Practical Problem 04
SOLUTION:
In the books of ‘ Satara Sports Club’ Satara
Income and Expenditure Account for the year ended on 31st March 2019 | |||||
Expenditure | Amt ₹ | Amt ₹ | Income | Amt ₹ | Amt ₹ |
To Salaries | 5,000 | By Subscription received for 2018 – 19 | 44,500 | ||
To rent | 5,000 | Add: Outstanding Subscription for Current Year | 4,500 | 49,000 | |
Add: Outstanding rent of Current Year | 1,000 | By Entrance Fees | 8,000 | ||
Less: rent received for the Year 2017 – 18 | 2,000 | 4,000 | By Interest | 600 | |
To Electricity Charges | 1,450 | ||||
To Printing and Stationery | 750 | ||||
To General Expense | 5,500 | ||||
Less: Amount Paid for Next Year | 500 | 5,000 | |||
To Sports Material Consumed | |||||
Opening Stock | 6,000 | ||||
Add: Sports Material Purchased in Current Year | 40,000 | ||||
46,000 | |||||
Less: Closing Stock of Sports Material | 14,000 | 32,000 | |||
To Loss due to Sale of Furniture (8,000 – 4,500) | 3,500 | ||||
To Surplus (Excess of income over expenditure) | 5,900 | ||||
57600 | 57600 | ||||
Working Notes :
(1) Entrance fees are to be treated as revenue income. Therefore the entire amount is recorded on the income side.
(2) Since the selling price of Furniture ₹ 4,500 is lower than its cost price of ₹ 8,000, there is Loss on sale of furniture.
It is calculated as follows :
Loss on sale of furniture = Book value (cost) – Selling price
= 8,000 – 4,500
= ₹ 3,500
It is debited to Income and Expenditure A/c.