Question 50 Chapter 1 of +2-A - T.S. Grewal 12 Class Part

Question 50 Chapter 1 of +2-A

Table of Contents

The solution of Question 50 Chapter 1 of +2-A:

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

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

50. From the following Receipts and Payments Account of Kapil Dev Club and from the given additional information, prepare Income and Expenditure Account for the year ending 31st December 2019 and the 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	1,90,000	By Salaries	3,30,000
To Subscriptions	6,60,000	By Sports Material	4,00,000
To Interest on Investment	40,000	By Balance c/d	1,60,000
@ 8% p.a. for full year
	8,90,000		8,90,000

Additional Information:
(i) The club had received ₹ 20,000 for subscription in 2017-18 for 2018-19.
(ii) Salaries had been paid only for 11 months.
(iii) The stock of sports materials on 31st March 2018 was ₹ 3,00,000 and on 31st March 2019 ₹ 6,50,000.

The solution of Question 50 Chapter 1 of +2-A:

Income and Expenditure Account (for the year ended 31st March 2019)
Expenditure		Amount	Income		Amount
To Salaries	3,30,000		By Subscriptions	6,60,000	2,50,000
Add: Outstanding Salary *1	30,000	65,000	Add: Advance in the beginning	20,000	54,000
To Sports Materials Consumed*2		50,000	By Interest on Investments *3		40,000
To Surplus(Balancing Figure)		3,10,000
		3,63,500			3,63,500

* Means: – see the working note for calculation

Balance Sheet (for the year ended 31st March 2019)
Liabilities		Amount	Assets	Amount
Capital Fund *4	9,70,000		Investments	5,00,000
Add: – Surplus	3,10,000	12,80,000	Stock of Sports Material	6,50,000
Outstanding Salary		30,000	Cash	1,60,000
		13,10,000		13,10,000

* Means: – see the working note for calculation

Working Note: –

*1:- Statement Showing Sports Material used during the year
Particulars	Details	Amount
Sports Material Purchased during the year ended 31st March 2019		4,00,000
Add: – Opening Stock of Sports Material	3,00,000
Closing Creditors for Sports Material	–
Cash Purchase of Sports Material	–	3,00,000
Outstanding Advertisement Exp.		7,00,000
Less: – Closing Sports Material	6,50,000
Opening Creditors for Sports Material	–
Book Value of sale of Sports Material	–	6,50,000
Amount of Sports Material used – debited to the Income and Expenditure A/c		50,000

*2:- Calculation of Outstanding Salary

O/s Salaries	=	Total salary paid	X	No. of Month for which not paid
				Total No. of the month for which salary paid

O/s Salaries	=	3,30,000	X	1
				11

O/s Salaries = 5,000/-

*3:- Calculation of the amount of Investment:

= amount of Interest	X	100
		Rate of Interest

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= 40,000	X	100
		8

Total on Investment = 5,00,000/-

Balance Sheet (for the year ended 31st March 2018)
Liabilities	Amount	Assets	Amount
Advanced Subscription	20,000	Investments	5,00,000
		Stock of Sports Material	3,00,000
		Cash	1,90,000
	9,90,000		9,90,000