question_answer

The following is the receipts and payments account of Queen's Club for the year ended 31st March, 2018: Receipts and Payments Account Dr                                             for the year ending 31st March,2018                                                          Cr

Receipts	Amt (Rs.)	Payment	Amt (Rs.)
To Balance b/d	1,82,000	By Salaries	1,66,000
To Subscriptions	1,80,000	By Stationery	32,000
To Tournament Fund	1,64,000	By Rent	48,000
To Interest (Investment)	65,000	By Telephone Expenses	8,000
To Donations	1,12,000	By Sports Material	78,000
To Sale of Concert Tickets	2,47,000	By 6% Investments	5,00,000
		By Miscellaneous Expenses	24,000
		By Concert Expenses	58,000
		By Balance c/d	36,000
	9,50,000		9,50,000

The following additional information is provided;

(i) Subscription include Rs. 22,000 for 2016 - 17 and Rs. 8,000 for 2018 - 19.

(ii) Stock of stationery on 31st March, 2017 and 2018 was Rs. 4,200 and Rs. 6,400 respectively.

(iii) Stock of sports material at the beginning and end of the year were Rs. 18,000 and Rs. 31,000 respectively.

(iv) Rent includes Rs. 4,000 paid for March, 2017, Rent for March, 2018 is outstanding.

(v) Telephone expenses include Rs. 3,000 as quarterly rent upto 31st May, 2018.

(vi) The value of building as on 31st March, 2017 was Rs. 8,00,000 and you are required to write-off depreciation @ 5%.

(vii) The value of investments on 31st March, 2017 was Rs. 10,00,000 and the club made similar additional investment during the year on 1st October, 2017.

You are required to prepare income and expenditure Account of the club for the year ended 31st March, 2018.

Answer:

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

Expenditure		Amt (Rs.)	Income		Amt (Rs.)
To Salaries		1,66,000	By Subscription	1,80,000
To Stationery	32,000		(-) Subscription Received for
(+) Stock on 31st March, 2017	4,200		2016-17	(22,000)
	36,200			1,58,000
(-) Stock on 31st March, 2018	(6,400)	29,800	(-) Subscription Received for
To Rent	(48,000)		2018-19	(8,000)	1,50,000
(-) Rent Paid for March, 2017	(4,000)		By Interest on Investment	65,000
	44,000		(+) Accrued Interest (W.N.1)	10,000	75,000
(+) Outstanding Rent for March,			By Donations		1,12,000
2018	(4,000)	48,000	By Sale of Concert Tickets		2,47,000
To Telephone Expenses	8,000
(-) Prepaid\[\left( 3,000\times \frac{2}{3} \right)\]	(2,000)	6,000
To Sports Material	78,000
(+) Stock at the beginning	18,000
	96,000
(-) Stock at the End	(31,000)	65,000
To Miscellaneous Expenses		24,000
To Concert Expenses		58,000
To Depreciation on Building		40,000
\[(8,00,000\times 5%)\]
To Excess of income over
Expenditure	1,47,200
	5,84,000				5,84,000

                        Working Note

	Amt (Rs.)
Calculation of interest on investment
Interest on Investment \[\left( 10,00,000\times \frac{6}{100} \right)\]	60,000
(+) Interest on Additional Investment \[\left( 5,00,000\times \frac{6}{100}\times \frac{6}{12} \right)\]	15,000
	75,000
(-) Interest Received during the Year	(65,000)
Amount of Accrued Interest	10,000