question_answer

Following is the receipts and payments account of Green Club for the year ended 31st March, 2018. Receipts and Payments Account Dr                                             for the year ending 31 st March, 2018                                                        Cr

Receipts		Amt (Rs.)	Payments	Amt (Rs.)
To Balance b/d		15,640	By Salary	2,400
To Subscriptions			By Newspaper	1,640
2016-17	960		By Electricity Bill	800
2017-18	21,200		By 9% Investments (1st July, 2017)	16,000
2018-2019	400	22,560	By Books	8,480
To Sale of Old Newspapers		1,000	By Rent	5,440
To Government Grants		8,000	By Furniture	8,400
(Book Value Rs. 5,600)			By Balance c/d	8,960
To Interest on Investments		360
		52,120		52,120

Additional Information (i) The club owned furniture Rs. 12,000 and Books Rs. 5,600 on 1st April, 2017. (ii) Salary and rent were outstanding Rs, 480 and Rs. 960 on 31st March, 2018. (iii) Subscription outstanding on 31st March, 2017 was Rs. 1,600 and on 31st March 3 Was Rs. 2,000. Prepare income and expenditure account and balance sheet for the year ending 31st March, 2018.

Answer:

                                                Income and Expenditure Account Dr                                             for the year ending 31st March, 2018                                                         Cr

Expenditure		Amt (Rs.)	Income		Amt (Rs.)
To Loss on Sale of Furniture		1,040	By Subscription	21,200
To Salary	2,400		(+) Subscription Outstanding for Current Year (2,000-640)	1,360	22,560
(+) Outstanding for Current Year	480	2,880	By Sale of Old Newspaper		1,000
To Newspaper		1,640	By Government Grant		8,000
To Rent	5,440		By Interest on Investment	360
(+) Outstanding for Current Year	960	6,400	(+) Accrued Interest	720	1,080
To Surplus, i.e. Excess of Income
Over Expenditure		19,880
		32,640			32,640

Balance Sheet as at 31st March, 2018

Liabilities		Amt (Rs.)	Assets		Amt (Rs.)
Salary Outstanding		480	Cash		8,960
Rent Outstanding		960	Subscription Outstanding
Advance Subscription		400	Previous Year (1,600 ? 960)	640
Capital Fund	34,840		Current Year (2,000 ? 640)	1,360	2,000
(+) Surplus	19,880	54,720	9% Investments		16,000
			Accrued Interest on Investment		720
			Books	5,600
			(+) Purchase	8,480	14,080
			Furniture	12,000
			(+) Purchase	8,400
				20,400
			(-) Sale	(5,600)	14,800
		56,560			56,560

Balance Sheet As at 31st March, 2017

Liabilities	Amt (Rs.)	Assets	Amt (Rs.)
Capital Fund	34,840	Cash	15,640
		Furniture	12,000
		Books	5,600
		Subscription Outstanding	1,600
	34,840		34,840

Working Note Accured Interest on Investments \[=16,000\times \frac{9}{100}\times \frac{9}{12}-360=1,080-360=\text{Rs}\text{.}\,720\]