Practical Problem 06
Practical Problems | Q 6 | Page 117
From the following particulars relating to “Radha-Krishna Charitable Hospital” Pune. Prepare Income and Expenditure Account for the year ending 31.03.2020 and Balance Sheet as on that date.
Receipts and payments Account for the year ending 31.03.2020. | |||
Receipts | Amount ₹ | Payments | Amount ₹ |
To Balance b/d | By Medicines Purchased | 41,000 | |
Cash | 8,230 | By General Expenses | 1,050 |
To Subscriptions | 52,000 | By Salaries | 23,500 |
To Donations (General) | 17,500 | By Stationery | 2,000 |
To Interest in Investments | 10,000 | By Expenses on Charity Show | 550 |
To Proceeds from Charity Show | 8,530 | By Surgery and Dispensary Expenses | 4,200 |
By Equipment’s | 10,000 | ||
By Balance c/d | |||
Cash in Hand 960 | |||
Cash at Bank 13,000 | 13,960 | ||
96,260 | 96,260 | ||
Additional Information:
Particulars | 01.04.2019 ₹ | 31.03.2020 ₹ |
1. Subscription Due | 310 | 350 |
2. Subscription Received in Advance | 600 | 150 |
3. Stock of Medicine | 8,000 | 11,000 |
4. Estimated Value of Equipment | 15,000 | ? |
5. Building | 40,000 | ? |
6. Capital Fund | 1,70,940 | ? |
7. 10 % Investment | 1,00,000 | ? |
Provide Depreciation on Equipment ₹ 1,900 and on Building ₹ 1,500
SOLUTION:
Solution:
In the books of Radha-Krishna Charitable Hospital, Pune
Income and Expenditure Account for the year ended 31st March 2020 | |||||
Expenditure | Amt(₹) | Amt(₹) | Income | Amt(₹) | Amt(₹) |
To Medicines Consumed | By Subscriptions | 52,000 | |||
Opening Stock | 8,000 | Add: Outstanding of Current Year | 350 | ||
Add: Purchases | 41,000 | Add: received in Advance in Previous Year | 600 | ||
49,000 | 52,950 | ||||
Less: Closing Stock | 11,000 | 38,000 | Less: received in Current Year of the Previous Year | 150 | |
To General Expenses | 1,050 | Less: Subscription due of Previous Year | 310 | 52,490 | |
To Salaries | 23,500 | By Donations (General) | 17,500 | ||
To Stationery | 2,000 | By Interest on Investments | 10,000 | ||
To Expenses on charity show | 550 | By Proceeds from Charity Show | 8,530 | ||
To Surgery and Dispensary Expense | 4,200 | ||||
To Depreciation | |||||
Equipment | 1,900 | ||||
Building | 1,500 | 3,400 | |||
To Surplus (Excess of income over expenditure) | 15,820 | ||||
88,520 | 88,520 | ||||
Balance Sheet as on 31st March 2020 | |||||
Liabilities | Amt(₹) | Amt(₹) | Assets | Amt(₹) | Amt(₹) |
Capital Fund | 1,70,940 | Outstanding Subscription | 350 | ||
Add : Surplus | 15,820 | 1,86,760 | Closing Stock of Medicines | 11,000 | |
Subscription received in Advance | 150 | Equipment opening Balance | 15,000 | ||
Add: Purchases | 10,000 | ||||
25,000 | |||||
Less: Depreciation | 1,900 | 23,100 | |||
Buildings | 40,000 | ||||
Less: Depreciation | 1,500 | 38,500 | |||
10% Investments | 1,00,000 | ||||
Cash in Hand | 960 | ||||
Cash at Bank | 13,000 | ||||
1,86,910 | 1,86,910 | ||||
Working Notes :
(1) To find medicines consumed, here in the opening stock, purchases is added and the closing stock of medicine is subtracted.
(2) For equipment, in opening balance, add equipment purchased during the year and subtract depreciation to get the closing balance of equipment.
(3) Interest ₹ 10,000 is received on 10 % investments means there is no outstanding interest.