Q.No.44 | Chapter 1 – Financial Statements of Not-for-Profit Organisations | T.S. Grewal 12 Class Book Keeping Part - A - Vol. 1

Question 44 Chapter 1 of +2-A

44. From the following Receipts and Payments Account and additional information is given below, prepare Income and Expenditure Account and Balance Sheet of Rural Literacy Society as on 31st March 2019

RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31st March 2019

Receipts		Rs.	Payments	Rs.
To Balance b/d			By General Expenses	32,000
Cash in Hand		40,000	By Newspapers	18,500
Cash at Bank		1,55,500	By Electricity	30,000
To Subscriptions			By Fixed Deposit with Bank	1,80,000
2017-18	12,000		(On 30th September, 2018@ 10%p.a.)
2018-19	2,65,000		By Books	70,000
2019-20	5,000	2,82,000	By Salary	36,000
To Legacy		12,500	By Rent	65,000
To Government Grant		1,20,000	By Postage Charges	3,000
To Sale of Old Newspaper		37,000	By Furniture (Purchased)	1,05,000
(Book value Rs 50,000)			By Balance C/d
To Interest received on Fixed Deposit		4,500	Cash in Hand	30,000
			Cash at Bank	82,000
		6,51,500		6,51,500

Additional Information:

1. Subscription is Outstanding as on 31st March 2018 Rs 20,000 and on 31st March 2019 Rs 15,000.
2. On31st March 2019 salary outstanding Rs 6,000 and one month rent paid in advance.
3. On 1st April,2018, Society owned furniture Rs 1,20,000 and Books Rs 50,000.

The solution of Question 44 Chapter 1 of +2-A: -

Income and Expenditure Account (for the year ended 31st March 2019)

Expenditure		Amount	Income		Amount
To General Expenses		32,000	By Subscription 2018-19	2,65,000
To Newspapers		18,500	Add O/s Sub. for 2018 -19*	7,000	2,72,000
To Electricity Charges		30,000	By Legacy		12,500
To Salaries	36,000		By Government Grant		1,20,000
Add: - Closing O/s Salaries	6,000	42,000	By Interest received on Fixed Deposit	4,500
To Rent	65,000		Add O/s Sub. at the end*	4,500	9,000
Less: - Advance Rent*	5,000	60,000
To Postage Charges		3,000
To Loss on sale of Furniture*		13,000
To Surplus(Balancing Figure)		2,15,000
		4,13,500			4,13,500

 

Balance Sheet (for the year ended 31st March 2018)

Liabilities	Amount	Assets	Amount
		Cash in Hand	40,000
		Cash at Bank	1,55,500
		Furniture	1,20,000
		Books	50,000
Capital Fund(Balancing Figure)	3,85,500	Outstanding Subscription	20,000
	3,85,500		3,85,500

 

Balance Sheet (for the year ended 31st March 2018)

Liabilities		Amount	Assets		Amount
Capital Fund	3,85,500		Cash in Hand		30,000
Add: - Surplus	2,15,000	6,00,500	Cash at Bank		82,000
Outstanding Salaries		6,000	Furniture	1,20,000
Advance Subscription for 19-20		5,000	Add: Purchased	1,05,000
			Less: Sale	50,000	1,75,000
			Books	50,000
			Add: Purchased	70,000	1,20,000
			Outstanding Subscription
			2018-19	7,000
			2017-18	8,000	15,000
			Fixed Deposit with Bank		1,80,000
			Advance Rent		5,000
			Accrued Interest		4,500
		6,11,500			6,11,500

Working Note: -

Calculation of Total Interest on Investment
Interest on Investment = Value of Investment X Rate of Interest X Period
Value of Asset = 1,80,000
Rate of Interest = 10%
Period = from 01/10/18 to 31/03/19 i.e. 6 months
(from the date of purchase to the end of the financial year)
= 1,80,000 X 10/100 X 6/12
Total Interest on Investment = 9,000/-

Calculation of the Accrued amount of Interest on Investment
Total Amount of Interest on Investment For the F/Y 19-20	9,000
Less: - Total Amount Interest on Investment received For the F/Y 19-20	4,500
Accrued amount of Interest on Investment For the F/Y 19-20	4,500

 

Calculation of the amount of Profit/loss on the sale of Furniture
Sale Value of Furniture	37,000
Less: - Book Value of Furniture	50,000
Loss on sale of Furniture	-13,000

 

Calculation of Advance rent at the end

Rent paid during the year (let's assume it, Rent is for 13 months because in additional information they wrote that one month of rent is paid in advance, So the Whole year + number Extra months for which rent is paid = 12 months + 1 Month = 13 Months). We have to divide the total rent paid with a total number of year for which rent is paid to calculate the amount for the 1 month.

= 65,000 x 1/13
Advance Rent = 5,000

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

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

• Chapter No. 1 - Financial Statement of Not-For-Profit Organisations
• Chapter No. 2 - Accounting for Partnership Firms - Fundamentals
• Chapter No. 3 - Goodwill: Nature and Valuation
• Chapter No. 4 - Change in Profit-Sharing Ratio Among the Existing Partners
• Chapter No. 5 - Admission of a Partner
• Chapter No. 6 - Retirement/Death of a Partner
• Chapter No. 7 - Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 8 - Company Accounts -  Accounting for Share Capital
• Chapter No. 9 - Company Accounts - Issue of Debentures
• Chapter No. 10 - Redemption of Debentures

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

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

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