Question 48 Chapter 1 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 48 Chapter 1 of +2-A

Question 48 Chapter 1 of +2-A

48. Following Receipts and Payments Account was prepared from the Cash Book of Delhi Charitable Trust for the year ending 31st March 2019:

RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31st March 2019
Receipts  Rs. Payments Rs.
To Balance b/d:    By Charity 1,15,000
    Cash in Hand   1,15,000 By Rent and Taxes 32,000
    Cash at Bank  1,26,000 By Salary 60,000
To Donations       90,000 By Printing 6,000
To Subscriptions    4,28,000 By Postage 3,000
To Legacies Donations     1,80,000 By Advertisements 45,000
To Interest on Investment        45,000 By Insurance 20,000
To Sale of old Newspaper         2,000 By Furniture 2,16,000
      By Investment 2,30,000
       By Balance c/d:  
       Cash in Hand 99,000
       Cash at Bank 1,60,000
  9,86,000   9,86,000

Prepare Income and Expenditure Account for the year ended 31st March 2019, and Balance Sheet as on that date after the following adjustments:
(i) Insurance premium was paid for insurance taken w.e.f. 1st July 2018.
(ii) Interest on investment ₹ 11,000 accrued was not received.
(iii) Rent ₹ 6,000; Salary ₹ 9,000 and advertisement expenses ₹ 10,000 outstanding as on 31st March 2019.
(iv) Legacy Donation is towards the construction of Library Block.

The solution of Question 48 Chapter 1 of +2-A

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

Amount Income
Amount
To Charity   1,15,000 By Subscriptions   4,28,000
To Rent and Taxes 32,000   By Donations   90,000
Less: Prepaid Expenses 6,000 38,000 By Interest on Investments 45,000  
To Salary 60,000   Add: Accrued Interest 11,000 56,000
Add: Outstanding Salary 9,000 69,000 By Sale of Old Newspapers   2,000
To Advertisement 45,000        
Add: Outstanding Adv. 10,000 55,000      
To Insurance 20,000        
Less: Prepaid Insurance *1 5,000 15,000      
To Printing   6,000      
To Postage   3,000      
To Surplus(Balancing Figure)   2,75,000      
    5,76,000   5,76,000

* Means: – see the working note for calculation

 

Balance Sheet (for the year ended 31st March 2018)
Liabilities
Amount Assets
Amount
      Cash in Hand 1,15,000
      Cash and Bank 1,26,000
         
Capital Fund (Balancing Figure)   2,41,000

 
   
    2,41,000     2,41,000

 

Balance Sheet (for the year ended 31st March 2018)
Liabilities
Amount Assets  Amount
Capital Fund   2,41,000   Furniture   2,16,000
Add: – Surplus   2,75,000   Investments   2,30,000
Add: – Legacy   1,80,000 6,96,000      
Outstanding Rent     6,000 Prepaid Insurance   5,000
Outstanding Salary     9,000 Accrued Interest on Investments   11,000
Outstanding Advertisement Exp.     10,000 Cash in Hand   99,000
        Cash at Bank   1,60,000
  5,30,400   5,30,400

Working Note: –
*1: – Calculation of Prepaid Insurance

Insurance premium was paid for insurance taken w.e.f. 1st July 2018 So, it will be valid for the minimum of 1 year (up to 30th June 2019) But our Financial Year ended on 31st March 2019. that’s why from 1st April 2019 to 30th June 2019 for 3 months the premium was paid extra.

This is Related to the next year not the expense for this year so we have to subtract it from the total amount.

= 20,000 X 3/12
Prepaid Insurance Premium = 5,000/-

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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 48 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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