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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. - Accountancy

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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.

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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
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