Question 40 Chapter 1 of +2-A - T.S. Grewal 12 Class Part

Question 40 Chapter 1 of +2-A

Table of Contents

The solution of Question 40 Chapter 1 of +2-A: –

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

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

40. Prepare Income and Expenditure Account from the following particulars of Youth Club for the year ended on 31st March 2018

RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31st March 2018
Receipts		Rs.	Payments	Rs.
To Balance b/d (Cash)		32,500	By Salaries	31,500
To Subscriptions:			By Postage	1,250
2016-17	1,500		By Rent	9,000
2017-18	60,000		By Printing and Stationery	14,000
2018-19	1,800	63,300	By Sports Material	11,500
To Donations (Billiards Table)		90,000	By Miscellaneous Expenses	3,100
To Entrance Fees		1,100	By Furniture (1st October 2017)	20,000
To Sale of Old Magazines		450	By 10% Investment(1st October 2017)	70,000
			By Balance c/d	1,80,000
		1,87,350		1,87,350

The solution of Question 40 Chapter 1 of +2-A: –

Income and Expenditure Account (for the year ended 31st March 2018)
Expenditure	Amount	Income		Amount
To Salaries	31,500	By Subscription 2017 – 18	60,000
To Postage	1,250	Add: O/s Sub. for 2018 -19*	15,000	75,000
To Rent	9,000	By Entrance Fees		1,100
To Printing and Stationery	14,000	By Sale of Old Magazines		450
To Miscellaneous Expenses	3,100	By Interest on Investment *		3,500
To Depreciation on Furniture*	1,000
To Sports Material Used*	10,000
To Surplus(Balancing Figure)	10,200
	80,050			80,050

Working Note: –

Calculate Outstanding Subscription for the Year 2017-18
Particulars	Amount
Total Outstanding Subscription as on 31-03-18	16,200
Less:- Subscription outstanding for the F/y 2016-17	1,200
Outstanding Subscription for the year 2017-18	15,000

Calculate Depreciation on Furniture

Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 20,000
Rate of Depreciation = 10%
Period = from 01/10/17 to 31/03/18 i.e. 6 months
(from the date of purchase to the end of the financial year)
= 20,000 X 10/100 X 6/12
Depreciation = 1,000/-
Calculate Interest on Investment

Interest on Investment = Value of Investment X Rate of Interest X Period
Value of Asset = 70,000
Rate of Depreciation = 10%
Period = from 01/10/17 to 31/03/18 i.e. 6 months
(from the date of purchase to the end of the financial year)
= 70,000 X 10/100 X 6/12
Interest on Investment = 3,500/-

Calculate Sports Material used during the year 2017-18
Particulars	Amount
Opening balance of Sports Material	3,000
Add:- Total payment made during the year for sport material	11,500
	14,500
Less:- The closing balance of Sports Material	4,500
Sports Material used during the year 2017-18 which will be transferred to Income and Expenditure account	10,000