Question 45 Chapter 1 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 45 Chapter 1 of +2-A

Question 45 Chapter 1 of +2-A

45. Glaxo Club’s Balance Sheet as at 1st April 2018 was as under:

Liabilities  Rs. Assets Rs. 
Capital Fund 2,00,000 Sports Equipment 50,000
Tournament Fund 60,000 Grounds 1,20,000
Subscriptions in Advance 6,000 Billiards Tables 60,000
Salaries Unpaid 11,000 Subscriptions Outstanding 8,000
    Cash and Bank Balances 39,000
  6,51,500   6,51,500

 

RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31st March 2019
Receipts  Rs. Payments Rs. 
To Opening Balance 39,000 By Wages and Salaries 60,000
To Subscriptions 1,81,000 By Upkeep of Grounds 10,000
To Sale of Old Materials 1,500 By Stationery 15,000
To Sale of Sports Equipment 6,000 By Audit fee 2,000
     (Book Value Rs 10,000)   By Expenses on Tournament 65,000
To Entrance fees 2,000 By Sports Equipment 20,000
To Life Membership Fees 50,000 By 5% Investments 40,000
To Donations for Tournament 20,000       (On 1st October 2018)  
    By Cash and Bank Balances 87,500
  6,51,500   6,51,500

Additional Information:

Subscriptions still to be received are Rs 5,500 but subscriptions already received include Rs 4,000 for next year. Salaries still unpaid are Rs 6,000. Sports Equipment is now valued at Rs 45,000. Prepare Income and Expenditure Account and the Balance sheet, after charging 10% depreciation on Billiards Tables.

The solution of Question 45 Chapter 1 of +2-A

: –

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

Amount Income
Amount
To Wages and Salaries   60,000   By Subscription 2018-19* 1,81,000  
Add: – Closing Unpaid Salaries   6,000   Add O/s Sub. at the end 5,500  
Less: – Opening Unpaid Salaries   11,000 55,000   Adv. Sub. In the Beginning 6,000  
To Upkeep of Grounds     10,000 Less: O/s. Sub. In the Beginning 8,000  
To Stationery     15,000 Adv. Sub. at the end 4,000 1,80,500
To Audit fee     2,000 By Sale of Old Materials   1,500
To Loss on sale of Sports Equipment*     4,000 By Entrance Fees   2,000
To Consumption of Sport Equipment*     15,000 By Accrued Interest on investment*   1,000
To Depreciation on Billiards Tables*     6,000      
To Surplus(Balancing Figure)     78,000      
      1,85,000       1,85,000

 

 

Balance Sheet (for the year ended 31st March 2018)
Liabilities
Amount Assets
  Amount
Capital Fund   2,00,000   Cash in Hand   87,500
Add: – Surplus   78,000 2,78,000 Cash at Bank   45,000
Outstanding Salaries     6,000 Grounds   1,20,000
Advance Subscription for 19-20     4,000 Billiards Tables 60,000  
Tournament Fund*     15,000 Less: Depreciation 6,000 54,000
Life Membership Fees     50,000 Outstanding Subscription   5,500
        5% of Investments   40,000
        Accrued Interest   1,000
      3,53,000       3,53,000

 

Working Note: –
Calculation of Amount of Subscriptions

Subscription received During the year 1,81,000
Add: – Subscription outstanding at the end of the year 5,500
Subscription received in advance at the beginning of the year 6,000
  1,92,500
Less: – Subscription outstanding at the beginning of the year 8,000
Subscription received in advance at the end of the year 4,000
The amount for subscription credited to the Income and Expenditure A/c 1,80,500

Calculation of Total Interest on Investment
Interest on Investment = Value of Investment X Rate of Interest X Period
Value of Asset = 40,000
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)
= 40,000 X 10/100 X 6/12
Total Interest on Investment = 1,000/-

Calculation Accrued amount of Interest on Investment  
Total Amount of Interest on Investment For the F/Y 19-20 1,000
Less: – Total Amount Interest on Investment received For the F/Y 19-20 0
Accrued amount of Interest on Investment For the F/Y 19-20 1,000

 

Calculation of the amount of Profit/loss on the sale of Sports Equipment  
Sale Value of Sports Equipment 6,000
Less: – Book Value of Sports Equipment 10,000
Loss on sale of Sports Equipment – 4,000

 

Calculation of the amount of consumption of Sports Equipment  
Opening Balance of Sports Equipment 50,000
Add: – Purchase of Sports Equipment during the year 20,000
Less: – Book Value of Sports Equipment 10,000
  60,000
Less: – Closing Value of Sports Equipment 45,000
Loss on sale of Sports Equipment  15,000

Calculate Depreciation on Billiards Table
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 60,000
Rate of Depreciation = 10%
Period = from 01/04/18 to 31/03/19 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 60,000 X 10/100 X 12/12
Depreciation = 6,000/-

Calculate Tournament Fund  
Opening Tournament Fund 60,000
Add: – Received Donation for tournament 20,000
Less: – Tournament Expenses 65,000
Closing Tournament Fund 15,000

 

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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

 

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2 Book 1 min - Question 45 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

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