# Practical Problem 09

Practical Problems | Q 9 | Page 119

Given below is the Receipts and Payments Account of “Vithai Mahila Mandal” Pandharpur for the year ending 31.03.2018.

Prepare an Income and Expenditure Account for the year ended 31.03.2018 and Balance Sheet as on that date.

 Receipts and Payments Account for the year ending 31.03.2018. Receipts Amt ₹ Amt ₹ Payments Amt ₹ Amt ₹ To Balance b/d By Stationery 6000 Cash in Hand 3,000 By Repairs to Furniture 950 Cash at Bank 20,000 23,000 By Rent 8,300 To Entrance Fees 3,500 By Salaries 15,000 To Subscription 19,000 By Miscellaneous Expenses 450 To Miscellaneous Receipts 850 By Balance c/d Cash in Hand 1,650 Cash at Bank 14,000 15,650 46,350 46,350

1) Capital Fund on 01.04.2017 was  90,000
2) Outstanding Subscription  4,000
3) Entrance Fees are to be capitalized
4) Rent paid includes  800 paid for April 2018
5) They have the following Assets and Liabilities 01.04.2017
Furniture 9,000
Building  70,000,
Outstanding Expenses  12,000

#### SOLUTION:

In the books of Vithai Mahila Mandal, Pandharpur

 Income and Expenditure Account for the year ended 31st March 2018 Expenditure Amt ₹ Amt ₹ Income Amt ₹ Amt ₹ To Stationery 6,000 By Subscription 19,000 To Repairs to Furniture 950 Add: Outstanding Subscription 4,000 23,000 To Rent 8,300 By Miscellaneous receipts 850 Less: Prepaid Rent 800 7,500 By Deficit (Excess of expenses over incomes) 6,050 To Salaries 15,000 To Miscellaneous Expense 450 29,900 29,900
 Balance Sheet as on 31st March 2018 Liabilities Amt ₹ Amt ₹ Assets Amt ₹ Amt ₹ Capital Fund 90,000 Furniture 9,000 Add: Entrance Fees (Capitalised) 3,500 Building 70,000 Less: Deficit 6,050 87,450 Outstanding Subscription 4,000 Outstanding Expenses 12,000 Cash in Hand 1,650 Cash at Bank 14,000 Prepaid rent 800 99,450 99,450

Working Notes :

(1) Outstanding subscription of ₹ 4,000 is first added to subscription received on the credit side of Income and Expenditure A/c and then it is shown on the Assets side of the Balance Sheet.

(2) The entire amount of the entrance fees ₹ 3,500 is added to the capital fund.

(3) Prepaid ₹ 800 is first deducted from rent paid on the debit side of Income & Expenditure A/c and then shown on the Assets side of the Balance Sheet.

(4) Outstanding expenses ₹ 12,000 is directly shown on the Liabilities side of the Balance Sheet.