Question 38 Chapter 1 - Unimax Class 12 Part 1 - 2021

Question 38 Chapter 1 – Unimax Class 12 Part 1

Table of Contents

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

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

38. The following is the Receipts and Payments Account of Sydney Club for the year ended on 31.3.2021

Receipts	Amount	Payments		Amount
To Opening Balance Cash	10,000	By entrance donation refund		20,000
Bank	3850	By Salaries		1,20,000
To Subscription received	2,02,750	By Creditors for supplies		15,20,000
To Entrance donation	1,00,000	By Printing and Stationery		70,000
To Interest received	58,000	By Postage		40,000
To Sale of assets	8,000	By Telephone and telex		52,000
To Miscellaneous income	9,000	By Repairs and maintenance		48,000
To Receipts at :		By Glass and table linen		12000
Coffee room	10,70,000	By Crockery and cutlery		14,000
Wines and spirits	5,10,000	By Garden upkeep		8000
Swimming pool	80,000	By Membership fees		4,000
Tennis court	1,02,000	By Insurance		5,000
		By Electricity		8000
		By Closing Balance : Cash	8,000	2,32,600
		Bank	2,24,600
	21,53,600			21,53,600

The assets and liabilities as on 31.3.2020 were as follows :
Fixed assets (net) : Rs. 5,00,000, Stock of Supplies Rs. 3,80,000, Investment in government securities Rs. 5,00,000, outstanding subscription Rs. 12,000, prepaid insurance Rs. 1,000, Sundry creditors for supplies Rs. 1,12,000, subscription received in advance Rs. 15,000, entrance donation received pending membership Rs. 1,00,000, Gratuity fund Rs. 1,50,000.
The following adjustments are to be made while drawing up the accounts :
(a) Subscription received in advance as on 31st March, 2021 was Rs. 18,000.
(b) Outstanding Subscription as on 31st March, 2021 was Rs. 7,000.
(c) Outstanding expenses are : salaries Rs. 8,000 and Electricity Rs. 15,000.
(d) 50% of the entrance donation was to be capitalized. There was no pending membership as on 31st March, 2021.
(e) The cost of assets sold net as on 1.4.20 was Rs. 10,000.
(f) Depreciation is to be provided at the rate of 10% on assets.
(g) A sum of Rs. 20,000 received in October 2020 as entrance donation from an applicant was to be refunded as he had not fulfilled the requisite membership qualifications. The refund was made on 31.3.2021.
(h) The value of closing stock of supplies was Rs. 2,10,000.
(i) The club as a matter of policy charges off to income and expenditure account all purchases made on account of crockery, cutlery, glass and linen in the year of purchase.
Prepare an income and expenditure account for the year ended 31st March, 2021 and the balance sheet as on 31st March, 2021 along with necessary workings.

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

Working Notes :
(1) Calculation of Capital Fund on 1st April, 2011.

Balance Sheet of Sydney Club For the year ended 31 March, 2011

Liabilities	Amount	Assets	Amount
Creditors	112000	Cash	10000
Prereceived Subscription	15000	Bank	3850
Entrance donations rect. In adv.	100000	Fixed Assets	500000
Gratunity fund	150000	Stock of Supplies	380000
Capital fund	–	Investments	500000
(Balancing Figure)	1029850	Outstanding Subscription	12000
		Prepaid Insurance	1000
	1406850		1406850

(2) Calculation of Income from the Subscription for the year ended 31st March, 2012.

Subscription received during the year		202750
Add Outstanding subscription on 31-3-12		7000
Add Prereceived subscription on 31-3-11		15000
		224750
Less: Outstanding subscription on 1-4-11	12000
Less: Prereceived subscription on 31-3-12	18000	30000
Income for the year from subscription		194750

(3) Calculation of purchases and consumption of supplies for the year ended 31-3-12.

Total Creditors Account

Particulars	Amount	Particulars	Amount
To cash a/c	1520000	By Balance b/d	112000
To Balance c/d	Nil	By Purchases (B/f)	1408000
	1520000		1520000

Consumption :

Opening Stock on 1-4-11	380000
Add purchases made during the year	1408000
	1788000
Less Stock as on 31-3-12	210000
Consumption of supplies	1578000

(4) Calculation of Expenditure on salaries for the year ended 31-3-12

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Payment for salaries made during the year	120000
Add outstanding as on 31-3-12	8000
Expenditure for the year	128000

(5) Calculation of Expenditure on Insurance for the year ended 31-3-12

Payment made during the year	5000
Add prepaid as on 1-4-11	1000
Expenditure for the year	6000

(6) Calculation of Expenditure on Electricity charges for the year ended 31-312

Paid during the year
Add outstanding as on 31-3-12	15000
Expenditure for the year	23000

(7) Calculation of loss on the sale of Fixed Asset :

Book value of Asset sold	10000
Amount at which asset sold	8000
Loss on Sale of Asset	2000

(8) Calculation of Entrance Donations to be Capitalised.

50% of Entrance Donations (1.4.11) As on 1-4-2011 (Rs. 100,000 x 50/100)		50000
Entrance donation received during 2011-12	100000
Less Amount refunded	20000
	80000
Less Treated As income (80000 x 50/100)	40000	40000
Total Amount of Entrance		90000
Donations to be Capitalised

(9) Calculation of Entrance Donations treated as income for the year 2011-12.

50% of Entrance Donations As on 1-4-2011 (Rs. 100,000 x 50/100)	50000
50% of Net Entrance Donations received during 2011-12	40000
Entrance Donations to be treated as income for the year 2011-12	90000

In the Books of Sudney Club. Income and Expenditure account
For the year ended 31st March, 2012

Particulars	Amount	Particulars	Amount
To Salaries	128000	By subscription	194750
To consumption of Supplies	1578000	By Entrance donation	90000
To printing & Stationery	70000	By Interest received	58000
To Postage	40000	By Miscellaneous income	9000
To telephone and telex	52000	By Receipt at
To Repairs and maintenance	48000	Coffee room	1070000
To glass & table lenin	12000	Withs & spoils	510000
To Crockery & cutlery	14000	Swimming pool	80000
To garden up keep	8000	Tennis Court	102000
To Membership fees	4000
To Insurance	6000
To Electricity	23000
To Depreciation (500000 – 10000 x 10/100)	49000
To Loss on sale of Fixed Asset	2000
To Surplus	79750
	2113750		2113750

Balance Sheet of M/s Sydney Club As on 31st March, 2012

Liabilities		Amount	Assets		Amount
Outstanding Expenses		23000	Cash		8000
Salaries	8000		Bank		224600
Electricity	15000		Outstanding Subscription		7000
Pre received Subscription		18000	Stock of supplies		210000
Gratuity fund		150000	Investments		500000
Capital fund	1029850		Fixed Assets	490000
Add Surplus	79750		Less dep. @ 10%	49000	441000
Add Entrance Donation	90000	1199600
		1390600			1390600