Practical Problem 08
Practical Problems | Q 8 | Page 119
“Jeevan Jyoti Art Circle” a newly established concern has presented the following information.
Receipts and Payments Account for the year ending 31.03.2018 | |||||
Receipts | Amt ₹ | Amt ₹ | Payments | Amt ₹ | Amt ₹ |
To Admission fees | 22,000 | By Furniture | 12,000 | ||
To Subscriptions | 40,000 | By Stationery | 4,000 | ||
To Donations | 18,000 | By Office Rent | 2,600 | ||
By Newspapers & Periodicals | 300 | ||||
By Telephone Expenses | 560 | ||||
By Investments | 23,000 | ||||
By Balance c/d | |||||
Cash in Hand | 7,540 | ||||
Cash at Bank | 30,000 | 37,540 | |||
80,000 | 80,000 | ||||
Adjustments:
1) Subscription Outstanding for the year was ₹ 5,000
2) Depreciate Furniture @10 % p.a
3) Full amount of Admission Fees and 50*% Donations are to be capitalized.
You are required to prepare Income and Expenditure Account for the year ending 31.03.2018 and Balance Sheet as on that date.
SOLUTION:
In the books of Jeevan Jyoti Art Circle
Income and Expenditure Account for the year ended 31st March 2018 | |||||
Expenditure | Amt ₹ | Amt ₹ | Income | Amt ₹ | Amt ₹ |
To Stationery | 4,000 | By Donations | 18,000 | ||
To Office rent | 2,600 | Less: 50 % Capitalised | 9,000 | 9,000 | |
To Newspapers and Periodicals | 300 | By Subscription | 40,000 | ||
To Telephone Expenses | 560 | Add: Outstanding of Current Year | 5,000 | 45,000 | |
To Depreciation Furniture | 1,200 | ||||
To Surplus (Excess of income over expenditure) | 45,340 | ||||
54000 | 54000 | ||||
Balance Sheet as on 31st March, 2018 | |||||
Liabilities | Amt ₹ | Amt ₹ | Assets | Amt ₹ | Amt ₹ |
Capital Fund | – | Furniture | 12,000 | ||
Add: Surplus | 45,340 | Less: Depreciation | 1,200 | 10,800 | |
Add: Admission Fees (Capitalised) | 22,000 | Investments | 23,000 | ||
Add: Donations (50 % Capitalised) | 9,000 | 76,340 | Cash in Hand | 7,540 | |
Cash at Bank | 30,000 | ||||
Outstanding Subscription | 5,000 | ||||
76,340 | 76,340 | ||||
Working Notes:
The full amount of admission fees and 50% of donations are added to the surplus amount to get the capital funds. (Opening balance of the capital fund is not given.)