Question 40 Chapter 1 of +2-Part-1
40. (I & E A/c/ B/S/ Donation and Legacies/GST) Following Receipts and Payments Account is prepared from the cash book of Ajanta Charitable Trust, Agra for the year ending 31st March 2015:
| RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31st march, 2015 | |||
| Receipts | Rs. | Payments | Rs. |
| To balance b/d: | By salaries | 12,000 | |
| Cash in hand | 2,000 | By insurance | 3,000 |
| Cash in Current a/c | 4,000 | By printing and stationary | 2,000 |
| Cash in deposits | 5,000 | By advertisement | 7,000 |
| To donations | 6,000 | By postage | 500 |
| To legacies | 8,000 | By furniture | 5,000 |
| To Interest on Investments | 1,000 | By Investments | 10,000 |
| To endowment fund receipts | 2,500 | By advance for building | 8,000 |
| To Subscriptions | 25,000 | By balance c/d : | |
| To Life Membership Subscription | 3,000 | Cash in hand | 1,000 |
| Cash in Current a/c | 6,000 | ||
| Cash in deposits | 2,000 | ||
| 56,500 | 56,500 | ||
Prepare Income and Expenditure account and Balance sheet as on 31-3-2015 after consider the following:
a) 50% of donations and legacies are to be capitalized.
b) Provide for salaries Rs.1,000 and advertisement Rs.424. Advertisement is subject to CGST and SGST @ 9% each.
c) Salary prepaid is Rs.800 on 1-4-2014
d) Interest Rs.200 is accrued on Investment.
e) Subscription due : 31-3-2014 Rs.1800 and 31-3-2015 Rs.1200.
f) Insurance prepaid on 31-3-2015 Rs.1,000.
The solution of Question 40 Chapter 1 of +2 Part-1: –
| Income and Expenditure account of Ajanta Charitable Trust For the year ending 31st March 2015 |
|||||
| Expenditure |
Amount | Income |
Amount | ||
| To salaries | 12,000 | By donations | 6,000 | ||
| Add: outstanding | 1,000 | Less: Capitalised (50%) | 3,000 | 3,000 | |
| Add: prepaid on 1-4-14 | 800 | 13,800 | By legacies | 8,000 | |
| To insurance | 3,000 | Less: Capitalised (50%) | 4,000 | 4,000 | |
| Less: Prepaid | 1,000 | 2,000 | By interest on investments | 1,000 | |
| To printing and stationary | 2,000 | Add: Accrued | 200 | 1,200 | |
| To advertisement | 7,000 | By Subscriptions | 25,000 | ||
| Add: Outstanding | 424 | 7,424 | Add: Outstanding 31-3-15 | 1,200 | |
| To postage | 500 | Less: Outstanding 31-3-14 | 1,800 | 24,400 | |
| To excess of income over expenditure(Surplus) | 6,876 | ||||
| 32,600 | 32,600 | ||||
| Balance Sheet of Ajanta Charitable Trust As on 31st March 2015 |
|||||
| Liabilities |
Amount | Assets |
Amount | ||
| Capital Fund: | Cash in hand | 1,000 | |||
| -Balance on 1-4-16 | 13,600 | Cash in Current account | 6,000 | ||
| Add:50% donations | 3,000 | Cash in deposits | 2,000 | ||
| 50% Legacies | 4,000 | Furniture | 5,000 | ||
| Endowment fee receipts | 2,500 | Investments | 10,000 | ||
| Life Membership Subscription | 3,000 | Building advance | 8,000 | ||
| Surplus | 6,876 | 32,976 | Accrued interest | 200 | |
| Outstanding Salaries | 1,000 | Subscription due | 1,200 | ||
| Outstanding advertisement | 500 | Prepaid insurance | 1,000 | ||
| Input CGST | 38 | ||||
| Input SGST | 38 | ||||
| 34,476 | 34,476 | ||||
Working Note:
1. Opening Capital Fund:
| Balance Sheet of Ajanta Charitable Trust As on 1st April 2014 |
|||||
| Liabilities |
Amount | Assets |
Amount | ||
| Capital Fund (Balancing Figure): | 13,600 | Cash in hand | 2,000 | ||
| Cash in Current account | 4,000 | ||||
| Cash in deposits | 5,000 | ||||
| Prepaid salaries | 800 | ||||
| Subscription due | 1,800 | ||||
| 13,600 | 13,600 | ||||
2) Treatment of Advertisement expenses:
For outstanding advertisement expenses, adjustment entry will be:
| Advertisement a/c | Dr. | 424 | ||
| Input CGST a/c (9% of 424) | Dr. | 38 | ||
| Input SGST a/c (9% of 424) | Dr. | 38 | ||
| To outstanding advertisement expenses a/c | 500 |
O/S rent Rs. 424 is added in Income and Expenditure Account in Figure of rent paid. Input CGST & Input SGST of Rs. 38 each will be shown as current assets and O/S advertisement expenses of Rs. 500 will be shown as current liability in the balance sheet.
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Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
- Chapter No. 1 – Accounting Not for Profit Organisations
- Chapter No. 2 – Partnership Accounts – I (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
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