Question 38 Chapter 1 of Class 12 Part - 1 VK Publication

Question 38 Chapter 1 of Class 12 Part – 1

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The solution of Question 38 Chapter 1 of Class 12 Part – 1: –

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

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

38. From the following Receipts and Payments Account of Agra Music Club and information given below, prepare the Income and Expenditure Account for the year ending 31st March, 2018 and Balance Sheet as at that date:

Receipt and Payments Account (An Extract)
For the year ended 31st March, 2018

Receipts	Rs.	Payments	Rs.
To Balance on 1st April, 2017	20,000	By Salaries	20,000
To Entrance Fees	2,000	By Electricity Charges	2,500
Subscriptions for the year		By Rent
2016-17	5,000	By Printing and Stationery	1,500
2017-18	45,000	By New Furniture purchased on 1st Oct., 2017	20,000
2018-19	7,000	By Investments 12% p.a. on 1st July	30,000
To Interest on Investments	2,000	By Other Expenses	5,000
To Profit on entertainment	12,000	By Balance on 31st March, 2018	10,000
	93,000		93,000

Depreciate Furniture by 10% p.a. On 31st March, 2018, amount owing on account of salaries is Rs. 4,000; Subscriptions outstanding are Rs. 3,000. On 1st April, 2015 possessed Furniture worth Rs. 30,000 and owed Rs. 2,000 on account of Salaries.

The solution of Question 38 Chapter 1 of Class 12 Part – 1: –

Income and Expenditure Account

For the year ended on 31st March, 2018

Expenditure		Amount	Income		Amount
To Salaries	20,000		By Entrance fees		2,000
Add: Outstanding at the end 4,000	4,000		By Subscriptions	45,000
Less: Outstanding in the beginning	(2,000)	22,000	Add: Outstanding	3,000	48,000
To Electricity Charges		2,500	By Interest on Investment	2,000
To Rent		4,000	Add. Accrued Interest	700	2,7000
To Printing and Stationery		1,500	By Profit on Entertainment		12,000
To Other Expenses		5,000
To Depreciation on Furniture-
on 30,000@ 10%	3,000
on 20,000@ 10% for 6 months	1,000	4,000
To Surplus		25,700
		64,700			64,700

Balance Sheet (as at 31st March 2018)

Liabilities		Amount	Assets		Amount
Capital Fund	53,000	53,000	Furniture (30,000+ 20,000)	50,000
Add: Surplus	25,700	78,700	Less Depreciation	4,000	46,000
Outstanding Salaries		4,000	Investment	30,000
			Add. Accrued Interest	700	30,700
			Cash		10,000
			Outstanding Subscriptions		3,000
		89,700			89,700

Working Notes:
1. Interest on Investments = 30,000 x 12/100 X 9/12 = Rs. 2,700
Accrued Interest = 2,700 -2,000 (already received) = Rs. 700
2. Calculation of Opening Capital Fund

Opening Balance Sheet (as at 1st April 2018)

Liabilities	Amount	Assets	Amount
Outstanding Salaries	2,000	Furniture	30,000
Capital Fund	53,000	Cash	20,000
		Outstanding Subscriptions	5,000
	55,000		55,000