Question 38 Chapter 1 of +2 Part-1 - USHA Publication 12 Class Part - 1

Question 38 Chapter 1 of +2-Part-1

38. (I & EA/c/ Donation/ B/S/ Opening Fund Required/ GST) Following is the Receipts and Payments Account of Our Paradise Club for the year ending 31st March 2017:

RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31st March 2017

Receipts	Rs.	Payments	Rs.
Cash in hand	50	Salaries	2,400
Cash at bank	565	Rent	720
Subscriptions(Including Rs.100 for 2015-16 and Rs.150 of 2017-18)		Postage	30
	4550	Printing and Stationery	255
Interest on Investments	2,000	Electricity Charges	300
Bank Interest	25	Meeting Expenses	150
Sale of Furniture	300	Purchase of library books	1,000
		Investments in Bonds	1,000
		Cash in hand	155
		Cash at Bank	1,480
	7,490		7,490

The following additional information is supplied to you:
1) On 1st April 2016, the Club had the following assets and liabilities:
a) Investments costing Rs.40,000, (b) Furniture Rs.3,000, (c) library books Rs.5,000.
b) Liability for rent Rs.60 and for salary Rs.200
2) On 31st March 2017, rent of Rs.80 and Salary of Rs.250 were in arrear. Arrear of Rent is subject to levy of CGST & SGST @ 9% each.
3) The book value of the Furniture was Rs.250.
Prepare the Income and Expenditure Account of the Club for the year ending 31st March 2017 and the Balance Sheet as on that date.

The solution of Question 38 Chapter 1 of +2 Part-1: -

Income and Expenditure account of Paradise Club For the year ending 31st March 2017

Expenditure		Amount	Income		Amount
To salaries	2,400		By subscriptions	5,000
Add: outstanding	250		Less: Received for 2015-16	100
Less: Paid for the previous year	200	2,450	Received for 2017-18	150	4,300
To rent	720		By interest on investments		2,000
Add: Outstanding	80		By bank interest		25
Less: Paid for the previous year	60	740	By profit on sale of furniture		50
To postage		30
To printing and stationary		255
To Electricity Charges		300
To Meeting Expenses		150
To excess of income over expenditure (Surplus)		2,450
		6,375			6,375

Balance Sheet As on 31st March 2017

Liabilities		Amount	Assets		Amount
Outstanding Expenses :			Cash in hand		155
- Rent	94.40		Cash at Bank		1,480
- Salary	250	344.40	Investments	40,000
Subscription received in advance		150	Add: Purchased now	1,000	41,000
Capital Fund:			Furniture	3,000
- Opening Balance	48,455		Less: Sold	250	2,750
Add: Surplus	2,450	50,905	Library books	5,000
			Add : Purchased Now	1,000	6,000
			Input CGST		7.20
			Input SGST		7.20
		51,399.40			51,399.40

Working Note:
1. Opening Capital Fund:

Balance Sheet As on 1-4-2016

Liabilities		Amount	Assets		Amount
Outstanding Expenses :			Cash in hand		50
- Rent	60		Cash at Bank		565
- Salary	200	260	Outstanding Subscriptions		100
Capital Fund (Balancing Figure)		48,455	Investments		40,000
			Furniture		3,000
			Library Books		5,000
		48,715			48,715

2) Treatment of Outstanding Rent
For outstanding rent adjustment entry will be:

Particulars		L.F.	Debit	Credit
Rent a/c	Dr.		80
Input CGST a/c (9% of 80)	Dr.		7.20
Input SGST a/c (9% of 80)	Dr.		7.20
To Outstanding Rent a/c				94.40

O/S rent Rs. 80 is added in Income and Expenditure Account in Figure of rent paid. Input CGST & Input SGST of Rs. 7.20 each will be shown as current assets and O/S rent of Rs. 94.40 will be shown as a current liability on the balance sheet.

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Also, Check out the solved question of previous Chapters: -

Usha Publication - Accountancy PSEB (Class 12) - Volume I - Solution

• Chapter No. 1 - Accounting Not for Profit Organisations
• Chapter No. 2 - Partnership Accounts - I (Introduction)
• Chapter No. 3 - Partnership Accounts - II (Goodwill: Nature and Valuation)
• Chapter No. 4 - Partnership Accounts - III (Reconstitution of Partnership)
• Chapter No. 5 - Partnership Accounts - IV (Admission of A Partner)
• Chapter No. 6 - Partnership Accounts - V (Retirement and Death of A Partner)
• Chapter No. 7 - Partnership Accounts - VI (Dissolution of Partnership Firm)
• Chapter No. 8 - Company Accounts (Share Capital)
• Chapter No. 9 - Company Accounts (Issue of Debentures)
• Chapter No. 10 - Company Accounts (Redemption of Debentures)

Usha Publication - Accountancy PSEB (Class 12) - Volume II - Solution

• Chapter No. 1 - Financial Statements of a Company
• Chapter No. 2 - Financial Statement Analysis
• Chapter No. 3 –  Tools of Financial Statement Analysis- Comparative and Common Size
• Chapter No. 4 - Ratio Analysis
• Chapter No. 5 - Cash Flow Statement

 

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