Question

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 31^st 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.

Answer 1

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