(Preparation of Income and Expenditure Account only)
Following is the Receipts and Payments Account of “Satara Sports Club” Satara Prepare Income and Expenditure Account for the year ending 31.03.2019.
| Dr | Receipts and Payments Account for the year ending 31.03.2019. | Cr | |||||
| Receipts | Amt ₹ | Amt ₹ | Payments | Amt ₹ | Amt ₹ | ||
| To Balance b/d | By Salaries | 5,000 | |||||
| Cash in hand | 4,500 | 16,500 | By Rent (Including ₹ 2,000 for 2017 - 18) | 5,000 | |||
| Cash at Bank | 12,000 | By Electricity Charges | 1,450 | ||||
| To Subscription | By Fixed Deposit | 60,000 | |||||
| 2017 - 18 | 4,000 | 52,000 | By Printing and Stationery | 750 | |||
| 2018 - 19 | 44,500 | By General Expenses (Including ₹ 500 paid for next year) | 5,500 | ||||
| 2019 - 20 | 3,500 | By Sports Material Purchased | 40,000 | ||||
| To Entrance fees | 8,000 | By Balance c/d | |||||
| To Donation for Building fund | 70,000 | Cash in Hand | 8,900 | 33,900 | |||
| To Interest | 600 | Cash at Bank | 25,000 | ||||
|
To Sale of furniture |
4,500 | ||||||
| 1,51,600 | 1,51,600 | ||||||
Adjustments:
1) Outstanding Subscription for Current Year is ₹ 4,500
2) Outstanding Rent for Current Year amounted to ₹ 1,000
3) Entrance Fees are to be treated as Revenue Income
4) Stock of Sports Material as on 01.04.2018 ₹ 6,000 and on 31.03.2019 ₹ 14,000
Solution
| Dr |
In the books of ‘ Satara Sports Club’ Satara Income and Expenditure Account for the year ended on 31st March 2019 |
Cr | |||||
| Expenditure | Amount ₹ | Amount ₹ | Income | Amount ₹ | Amount ₹ | ||
| To Salaries | 5,000 | By Subscription received for 2018 – 19 | 44,500 | ||||
| To rent | 5,000 | 4,000 | Add: Outstanding Subscription for Current Year | 4,500 | 49,000 | ||
| Add: Outstanding rent of Current Year | 1,000 | By Entrance Fees | 8,000 | ||||
| Less: rent received for the Year 2017 – 18 | 2,000 | By Interest | 600 | ||||
| To Electricity Charges | 1,450 | ||||||
| To Printing and Stationery | 750 | ||||||
| To General Expense | 5,500 | 5,000 | |||||
| Less: Amount Paid for Next Year | 500 | ||||||
| To Sports Material Consumed | |||||||
| Opening Stock | 6,000 | ||||||
| Add: Sports Material Purchased in Current Year | 40,000 | ||||||
| 46,000 | |||||||
| Less: Closing Stock of Sports Material | 14,000 | 32,000 | |||||
| To Loss due to Sale of Furniture (8,000 – 4,500) | 3,500 | ||||||
| To Surplus (Excess of income over expenditure) | 5,900 | ||||||
| 57600 | 57600 | ||||||
Working Notes :
(1) Entrance fees are to be treated as revenue income. Therefore the entire amount is recorded on the income side.
(2) Since the selling price of Furniture ₹ 4,500 is lower than its cost price of ₹ 8,000, there is Loss on sale of furniture.
It is calculated as follows :
Loss on sale of furniture = Book value (cost) – Selling price
= 8,000 – 4,500
= ₹ 3,500
It is debited to Income and Expenditure A/c.
