Question 41 Chapter 1 of +2-A - T.S. Grewal 12 Class Part

Question 41 Chapter 1 of +2-A

Table of Contents

The solution of Question 41 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)

41. Following is the Receipts and Payments Account of Delhi Football Club for the year ended 31st March 2019:

RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31st March 2019
Receipts	Rs.	Payments	Rs.
To Balance b/d (Cash)	18,000	By Building	4,00,000
To Donations for Building	4,50,000	By Project Expenses (Young Talent Search and Development)	90,000
To Donations	50,000	By Match Expenses	90,000
To Government Grant (Young Talent search and Development)	1,00,000	By Furniture	1,21,000
To Life Membership Fees	40,000	By 10% of Investments	11,500
To Match Fund	80,000	(Purchased on 1st July 2018)
To Subscriptions	52,000	By Salaries	70,000
To Locker Rent	4,000	By Insurance	3,500
To Interest on Investments	10,000	By Sundry Expenses	4,700
To Sale of Furniture (Book value Rs 80,000)	1,00,000	By Balance c/d (Cash)	4,800
To Entrance Fees	50,000	By Bank(Young Talent Search and Development)	10,000
	1,87,350		1,87,350

Additional Information:

During the year ended 31st March 2019, the Club had 550 members and each paying an annual subscription of Rs 100.
Salaries Outstanding as at 1st April 2018 were Rs 10,000 and as at 31st March, 2019 were Rs 5,000.
Prepare Income and Expenditure Account of the Club for the year ended 31st March 2019.

The solution of Question 41 Chapter 1 of +2-A: –

Income and Expenditure Account (for the year ended 31st March 2018)
Expenditure		Amount	Income		Amount
To Salaries	70,000		By Subscription 2018-19	52,000
Add: – Closing O/s Salary	5,000		Add O/s Sub. for 2018 -19*	3,000	55,000
Less: – Opening O/s Salary	10,000	65,000	By Donation		50,000
To Insurance		3,500	By Locker Rent		4,000
To Sundry Expenses		4,700	By Interest on Investment *	10,000
To Match Expenses*	90,000		Add: Accrued Interest*	2,000	12,000
Less: – Match Fund	80,000	10,000	By Entrance Fees		50,000
			By Profit on Sale of Furniture*		20,000
To Surplus(Balancing Figure)		1,07,800
		1,91,000			1,91,000

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Working Note: –

Calculate Outstanding Subscription for the Year 2017-18
Particulars	Amount
Total Subscription due of the year 2018-19
(Numbers of Member X Amount of Annual Subscription per member)
550 Members X 100 Per member	55,000
Less: – Subscription received During the year for the F/y 2018-19	52,000
Outstanding Subscription for the year 2018-19	3,000

Calculation of Interest on Investment
Interest on Investment = Value of Investment X Rate of Interest X Period
Value of Asset = 1,60,000
Rate of Interest = 10%
Period = from 01/07/18 to 31/03/19 i.e. 9 months
(from the date of purchase to the end of the financial year)
= 1,60,000 X 10/100 X 9/12
Interest on Investment = 12,000/-

Calculation of Accrued amount of Interest on Investment
Total Amount of Interest on Investment For the F/Y 19-20	12,000
Less: – Total Amount Interest on Investment received For the F/Y 19-20	10,000
Accrued amount of Interest on Investment For the F/Y 19-20	2,000

Calculation of the amount of Profit/loss on the sale of Furniture
Sale Value of Furniture	1,00,000
Less: – Book Value of Furniture	80,000
Profit on sale of Furniture	20,000