Question 40 Chapter 1 of +2 Part-1 – USHA Publication 12 Class Part – 1

Question 40 Chapter 1 of +2- Part-

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
Receipts
Amount
Payments
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   300 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 balance sheet.

 

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Also, Check out the solved question of previous Chapters: –

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

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

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2 Book 1 min - Question 40 Chapter 1 of +2 Part-1 - USHA Publication  12 Class Part - 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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