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 | ||||
Adjustments:
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.