Dr. Vinod commenced Medical practice on 1.4.2006. He has prepared the following Receipts and payments account for the years 31.3.2007. [ Modified, September, 2009]


Receipts and payments account for the year 31st March 2007
Receipts
Amount
Payments
Amount
To Cash Introduced (Capital Fund)
35000
By Furniture
30000
To Income from Visits
35000
By Honorarium to Doctor
20000
To Receipts from Dispensary
75000
By Equipments
40000
To Miscellaneous receipts
6000
By Purchase of Drugs
20000
To Interest on Investments
1500
By Compounders Salary
22000
To Receipts from Operation Fees
9000
By Rent of Dispensary
6000


By Conveyance Charges
2000


By Stationery
600


By Operation Expenses
8000


By Lighting
400


By Journals and Newspapers
800


By Telephone Expenses
500


By Investments
7200


By Balance C/d
4000

161500

161500

Adjustments.
i.                 Rs. 50000 were still to be received on account of the visits.
ii.                Compounder salary of Rs. 300 and Bill of stationary Rs. 10000 and Rent of dispensary Rs. 10000 are outstanding.
iii.               50% amount of conveyance charges were for private use.
iv.               Stock of Drugs on hand was estimated at Rs. 4000.
v.                Furniture and Equipments are to be depreciated at 10%.
Prepare Income and expenditure account for the year ended 31st March 2007 and Balance sheet as on that date from the above information.

Solution: In the books of Dr. Vinod
Income and Expenditure A/c for the year ended 31.03.07
Expenditure
Amount
Amount
Income
Amount
Amount
To Honorarium to Doctor

20000
By income from Visits
35000

To Drugs

16000
(+) Outstanding
50000
85000
To Compounder Salary
22000

By Receipts from Dispensary

75000
(+) Outstanding
300
22300
By Miscellaneous receipts

6000
To Rent of Dispensary
6000

By Interest on Investment

1500
(+) Outstanding
10000
16000
By Receipts from operation fees

9000
To Conveyance Charges
2000




(-) Drawings
-1000
1000



To Stationery
600




(+) Outstanding
10000
10600



To Operation Expenses

8000



To Lighting

400



To Journal & Newspapers

800



To Telephone Expenses

500



To Depreciation





Furniture
3000




Equipment
4000
7000



To Surplus
[Income Over Expenditure]

73900





176500


176500

Balance Sheet as on 31.03.07

Liability
Amount
Amount
Asset
Amount
Amount
Capital Fund
35000

Furniture
30000

(-)Conveyance Drawings
-1000

(-) Depreciation
-3000
27000

34000

Equipments
40000

(+) Surplus
73900
107900
(-) Depreciation
-4000
36000
Outstanding


Investments

7200
Compounder salary
300

Cash Balance

4000
Stationery
10000

Outstanding Visits

50000
Rent of Dispensary
10000
20300
Stock of Drugs

4000








128200


128200