Question 23 Chapter 1 - Unimax Class 12 Part 1 - 2021

Question 23 Chapter 1 – Unimax Class 12 Part 1 – 2021

23. From the following Receipts and Payments Account of Mumbai Club, prepare Income & Expenditure Account for the year ended 31st December 2021 and its Balance Sheet as on that date :

Receipts	Amount	Payments	Amount
To Cash in Hand B/d	4,000	By Salary	2,000
To Cash at Bank b/d	10,000	By Payment for Billiard Table	8,000
To Donations	5,000	By Repair Expenses	500
To Subscriptions	12,000	By Purchase of Furniture	6,000
To Entrance Fees	1,000	By Miscellaneous Expenses	500
To Interest on Investments	100	By Purchase of Investments	6,000
To Interest Received from Bank	400	By Insurance Premium	200
To Sale of old Newspapers	150	By Paper, Ink. Etc.	150
To Sale of Drama Tickets	1,050	By Drama Expenses	500
		By Cash in Hand c/d	2650
		By Cash at Bank c/d	7200
	33,700		33,700

Additional Information:
1. Subscriptions in arrear for 2021, Rs. 900 and subscriptions in advance for 2022, Rs. 350.
2. Insurance premium outstanding Rs. 40.
3. Miscellaneous expenses prepaid Rs. 90.
4. 50% of donations to be capitalized.
5. 8% interest has accrued on investments for five months.
6. Entrance fees are to be treated as revenue income.
7. Billiard table costing Rs. 30,000 was purchased during the last year and Rs. 22,000 were paid for it in the last year.

The solution to Question 23 Chapter 1 – Unimax Class 12 Part 1:

Working Notes :

(1) Calculation of expenditure on Miscellaneous Expenses for the year ended 31/12/12.
Payment made during the year 2021	500
Less: Prepaid as on Dec. 31, 2021	90
Expenditure on Miscellaneous expenses	410
(2) Calculation of expenditure on Insurance Premium for the year ended 31 Dec. 2012.
Payment made during the year 2021	200
Add: Outstanding as on 31st Dec. 2021	40
Expenditure on insurance premiums for the year	240

Amount received for subscription during the year	12000
Add: Outstanding as on 31st Dec. 2021	900
	12900
Less: Received in advance as on 31.12.2021	350
Income from a subscription for the year 2021	12550

(4) Calculation of Income from interest on investments for the year ended 31st Dec. 2021
Interest received during the year 2021	100
Add: Outstanding as on 31st Dec. 2021	200
Income from interest on investment for the year 2021	300
(5) Calculation of opening capital fund as on 1/1/2021:-

Mumbai Club Balance Sheet As on 1 Jan. 2021

Liabilities	Amount	Assets	Amount
Creditors for Billiard Table	8,000	Cash	4,000
Capital fund (B/F)	36,000	Bank	10,000
		Billiard Table	30,000
	44,000		44,000

In the books of Mumbai Club Income and Expenditure account for the year ended on Dec. 31, 2021

Particulars	Amount	Particulars	Amount
To Salary	2,000	By donations	2,500
To Repair expenses	500	By Subscription	12,550
To Miscellaneous expenses	410	By entrance Fees	1,000
To Insurance premium	240	By interest on investment	300
To paper, Ink etc.	150	By interest received from Bank	400
To drama expenses	500	By sale of old newspaper	150
To Excess of Income over Expenditure	14,150	By sale of drama tickets	1,050
	17,950		17,950

Balance Sheet of Mumbai Club For the year ended 31.12.2021

Liabilities		Amount	Assets	Amount
Donations		2,500	Cash	2650
Pre received Subscription		350	Bank	7200
Outstanding Insurance			Furniture	6000
Premium		40	Investment	6000
Capital Fund 1/1/2012	36,000		Outstanding subscription	900
Add: Excess of income over expenditure	14,150	50,150	Prepaid Miscellaneous Expenses	90
			Accrued Interest	200
			Billards Table	30,000
		53040		53040