Question 51 Chapter 1 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 51 Chapter 1 of +2-A-min

Question 51 Chapter 1 of +2-A

From the following information and Receipts and Payments Account of Delhi Medical Society, 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    31,900 ​By Rent 16,800
To Entrance Fees      5,500 By Wages 24,500
To Subscriptions 1,80,000 By Lighting Charges 7,200
To Donations    16,500 By Books 24,800
To Life Membership Fees    25,000 By Medicines (Polio Eradication Project) 1,00,000
To Government Grant (Polio Eradication Project) 2,00,000 By Salaries to Doctors (Polio Eradication Project) 80,000
To Proceeds of Seminar    23,200 By Office Expenses 45,000
To Interest on Deposits      2,400 By 8% Fixed Deposits  1,20,000
       (On 1st October 2018)  
    By Seminar Expenses 20,200
    By Cash in Hand 26,000
    By Bank A/c (Polio Eradication Project) 20,000
  4,84,500   4,84,500

Other information:

On 31st March 2018, the Club possessed books of ​₹ 2,00,000 and Furniture of ₹ 85,000. Provide depreciation on these assets @ 10% including the purchases during the year.Subscriptions in arrears at the beginning of the year amounted to ₹ 3,500 and at the end of the year, ₹ 5,500 were outstanding.​The Club paid three months’ rent in advance both in the beginning and at the end of the year.

The solution of Question 51 Chapter 1 of +2-A

Books of Delhi Medical Society
Income and Expenditure Account
(for the year ended 31st March 2019)

Expenditure
Amount Income
Amount
To Rent 16,800   By Subscriptions 1,80,000  
Add: – Adv. Rent in the beginning*2 4,200   Add: O/s at the end 5,500  
Add: – Adv. at the end 4,200 16,800 Less: O/s in the Beginning 3,500 1,82,000
To Wages   24,500 By Entrance Fees   5,500
To Lighting Charges   7,200 By Donations   16,500
To Office Expenses   45,000 By Interest on Deposits 2,400  
To Depreciation on Furniture*3   8,500 Add: Accrued Interest*1 2,400 4,800
To Depreciation on Books *4   22,480 By Profit from Seminar    
      Proceeds 23,200  
      Less: Expenses 20,200 3,000
To Surplus(Balancing Figure)   87,320      
    2,11,800   2,11,800

* Means: – see the working note for calculation

Balance Sheet (for the year ended 31st March 2019)
Liabilities
Amount Assets
Amount
Advanced Subscription   20,000 Advance Rent 4,200
      Subscription-in-Arrears 3,500
      Books 2,00,000
    Cash in Hand 31,900
    Furniture 85,000
Capital Fund (Balancing Figure) 9,70,000

   
    9,90,000     9,90,000

 

Balance Sheet (for the year ended 31st March 2019)
Liabilities
Amount Assets
Amount
Capital Fund 3,24,600   Advance Rent   4,200
Add: – Surplus 87,320 4,11,920 Subscription-in-Arrears   5,500
Life Membership   25,000 Books 2,00,000  
Government Grant 2,00,000   Add: – Purchased 24,800  
Less: – Medicines 1,00,000     2,24,800  
– Salaries 80,000 20,000 Less: 10% Depreciation 22,480 2,02,320
           
      Furniture 85,000  
      Less: 10% Depreciation 8,500 76,500
      8% Fixed Deposit   1,20,000
      Accrued Interest   2,400
      Cash in Hand   26,000
      Cash at Bank   20,000
           
           
           
    4,56,920       4,56,920

* Means: – see the working note for calculation

Working Note: –

*1:- Calculation Accrued amount of Interest on Investment

Interest on Investment = Value of Investment X Rate of Interest X Period
Value of Asset = 1,20,000
Rate of Interest = 8%
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)

Total Interest on Investment = 1,20,000 X 8/100 X 6/12

Total Amount of Interest on Investment For the F/Y 19-20 4,800
Less: – Total Amount Interest on Investment received For the F/Y 19-20 2,400
Accrued amount of Interest on Investment For the F/Y 19-20 2,400

*2: – Calculation of rent in advance both in the beginning and at the end of the year
The Club paid three months’ rent in advance both in the beginning and at the end of the year.

If Rent includes the three month’s rent in advance in both so the amount of advance rent will be the same for both in the beginning and at the end of the year: –

= 16,800 X 3/12

Advance Rent  = 4,200/-

*3:- Calculate Depreciation on Furniture
Depreciation = Value of Asset X Rate of Depreciation X Period

Value of Asset = 85,000
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)

=  85,000 X 10/100 X 12/12

Depreciation    = 8,500/-

*4:Calculate Depreciation on Books

Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,00,000
Rate of Depreciation = 10% (same rate on purchased during the year also)
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)

Books purchased during the year= 24,800
Total Value of Assets at the end of year = 2,00,000 + 24,800
= 2,24,800/-
= 2,24,800 X 10/100 X 12/12
Depreciation = 22,480/-

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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

 

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

2 Book 1 min - Question 51 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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