# 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

 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.