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Solution - Preparation of Income and Expenditure Account and Closing Balance Sheet

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Question

Following is the Balance Sheet and Receipts and Payments Account of the Sevagiri Hospital, Satara.

Prepare Income and Expenditure account for the year ended on 31 st March, 2013 and Balancc Sheet as on that date :

                                         Balance Sheet as on 1st April, 2012

LiabilitiesAmount (Rs.)AssetsAmount (Rs.)
Capital fund1000000Cash in hand6000
Outstanding Salaries22000Cash at bank30000
Medical bill unpaid6000Land and building800000
  Furniture70000
  Equipments120000
  Outstanding Subscription2000
 1028000 1028000

 

                                                     Receipts and Payments Account

                                                      for the year ending 31.03.2013

Dr.                                                                                                                                                   Cr.

ReceiptsAmount (Rs.)PaymentsAmount (Rs.)

To Balance b/d

           Cash in hand

           Cash at bank

 

6000

30000

By Salaries

        (including of previous year)

110000

 

To Subscription

      (includes 2000 received for previous year)

130000

 

By Medicines48000

To Sale of old furniture

        (book value Rs. 30000)

20000

 

By Equipment purchased20000

To Donations

        (revenue)

44000

 

By Taxes3000
To Life membership fees25000By General expenses8600
  

By Balance c/d

          Cash in hand

          Cash at bank

 

15400

50000

 255000 255000

 

Consider the following adjustments :

  1. Outstanding subscription Rs. 15,000.
  2. Capitalise the amount of life membership fees.
  3. Pre-paid taxes Rs. 500.
  4. Outstanding salary Rs. 12,000.
  5. Write off depreciation Rs. 20,000 from land and building and Rs. 30,000 from equipments.
  6. Outstanding medicine bill as on 01.04.2012 is still due.

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