstanding Tuition Fees 4,000
  1,09,800   1,09,800
       

 

Receipts and Payments Account for the year ended 31st March 2008
Receipts Amount (Rs) Payments Amount (Rs)
To Balance b/d   By Furniture Purchased 5,400
   Cash in hand 1,000 By Salaries 60,000
   Cash at bank 3,000 By Rent 28,000
To Tuition Fees 80,000 By Sundry Expenses 15,200
To Term Fees 26,200 By Annual Gathering Expenses 11,300
To Government Grant 16,000 By Insurance 4,000
To Donation of Library 30,000 By Closing Balance  
To Interest on Investment 2,000    Cash at bank 34,300
  1,58,200   1,58,200

Adjustments:
1. Tuition fees still receivable are Rs. 10,000.
2. Salaries still payable are Rs. 30,000
3. An insurance premium is paid for one year ending 30.9.2008.
4. Rent paid in advance Rs. 4,000.
5. Depreciate furniture and library at 10%.

Depreciation to be charged on the closing balances of the assets.

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Solution

In the books of Vidya Mandir High School

Income and Expenditure Account

for the year ending March 31, 2008

Dr.   Cr.
Expenditure Amount (Rs) Income Amount (Rs)
Annual Gathering Expenses 11,300 Tuition Fees               80000  
Sundry Expenses 15,200     Less: O/s (2007)   4,000  
Rent                              28000       Add: O/s (2008)   10,000 86,000
    Less: Prep. Rent          4,000 24,000 Term Fees 26,200
Insurance                     4,000   Government Grant 16,000
    Less: Prep. Ins.         2,000 2,000 Interest on Investment 2,000
Salaries              60,000   Deficit (Excess of Exp. over Inc.) 17,020
    Add: O/s        30,000 90,000    
Depreciation:      
   Furniture      2,220      
   Library         2,500 4,720    
       
  1,47,220   1,47,220

 

Balance Sheet as on March 31, 2008
Liabilities Amount (Rs) Assets Amount (Rs)
Capital Fund   Furniture                   16,800  
  Opening Balance      1,03,800      Add: Additions          5,400  
   Less: Deficit              17,020 86,780   Less: Depreciation     2,220 19,980
Entrance Fees 6,000 Outstanding Tuition Fees 10,000
Donation for Library 30,000 Prepaid Insurance 2,000
Salaries Outstanding 30,000 Prepaid Rent 4,000
    Library                            25,000  
        Less: Depreciation         2,500 22,500
    Investment 40,000
    Laboratory 20,000
    Cash at Bank 34,300
       
  1,52,780   1,52,780

Working Notes:

WN1 Calculation of Depreciation

Depreciation on Furniture = (16,800 + 5,400) ×10/100 = Rs 2,220

Depreciation on Library = 25,000 × 10/100 = Rs 2,500

  Is there an error in this question or solution?
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