From the following Receipts and payments account of Western Gymkhana for the year ended 31st March, 2007 and other information, prepare Income and Expenditure account for the year ended on and a Balance Sheet as at that date. (March 2008, modified)

Receipts	Amount	Payments	Amount
To Balance B/f	1040	By Salaries	1300
To Subscriptions for :		By Entertainment Expenses	645
2006	85	By Electric Charges	234
2007	4000	By General Expenses	350
2008	103	By Rates & Taxes	120
To Donations	1200	By Investments	3000
To Entertainment Receipts	876	By Stationery & Printing	241
To Interest	81	By Expenses of 2006	600
To Entrance Fees	1000	By Fixed Deposit	1000
		By Balance C/f	895
	8385		8385

i.             The Gymkhana has 450 members paying an annual subscription of Rs. 10/- each.

ii.            Rs. 20/- is still in arrears towards subscription for the year 2006.

iii.          Carry forward Rs. 20/- for rates paid in advance.

iv.           Provide Rs. 200/- for salaries outstanding.

v.            The Gymkhana owns Land and Building standing in the books of Rs. 15,000/- and Furniture standing at Rs. 1,150, on which depreciation at 5% and 20% respectively is to be written off.

vi.           The Capital Fund as on 1^st April, 2006 was Rs. 16,695/-

vii.         50% of the Entrance Fees is to be capitalised. Donations are capitalised.

Solution: In the books of Western Gymkhana

Income and Expenditure A/c for the year ended 31.03.07

Expenditure	Amount	Amount	Income	Amount	Amount
To Salaries	1300		By Subscription	4000
(+) Outstanding	200	1500	(+) Outstanding	500	4500
To Entertainment Expenses		645	By Donations	1200
to Electric Charges		234	(-) Capitalized	-1200	NIL
To General Expenses		350	By Entertainment Receipts		876
To Rates & Taxes	120		By Interest		81
(-) Prepaid	-20	100	By Entrance Fees	1000
To Stationery & Printing		241	(-) Capitalized	-500	500
To Depreciation
Land & Building	750
Furniture	230	980
To Surplus [Income Over Expenditure]		1907
		5957			5957

Balance Sheet as on 31.03.07

Liability	Amount	Amount	Asset	Amount	Amount
Capital Fund	16695		Outstanding Subscription of current year		500
(+) Entrance Fees	500		Outstanding Subscription of Last Year		20
	17195		Investments		3000
(+) Donations	1200		Fixed Deposits		1000
	18395		Cash Balance		895
(+) Surplus	1907	20302	Prepaid Rates		20
Advance Subscription  of Next Year		103	Land & Building	15000
O/S Salaries		200	(-) Depreciation	-750	14250
			Furniture	1150
			(-) Depreciation	-230	920
		20605			20605