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Question
The following information is given by Alchemy Medical College, Library department for the year 2020-21.
| Particulars | Amount (₹) |
| Books and Journals Fund as on 1.4.2020 | 4,50,000 |
| 7% Books and Journals Fund Investments as on 1.4.2020 | 4,00,000 |
| Interest on Books and Journals Fund Investments | 13,000 |
| Donations for Books and Journals | 20,000 |
| Books Purchased | 70,000 |
| General Fund as on 1.4.2020 | 10,00,000 |
Show the accounting treatment of the above-mentioned items in the Balance Sheet of the Alchemy Medical College as at 31st March,2021.
Ledger
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Solution
| An Extract of Balance Sheet as of 31st March, 2021 | |||||
| Liabilities | ₹ | Assets | ₹ | ||
| General Fund | 10,00,000 | 7% Books & Journals Fund | |||
| Add: Books and Journals Fund | 70,000 | 10,70,000 `(1/2)` | investment | 4,00,000 `(1/2)` | |
| Books & Journals Fund | 4,50,000 | Accrued Interest on Books and Journals Fund Investment | 5,000 `(1/2)` | ||
| Add: Donations for Books & Journals | 20,000 | Books | 70,000 `(1/2)` | ||
| Interest in Books & Journals | |||||
| Investment | 13,000 | ||||
| Accrued Interest | 15,000 | 28,000 | |||
| Less: Books purchased | 70,000 | 4,28,000(1) | |||
Working Note:
Interest on Books and Journals Investments
= `4,00,000 xx 7/100`
= 28,000
Accrued Interest
= 28,000 – 13,000
= 15,000
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