Question 44 Chapter 1 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 44 Chapter 1 of +2-A

Question 44 Chapter 1 of +2-A

44. From the following Receipts and Payments Account and additional information is given below, prepare Income and Expenditure Account and Balance Sheet of Rural Literacy Society as on 31st March 2019

RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31st March 2019
Receipts    Rs. Payments Rs. 
To Balance b/d     By General Expenses   32,000
Cash in Hand   40,000 By Newspapers 18,500
Cash at Bank   1,55,500 By Electricity 30,000
To Subscriptions     By Fixed Deposit with Bank 1,80,000
     2017-18 12,000   (On 30th September, 2018@ 10%p.a.)  
     2018-19 2,65,000   By Books 70,000
     2019-20 5,000 2,82,000 By Salary 36,000
To Legacy   12,500 By Rent 65,000
To Government Grant   1,20,000 By Postage Charges 3,000
To Sale of Old Newspaper   37,000 By Furniture (Purchased) 1,05,000
      (Book value Rs 50,000)     By Balance C/d  
To Interest received on Fixed Deposit   4,500 Cash in Hand 30,000
      Cash at Bank 82,000
    6,51,500   6,51,500

Additional Information:

  1. Subscription is Outstanding as on 31st March 2018 Rs 20,000 and on 31st March 2019 Rs 15,000.
  2. On31st March 2019 salary outstanding Rs 6,000 and one month rent paid in advance.
  3. On 1st April,2018, Society owned furniture Rs 1,20,000 and Books Rs 50,000.

The solution of Question 44 Chapter 1 of +2-A

: –

Income and Expenditure Account (for the year ended 31st March 2019)
Expenditure

Amount Income
Amount
To General Expenses     32,000 By Subscription 2018-19 2,65,000  
To Newspapers     18,500 Add O/s Sub. for 2018 -19* 7,000 2,72,000
To Electricity Charges     30,000 By Legacy   12,500
To Salaries   36,000   By Government Grant   1,20,000
Add: – Closing O/s Salaries   6,000 42,000 By Interest received on
Fixed Deposit
4,500  
To Rent   65,000   Add O/s Sub. at the end* 4,500 9,000
Less: – Advance Rent*   5,000 60,000      
To Postage Charges     3,000      
To Loss on sale of Furniture*     13,000      
To Surplus(Balancing Figure)     2,15,000      
      4,13,500       4,13,500

 

Balance Sheet (for the year ended 31st March 2018)
Liabilities
Amount Assets Amount
    Cash in Hand 40,000
    Cash at Bank 1,55,500
    Furniture 1,20,000
    Books 50,000
Capital Fund(Balancing Figure) 3,85,500 Outstanding Subscription 20,000
  3,85,500   3,85,500

 

Balance Sheet (for the year ended 31st March 2018)
Liabilities
Amount Assets
  Amount
Capital Fund   3,85,500   Cash in Hand   30,000
Add: – Surplus   2,15,000 6,00,500 Cash at Bank   82,000
Outstanding Salaries     6,000 Furniture 1,20,000  
Advance Subscription for 19-20     5,000 Add: Purchased 1,05,000  
        Less: Sale 50,000 1,75,000
        Books 50,000  
        Add: Purchased 70,000 1,20,000
        Outstanding Subscription    
        2018-19 7,000  
        2017-18 8,000 15,000
        Fixed Deposit with Bank   1,80,000
        Advance Rent   5,000
        Accrued Interest   4,500
      6,11,500       6,11,500

 

Working Note: –

Calculation of Total Interest on Investment
Interest on Investment = Value of Investment X Rate of Interest X Period
Value of Asset = 1,80,000
Rate of Interest = 10%
Period = from 01/10/18 to 31/03/19 i.e. 6 months
(from the date of purchase to the end of the financial year)
= 1,80,000 X 10/100 X 6/12
Total Interest on Investment = 9,000/-

Calculation Accrued amount of Interest on Investment  
Total Amount of Interest on Investment For the F/Y 19-20 9,000
Less: – Total Amount Interest on Investment received For the F/Y 19-20 4,500
Accrued amount of Interest on Investment For the F/Y 19-20 4,500

 

Calculation of the amount of Profit/loss on the sale of Furniture  
Sale Value of Furniture 37,000
Less: – Book Value of Furniture 50,000
Loss on sale of Furniture -13,000

 

Calculation of Advance rent at the end

Rent paid during the year (let assume it, Rent is for 13 months because in additional information they wrote that one month rent paid in advance, So Whole year + number Extra months for which rent is paid = 12 months + 1 Month = 13 Months). We have to divide the total rent paid with a total number of year for which rent is paid to calculate the amount for the 1 month.

= 65,000 * 1/13
Advance Rent = 5,000

Thanks, Please Like and share with your friends  

Comment if you have any questions.

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

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

  • Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
  • Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
  • Chapter No. 3 – Goodwill: Nature and Valuation
  • Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
  • Chapter No. 5 – Admission of a Partner
  • Chapter No. 6 – Retirement/Death of a Partner
  • Chapter No. 7 – Dissolution of a Partnership Firm

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

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

  • Chapter No. 1 – Financial Statements of a Company
  • Chapter No. 2 – Financial Statement Analysis 
  • Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
  • Chapter No. 4 – Accounting Ratios
  • Chapter No. 5 – Cash Flow Statement

 

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 1 min - Question 44 Chapter 1 of +2-A - T.S. Grewal 12 Class Part - A Vol. 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.