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Question 47 Chapter 1 of +2-A
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47. From the following Receipts and Payments Account of Mumbai Theatre Club, prepare Income and Expenditure Account for the year ended 31st March 2019 and Balance Sheet as at that date:
RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31st March 2019 | |||
Receipts | Rs. | Payments | Rs. |
To Balance b/d: | By Salary | 20,000 | |
Cash and Bank | 1,40,000 | By Repair Expenses | 5,000 |
To Donations | 50,000 | By Furniture | 60,000 |
To Subscriptions | 1,20,000 | By Miscellaneous Expenses | 5,000 |
To Entrance Fees | 10,000 | By Investments | 60,000 |
To Interest on Investments | 1,000 | By Insurance Premium | 2,000 |
To Interest Received from Bank | 4,000 | By Billiard Table | 80,000 |
To Sale of Old Newspapers | 1,500 | By Paper, Ink, etc. | 1,500 |
To Sale of Drama Tickets | 10,500 | By Drama Expenses | 5,000 |
By Balance c/d: | |||
Cash and Bank | 98,500 | ||
3,37,000 | 3,37,000 |
Additional Information:
(i) Subscriptions in arrear for the year ended 31st March 2019 ₹ 9,000 and subscriptions in advance for the year ending 31st March 2020 ₹ 3,500.
(ii) Insurance Premium outstanding ₹ 400.
(iii) Miscellaneous expenses prepaid ₹ 900.
(iv) 8% interest has accrued on investment for five months.
(v) Billiard Table costing ₹ 3,00,000 was purchased during last year and ₹ 2,20,000 were paid for it.
The solution of Question 47 Chapter 1 of +2-A: –
Income and Expenditure Account (for the year ended 31st March 2019) | ||||||
Expenditure | Amount | Income | Amount | |||
To Salary | 20,000 | By Subscriptions *1 | 1,20,000 | |||
To Repair Expenses | 5,000 | Add: Outstanding for 2018-19 | 9,000 | |||
To Miscellaneous Expenses | 5,000 | Less: Adv. Sub. for 2019-20 | 3,500 | 1,25,500 | ||
Less: Prepaid Expenses | 900 | 4,100 | By Donations | 50,000 | ||
To Insurance Premium | 2,000 | By Entrance Fees | 10,000 | |||
Add: Outstanding Premium | 400 | 2,400 | By Interest on Investments | 1,000 | ||
To Paper, Ink, etc. | 1,500 | Add: Accrued Interest *2 | 2,000 | 3,000 | ||
To Drama Expenses. | 5,000 | By Interest received from Bank | 4,000 | |||
By Sale of Old Newspapers | 1,500 | |||||
By Sale of Drama Tickets | 10,500 | |||||
To Surplus(Bal Fig.) | 1,66,500 | |||||
2,04,500 | 2,04,500 |
* Means: – see the working note for calculation
Balance Sheet (for the year ended 31st March 2018) | ||||
Liabilities | Amount | Assets | Amount | |
Creditors for Billiard Table | 80,000 | Billiard Table | 3,00,000 | |
Cash and Bank | 1,40,000 | |||
Capital Fund (Balancing Figure) | 3,60,000 | |||
4,40,000 | 4,40,000 |
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Balance Sheet (for the year ended 31st March 2018) | ||||||
Liabilities | Amount | Assets | Amount | |||
Capital Fund | 3,60,000 | Furniture | 60,000 | |||
Add: – Surplus | 1,66,500 | 5,26,500 | Investments | 60,000 | ||
Outstanding Insurance Premium | 400 | Billiard Table | 3,00,000 | |||
Advance Subscriptions | 3,500 | Prepaid Miscellaneous Expenses | 900 | |||
Accrued Interest on Investments | 2,000 | |||||
Outstanding Subscriptions | 9,000 | |||||
Cash and Bank | 98,500 | |||||
5,30,400 | 5,30,400 |
Working Note: –
*1: – Calculation of Amount of Subscriptions
Subscription received During the year | 1,20,000 |
Add: – Subscription outstanding at the end of the year | 9,000 |
Subscription received in advance at the beginning of the year | – |
1,29,000 | |
Less: – Subscription outstanding at the beginning of the year | – |
Subscription received in advance at the end of the year | 3,500 |
The amount for subscription credited to the Income and Expenditure A/c | 1,25,500 |
*2: – Calculation of Total Interest on Investment
Interest on Investment = Value of Investment X Rate of Interest X Period
Value of Asset = 60,000
Rate of Interest = 8%
Period = 5 months(given in additional information)
= 60,000 X 8/100 X 5/12
Total Accrued Interest on Investment = 2,000/-
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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)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
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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