Advertisement
Advertisement
Journal Entry
From the following Receipts and Payment Account and additional information, prepare Income and Expenditure Account and Balance Sheet of Sears Club, Noida as on March 31, 2018.
Receipts and Payment Account of Sears Club for the year ended 31-3-2018
Receipts |
Amount (₹) |
Payments | Amount (₹) |
To Balance b/d | 20,000 | By Stationery | 23,400 |
To Subscriptions | By 12% Investments | 8,000 | |
2016-17 - 40,000 | By Electricity expenses | 10,600 | |
2017-18 - 94,000 | By Expenses on lectures | 30,000 | |
2018-19 - 7,200 | 141,200 | By Sports equipment | 59,000 |
To Donations for building | 40,000 | By Books | 40,000 |
To Interest on Investments | 800 | By Balance c/d | 50,000 |
To Government Grant | 17,400 | ||
To Sale of old furniture | |||
(Book value ₹ 4,000) | 1,600 | ||
2,21,000 | 2,21,000 |
Additional Information:
(i) The club has 200 members each paying an annual subscription of ₹ 1,000. ₹ 60,000 were in arrears for last year and 25 members paid in advance in the last year for the current year.
(ii) Stock of stationery on 1-4-2017 was ₹ 3,000 and on 31-3-2018 was ₹ 4,000.
Advertisement
Solution
Income and Expenditure Account
Particulars |
Amount(₹) |
Particulars | Amount(₹) |
To Loss on Sale of Old Furniture (4,000 – 1,600) | 2,400 | By Subscriptions (200 × 1,000) | 2,00,000 |
To Stationery Consumed: | By Interest on Investments -800 | ||
Add: Purchases - 23,400 | Add: Accrued Interest - 160 | 960 | |
Opening Stock - 3,000 | By Government Aid | 17,400 | |
26,400 | |||
Less: Closing Stock - (4,000) | 22,400 | ||
To Electricity Expenses | 10,600 | ||
To Expenses on lectures | 30,000 | ||
To Excess of Income over Expenditure (i.e. Surplus) | 1,52,960 | ||
2,18,360 | 2,18,360 |
Balance Sheet as on 31st March 2018
Liabilities |
Amount(₹) |
Assets | Amount(₹) |
Subscriptions in Advance | 7,200 | Cash in hand | 50,000 |
Donations for Building | 40,000 | Stationery | 4,000 |
Capital Fund - 62,000 | Sports Equipment | 59,000 | |
Add: Surplus for the year - 1,52,960 | 2,14,960 | Books | 40,000 |
12% Investments | 8,000 | ||
Subscriptions in the Arrears (WN) | 1,01,000 | ||
Accrued Interest on investments | 160 | ||
2,62,160 | 2,62,160 |
Balance Sheet as on 1st April 2017
Liabilities |
Amount(₹) |
Assets | Amount(₹) |
Subscriptions in Advance | 25,000 | Cash in hand | 20,000 |
(25 × 1,000) | |||
Capital Fund (Balancing Figure) | 62,000 | Subscriptions in Arrear | 60,000 |
Stationery | 3,000 | ||
Furniture | 4,000 | ||
87,000 | 87,000 |
Working Note:
Computation of subscriptions in arrears at the end of year
Particulars |
Amount (₹) |
Subscriptions due for the year ( 200 × 1,000) | 2,00,000 |
Less: Subscriptions received during the year | (94,000) |
Less: Subscriptions received during the last year | (25,000) |
Subscription in arrears for 2017-18 |
81,000 |
Add: Subscriptions still in arrears for 2016-17 (60,000 – 40,000) | 20,000 |
1,01,000 |
Concept: Income and Expenditure Account Based on Trial Balance
Is there an error in this question or solution?