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(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 - Book Keeping and Accountancy

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Ledger

(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
(Book Value ₹ 8000)

  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

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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.

Concept: Income and Expenditure Account
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APPEARS IN

Balbharati Book-keeping and Accountancy 12th Standard HSC Maharashtra State Board
Chapter 2 Accounts of ‘Not for Profit’ Concerns
Exercise 2.2 (Practical Problems) | Q 4. | Page 116
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