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Question 43 Chapter 1 of +2-Part-1
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43. (I & E A/c/ B/S/ Furniture) Following Receipts and Payments Account of Hero Club for the year ending 31st March 2017:
| RECEIPTS AND PAYMENTS ACCOUNT | |||
| Receipts | Rs. | Payments | Rs. |
| To cash in hand | 4,080 | By salaries | 18,640 |
| To subscriptions | By rent | 7,440 | |
| 2015-16 | 1,000 | By electricity | 3,120 |
| 2016-17 | 12,200 | By printing and stationary | 1,320 |
| 2017-18 | 1,400 | By insurance premium | 720 |
| To entrance fees | 4,000 | By general expenses | 1,840 |
| To sale of refreshments | 30,000 | By purchase of new furniture | 18,000 |
| To loan taken from Mr. Smart | 8,000 | By cash in hand | 9,600 |
| 60,680 | 60,680 | ||
You are also informed that:
a) Outstanding and prepaid expenses on 31st March were:
| Year | Rent due | Electricity bill due | Subscription due | Prepaid insurance |
| 2015-16 | 720 | 2,560 | 1,000 | 200 |
| 2016-17 | 1,440 | 800 | 1,600 | 280 |
b) Cost of refreshments sold was Rs.20,000. The surplus is to be treated as income.
c) On 31st March 2016, the book value of furniture was Rs.12,000. New furniture was purchased on 1st October 2016. Depreciation is to be provided @10% p.a.
d) Entrance fees are to be treated as revenue.
e) Loan from Mr. Smart was taken on 1st October 2016. Interest @10% p.a. is payable thereon.
You are required to prepare:
(a)the Income and Expenditure Account for the year ended 31st March 2017 and
(b) the balance sheet as of that date.
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The solution of Question 43 Chapter 1 of +2 Part-1 : –
| Income and Expenditure account of Hero Club For the year ending 31st March 2017 | |||||
| Expenditure | Amount | Income | Amount | ||
| To salaries | 18,640 | By entrance fees | 4,000 | ||
| To rent | 7,440 | By subscriptions | 12,200 | ||
| Add: outstanding(closing) | 1,440 | Add: outstanding(closing) | 1,600 | 13,800 | |
| Less: outstanding(opening) | 720 | 8,160 | By sale of refreshments | 30,000 | |
| To electricity | 3,120 | By the excess of expenditure over income | 6,660 | ||
| Add: outstanding(closing) | 800 | ||||
| Less: outstanding(opening) | 2,560 | 1,360 | |||
| To printing and stationary | 1,320 | ||||
| To insurance premium | 720 | ||||
| Add: prepaid at the beginning | 200 | ||||
| Less: prepaid at the end | 280 | 640 | |||
| To general expenses | 1,840 | ||||
| To cost of refreshments | 20,000 | ||||
| To depreciation on furniture(See Note) | 2,100 | ||||
| To interest on the loan(6 months) | 400 | ||||
| 54,460 | 54,460 | ||||
| Balance Sheet As of 31st March 2017 | |||||
| Liabilities | Amount | Assets | Amount | ||
| Capital Fund: | Cash in hand | 9,600 | |||
| -Balance on 1-4-16 | 34,000 | Outstanding Subscriptions | 1,600 | ||
| Less: Deficiency | 6,660 | 27,340 | Prepaid insurance | 280 | |
| Outstanding electricity | 800 | Furniture | 12,000 | ||
| Outstanding rent | 1,440 | Add: Purchased | 18,000 | ||
| Subscription received in advance | 1,400 | Less: Depreciation | 2,100 | 27,900 | |
| -Loan of Smart | 8,000 | ||||
| Add: Outstanding interest | 400 | 8,400 | |||
| 39,380 | 39,380 | ||||
Working Note:
1) Depreciation on Furniture:
| On 12,000 @10% for 1 Year | 1,200 |
| On 18,000 @10% for 1/2 Year | 900 |
| 2,100 |
2. Opening Capital Fund:
| Balance Sheet As of 31st March 2016 | |||||
| Liabilities | Amount | Assets | Amount | ||
| Outstanding Rent | 720 | Furniture | 12,000 | ||
| Cash in hand | 4,080 | ||||
| Outstanding Electricity | 2,560 | Subscription due | 1,000 | ||
| Capital Fund (Balancing Figure) | 34,000 | Prepaid insurance | 200 | ||
| Stock of refreshments | 20,000 | ||||
| 37,280 | 37,280 | ||||
3. Cost of refreshments sold is assumed to be opening stock of refreshments.
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Also, Check out the solved question of previous Chapters: –
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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
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
