Practical Problem 10
SOLUTION:
In the books of K.B.P. Engineering College, Nashik
Income and Expenditure Account for the year ended on 31st March, 2019 | |||||
Expenditure | Amt ₹ | Amt ₹ | Income | Amt ₹ | Amt ₹ |
To Salaries to Teaching Staff | 11,70,000 | By Interest | 55,000 | ||
To Electricity Charges | 55,000 | By Subscription | 28,300 | ||
To Stationery | 21,850 | Add: Outstanding Subscription | 5,300 | 33,600 | |
To Depreciation | By Donations | 7,00,000 | |||
Furniture | 70,000 | Less: 50 % for Building Fund | 3,50,000 | 3,50,000 | |
Books | 61,000 | 1,31,000 | By Tuition Fees | 12,30,000 | |
To Surplus (Excess of income over exp.) | 5,59,550 | By Term Fees | 2,00,800 | ||
By Sundry receipts | 8,000 | ||||
By Admission Fees | 60,000 | ||||
19,37,400 | 19,37,400 | ||||
Balance Sheet as on 31st March, 2019 | |||||
Liabilities | Amt ₹ | Amt ₹ | Assets | Amt ₹ | Amt ₹ |
Capital Fund | 9,47,400 | Outstanding Subscription | 5300 | ||
Add: Surplus | 5,59,550 | Books | 6,00,000 | ||
Add: Life Membership Fees (Capitalised) | 25,000 | 15,31,950 | Add: Purchases | 61,000 | |
Building Fund | 10,00,000 | 6,61,000 | |||
Add: 50% of Donations | 3,50,000 | 13,50,000 | Less: Depreciation | 61,000 | 6,00,000 |
Furniture | 3,19,000 | ||||
Add: Purchase | 51,000 | ||||
3,70,000 | |||||
Less: Depreciation | 70,000 | 3,00,000 | |||
Fixed Deposits (Old) | 8,50,000 | ||||
Cash in Hand | 16,650 | ||||
Cash in Bank | 2,00,000 | ||||
Fixed Deposits (New) | 9,10,000 | ||||
28,81,950 | 28,81,950 | ||||
Working Notes :
(1) Life membership fees are to be capitalised, means add entire amount in capital fund.
(2) 50% of Donations of ₹ 7,00,000 i.e., ₹ 3,50,000 is to be added to the Building Fund, and the remaining amount of donation i.e., ₹ 3,50,000 is credited to Income and Expenditure A/c.
(3) The depreciation on Fixed assets is calculated by using following formula:
Depreciation = Opening balance + Purchases – Closing value
∴ Depreciation on Books = 6,00,000 + 61,000 – 6,00,000
= 6,61,000 – 6,00,000
= ₹ 61,000
∴ Depreciation on Furniture = 3,19,000 + 51,000 – 3,00,000
= 3,70,000 – 3,00,000
= ₹ 70,000
(4) Fixed Deposit:
Opening balance given | ₹ 910000 |
Fixed deposit (31 – 03 – 2019) (Newly purchased) | ₹ 850000 |
∴ Total fixed deposits | ₹ 1760000 |
(5) Admission Fees ₹ 60,000 is recorded on the credit side of Income and Expenditure A/c because it is taken as revenue income.