Q.No.51 | Chapter 1 – Financial Statements of Not-for-Profit Organisations | T.S. Grewal 12 Class Book Keeping Part - A - Vol. 1

Question 51 Chapter 1 of +2-A

From the following information and Receipts and Payments Account of Delhi Medical Society, prepare Income and Expenditure Account for the year ended 31st March 2019 and Balance Sheet as at that date.

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

Receipts	Rs.	Payments	Rs.
To balance b/d	31,900	​By Rent	16,800
To Entrance Fees	5,500	By Wages	24,500
To Subscriptions	1,80,000	By Lighting Charges	7,200
To Donations	16,500	By Books	24,800
To Life Membership Fees	25,000	By Medicines (Polio Eradication Project)	1,00,000
To Government Grant (Polio Eradication Project)	2,00,000	By Salaries to Doctors (Polio Eradication Project)	80,000
To Proceeds of Seminar	23,200	By Office Expenses	45,000
To Interest on Deposits	2,400	By 8% Fixed Deposits	1,20,000
		(On 1st October 2018)
		By Seminar Expenses	20,200
		By Cash in Hand	26,000
		By Bank A/c (Polio Eradication Project)	20,000
	4,84,500		4,84,500

Other information:

On 31st March 2018, the Club possessed books of ​₹ 2,00,000 and Furniture of ₹ 85,000. Provide depreciation on these assets @ 10% including the purchases during the year.Subscriptions in arrears at the beginning of the year amounted to ₹ 3,500 and at the end of the year, ₹ 5,500 were outstanding.​The Club paid three months' rent in advance both in the beginning and at the end of the year.

The solution of Question 51 Chapter 1 of +2-A: 

Books of Delhi Medical Society Income and Expenditure Account (for the year ended 31st March 2019)

Expenditure		Amount	Income			Amount
To Rent	16,800		By Subscriptions		1,80,000
Add: - Adv. Rent in the beginning*2	4,200		Add: O/s at the end		5,500
Add: - Adv. at the end	4,200	16,800	Less: O/s in the Beginning		3,500	1,82,000
To Wages		24,500	By Entrance Fees			5,500
To Lighting Charges		7,200	By Donations			16,500
To Office Expenses		45,000	By Interest on Deposits		2,400
To Depreciation on Furniture*3		8,500	Add: Accrued Interest*1		2,400	4,800
To Depreciation on Books *4		22,480	By Profit from Seminar
			Proceeds		23,200
			Less: Expenses		20,200	3,000
To Surplus(Balancing Figure)		87,320
		2,11,800				2,11,800

* Means: - see the working note for calculation

Balance Sheet (for the year ended 31st March 2019)

Liabilities		Amount	Assets		Amount
Advanced Subscription		20,000	Advance Rent		4,200
			Subscription-in-Arrears		3,500
			Books		2,00,000
			Cash in Hand		31,900
			Furniture		85,000
Capital Fund (Balancing Figure)		9,70,000
		9,90,000			9,90,000

 

Balance Sheet (for the year ended 31st March 2019)

Liabilities		Amount	Assets			Amount
Capital Fund	3,24,600		Advance Rent			4,200
Add: - Surplus	87,320	4,11,920	Subscription-in-Arrears			5,500
Life Membership		25,000	Books		2,00,000
Government Grant	2,00,000		Add: - Purchased		24,800
Less: - Medicines	1,00,000				2,24,800
- Salaries	80,000	20,000	Less: 10% Depreciation		22,480	2,02,320
			Furniture		85,000
			Less: 10% Depreciation		8,500	76,500
			8% Fixed Deposit			1,20,000
			Accrued Interest			2,400
			Cash in Hand			26,000
			Cash at Bank			20,000
		4,56,920				4,56,920

* Means: - see the working note for calculation

Working Note: -

*1:- Calculation of Accrued amount of Interest on Investment

Interest on Investment = Value of Investment X Rate of Interest X Period
Value of Asset = 1,20,000
Rate of Interest = 8%
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)

Total Interest on Investment = 1,20,000 X 8/100 X 6/12

Total Amount of Interest on Investment For the F/Y 19-20	4,800
Less: - Total Amount Interest on Investment received For the F/Y 19-20	2,400
Accrued amount of Interest on Investment For the F/Y 19-20	2,400

*2: - Calculation of rent in advance both in the beginning and at the end of the year
The Club paid three months' rent in advance both in the beginning and at the end of the year.

If Rent includes the three month’s rent in advance in both so the amount of advance rent will be the same for both in the beginning and at the end of the year: -

= 16,800 X 3/12

Advance Rent  = 4,200/-

*3:- Calculate Depreciation on Furniture
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 85,000
Rate of Depreciation = 10%
Period = from 01/04/18 to 31/03/19 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)

=  85,000 X 10/100 X 12/12

Depreciation    = 8,500/-

*4:- Calculate Depreciation on Books

Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,00,000
Rate of Depreciation = 10% (same rate on purchased during the year also)
Period = from 01/04/18 to 31/03/19 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)

Books purchased during the year= 24,800
Total Value of Assets at the end of year = 2,00,000 + 24,800
= 2,24,800/-
= 2,24,800 X 10/100 X 12/12
Depreciation = 22,480/-

Thanks, Please Like and share with your friends  

Comment if you have any questions.

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

 

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication