Practical Problem 13
SOLUTION:
Solution:
In the books of ‘Morya Sports Club’ Thane
Income and Expenditure Account for the year ended 31st March, 2020 | |||||
Expenditure | Amount ₹ | Amount₹ | Income | Amount₹ | Amount₹ |
To Salary | 17,500 | By Subscription | 1,05,000 | ||
Less: Outstanding salary of 2018 – 19 | 4,000 | 13,500 | Add: Outstanding Subscription for Current Year | 14,000 | |
To Insurance Premium | 11,000 | 1,19,000 | |||
Less: Prepared Insurance Premium | 2,500 | Less: Subscription Received of 2018 – 19 | 3,000 | 1,16,000 | |
8,500 | By Locker Rent | 1,500 | |||
Add: Prepaid Insurance premium of C.Y Paid in P.Y | 2,000 | 10,500 | Add: Outstanding Locker Rent | 400 | |
To Depreciation | 1,900 | ||||
Furniture | 3,000 | Less: O/s Locker Rent of P. Y | 500 | 1,400 | |
To Interest | 1,400 | ||||
To Refreshment Expenses | 4,200 | ||||
To Surplus (Excess of income over Expenditure) | 84,800 | ||||
1,17,400 | 1,17,400 | ||||
Balance Sheet as on 31st March, 2020 | |||||
Liabilities | Amount ₹ | Amount ₹ | Assets | Amount ₹ | Amount ₹ |
Capital Fund | 64,500 | Machinery | 69,000 | ||
Add: Surplus | 84,800 | Outstanding Subscription (2018 – 19) (8,000 – 3,000) | 5,000 | ||
Add: Entrance fees (Capt.) | 9,300 | O/s Subscription (2019–20) | 14,000 | ||
Add: Donations (Capitalised) | 800 | 1,59,400 | Prepaid Insurance Premium | 2,500 | |
Furniture | 15,000 | ||||
Add: Purchases | 30,000 | ||||
45,000 | |||||
Less: Depreciation | 3,000 | 42,000 | |||
O/s Locker Ren (2019 – 20) | 400 | ||||
Cash in Hand | 6,500 | ||||
Cash at Bank | 20,000 | ||||
1,59,400 | 1,59,400 | ||||
Working Notes :
(1) Outstanding subscription (2018–19) ₹ 8,000 given in b/s against that ₹ 3,000 received in 2019–20.
Means still receivable subscription = ₹ 5,000 (8,000 – 3,000).
(2) Prepaid insurance premium (2018 – 19) ₹ 2,000 is for the current year. Therefore, in current year’s insurance premium, ₹ 2,000 is to be added and then subtract current year’s prepaid insurance premium.
(3) Outstanding salary of (2018 – 19), ₹ 4,000 of the previous year is to be subtracted from the current year’s salary.
(4) The total amount of donations and entrance fees are to be capitalised so add the entire amount of both the items to the Capital fund.
(5) Outstanding locker’s rent (2018 – 19) ₹ 500 is given in Balance Sheet. It is to be subtracted from current year’s locker’s rent and then add current year’s outstanding locker rent.