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 31^st 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 31^st 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