Practical Problem 12
Practical Problems | Q 12 | Page 122
Following is the Receipts Payments Account of “Dhananjay Library, Mumbai” for the year ending 31.03.2020
Receipts and Payments Account for the year ending 31.03.2020. | |||
Receipts | Amt ₹ | Payments | Amt ₹ |
To Balance b/d | 5,000 | By Salaries | 9,000 |
To Admission Fees | 4,500 | By Rent | 7,500 |
To Subscriptions | 20,000 | By Investments | 6,000 |
To Lecture Hall Hire Charges | 4,200 | By Stationery | 1,350 |
To Miscellaneous Income | 250 | By Electricity Charges | 850 |
To Interest on Investment | 900 | By Books | 5,000 |
By Outstanding Expenses (2018 – 19) | 500 | ||
By Balance c/d | 4,650 | ||
34850 | 34850 | ||
You are required to prepare an Income and Expenditure Account for the year ended 31.03.2020 and Balance Sheet as on that day.
The following information is also made available to you.
1) On 31.03.2019, the Library had the following Assets also; Books at ₹ 50,000, Furniture ₹ 6,500, and Machinery of ₹ 30,000
2) Subscription received in advance amounted to ₹ 500
3) Outstanding Salaries ₹ 1300 and for Rent ₹ 950
4) 50% of the Admission Fees should be capitalized.
5) Furniture to be depreciated at 10% p.a.
6) Library Books were purchased on 1st April 2019 charge Depreciation at 10% p. a.
7) The Investments were purchased on 01.04.2019 and they carry interest at 20*% p.a
SOLUTION:
In the books of Dhananjay Library, Mumbai
Income and Expenditure Account for the year ended 31st March 2020 | |||||
Expenditure | Amt ₹ | Amt ₹ | Income | Amt ₹ | Amt ₹ |
To Salaries | 9,000 | By Subscription | 20,000 | ||
Add: Outstanding Salary | 1,300 | 10,300 | Less: Subscription Received in Advance | 500 | 19,500 |
To Rent | 7,500 | By Admission Fees | 4,500 | ||
Add: Outstanding Rent | 950 | 8,450 | Less: 50% Capitalised | 2,250 | 2,250 |
To Stationery | 1,350 | By Lecture Hall Hire Charges | 4,200 | ||
To Electricity Charges | 850 | By Miscellaneous Income | 250 | ||
To Depreciation | By Interest on Investments | 900 | |||
Furniture | 650 | Add: Outstanding Interest | 300 | 1,200 | |
Library Books (5000 + 500) | 5,500 | 6,150 | |||
To Surplus (Excess of Income over expenditure) | 300 | ||||
27400 | 27400 | ||||
Balance Sheet as on 31st March 2020 | |||||
Liabilities | Amt ₹ | Amt ₹ | Assets | Amt ₹ | Amt ₹ |
Capital Fund | 91,000 | Machinery | 30,000 | ||
Add : 50 % Admission | 2,250 | Books | 50,000 | ||
Add: Surplus | 300 | 93,550 | Add: Purchases | 5,000 | |
Outstanding Salaries | 1,300 | 55,000 | |||
Outstanding Rent | 950 | Less: Depreciation (5000 + 500) | 5,500 | 49,500 | |
Subscription Received in Advance | 500 | Furniture | 6,500 | ||
Less: Depreciation | 650 | 5,850 | |||
Investments | 6,000 | ||||
Add: Outstanding Interest | 300 | 6,300 | |||
Cash in Hand | 4,650 | ||||
96300 | 96300 | ||||
Working Notes :
(1) Opening Balance Sheet is prepared to find out opening capital fund :