SSC BOARD PAPERS IMPORTANT TOPICS COVERED FOR BOARD EXAM 2024

### Chapter 2: Accounts of ‘Not for Profit’ Concerns

Balbharati Solutions for Book-keeping and Accountancy 12th Standard Hsc Maharashtra State Board.

Chapter 2: Accounts of ‘Not for Profit’ Concerns

 Select the most appropriate alternative from those given below. Write the Word/ Term/ Phrase which can substitute of the following statement State whether the following statement is True or False with reasons Fill in the blank Answer in one sentence only. Find odd one

Complete the Table:

 Sr. No. Income (₹) Expenditure (₹) Surplus/Deficit (₹) 1 10,000 ___________ ? 5,000 (Deficit) 2 8,000 ___________ ? 4,000 (Surplus) 3 ___________ ? 15,000 8,000 (Surplus) 4 7,500 9,000 ___________ ? 5 15,000 11,300 ___________ ?

Complete the Table:

Salaries paid during the year

 Sr.No Total ₹ Prepaid/Outstanding ₹ Expenditure for the year 1 1,100 Prepaid 100 _____ ? 2 2,700 Prepaid _____ ? 2,000 3 8,250 Prepaid _____ ? 6,650 4 1,200 Outstanding 200 _____ ? 5 _____ ? Outstanding 600 5,100 6 1,800 Outstanding _____ ? 2,200

Complete the Table:

 Sr.No Total Received ₹ Rent received in Advance/Accrued ₹ Income for the year ₹ 1 1,300 Received in Advance 200 _____ ? 2 _____ ? Received in Advance 400 1,400 3 2,650 Received in Advance _____ ? 2,000 4 _____ ? Accrued 290 3,190 5 1,700 Accrued _____ ? 2,150 6 2,600 Accrued 500 _____ ?

Calculate the following

 10 % p.a. Depreciation on Furniture ₹ 50,000 (for three months) FOR SOLUTION CLICK HERE 12% p.a. Interest on Bank loan ₹ 80,000 for 1 year. FOR SOLUTION CLICK HERE Opening stock of stationery ₹ 5,000, purchases of stationery ₹ 7000, outstanding stationery bill ₹ 12,000, closing stock ₹ 1000. What is the amount of stationery consumed? FOR SOLUTION CLICK HERE Salary ₹ 10,000, outstanding salary ₹ 5,000. Calculate the salary to be debited to  Income and Expenditure Account. FOR SOLUTION CLICK HERE Library Books ₹ _________ ? Less 10 % Depreciation ₹ 5,000 = ₹ 45,000. FOR SOLUTION CLICK HERE

Practical Problems | Q 1 | Page 114

(Calculation of stationery consumed during the year)

 Liabilities Amt. ₹ Amt. ₹ Assets Amt. ₹ Amt. ₹ Stock of Stationery 400

Receipts and Payments Account for the year ending 31.03.2019

 Receipts Amt. ₹ Amt. ₹ Payments Amt. ₹ Amt. ₹ By Stationery Purchased 6,300

1.  1,000 Outstanding for Stationery bill.

2. Stock of Stationery as on 31.03.2019 was valued at 1,800

With the above information, calculate the amount of Stationery consumed during the year and show its presentation in final Accounts of a concern.

Solution:

In the books of _____________

Income and Expenditure Account for the year ended 31st March, 2019

 Expenditure Amount (₹) Amount (₹) Income Amount (₹) Amount (₹) To Stationery Consumed during the Year Opening Stock 400 Add: Stationery Purchased during the Year 6,300 Add: Credit Purchase of Stationery (Outstanding bill) 1,000 7700 Less: Closing Stock of Stationery 1800 5,900

Practical Problems | Q 2 | Page 115

Balance Sheet as on 01.04.2018

 Liabilities Amt. ₹ Amt. ₹ Assets Amt.  ₹ Amt .₹ Subscription received in Advance for 2018 - 19 20,000 Outstanding Subscription 2016 - 17 26,000 2017 - 18 35,000 61,000

Receipts and Payments Account for the year ending 31.03.2019.

 Liabilities Amt. ₹ Amt. ₹ Assets Amt.  ₹ Amt .₹ Subscription received in Advance for 2018 - 19 20,000 Outstanding Subscription 2016 - 17 26,000 2017 - 18 35,000 61,000

Outstanding Subscription for 2018 - 19 is  32,000

With the above information present the item Subscription in Income and Expenditure Account for the year ended 31.03.2019 Balance Sheet as on the date.

Solution:

In the books of ________________

Income and Expenditure Account for the year ended 31st March 2019

 Expenditure Amount (₹) Amount (₹) Income Amount (₹) Amount (₹) By Subscription 4,10,000 Add: Outstanding Subscription for Current Year 2018–19 32,000 4,42,000 Add: Subscription of Current Year received in Advance in the Previous Year 2017–18 20,000 4,62,000

Balance Sheet as on 31st March 2019

 Liabilities Amt (₹) Amt (₹) Assets Amt (₹) Amt (₹) Subscription received in Advance for the Year 2019 – 20 21,000 Outstanding Subscription for Add: Year 2018–19 (Current year) 32,000 Add : Year 2016–17 (26,000 – 23,000) 3,000 Add : Year 2017–18 (35,000 – 30,000) 5,000 40,000

Working Note :

Outstanding subs. given in the balance sheet as on 01 – 04 – 2018 are  26,000 (for 2016–17) and  35,000 (for 2017 – 18). Against that as shown in receipt – Payment A/c  23,000 and  30,000 are received respectively. Means  3,000 and  5,000 are still outstanding which are known in the current year balance sheet.

Practical Problems | Q 3 | Page 115

Receipts and Payments Account for the year ending 31.03.2018.

 Receipts Amt. ₹ Amt. ₹ Payments Amt.₹ Amt. ₹ To Subscriptions 2016 - 17 2,000 2017 - 18 60,000 2018 - 19 4,500 66,500

Subscription Outstanding for the year 2017 - 18 is  6,000.

During previous year Subscription received in advance for 2017 - 18 is  2,000.

Outstanding subscription of 2016 - 2017 is  2,500

With the help of the above information present the item Subscription in Income and Expenditure Account for the year ending 31.03.2018 and Balance Sheet as on that date.

Solution:

In the books of _____________________

Income and Expenditure Account for the year ended 31st March, 2018

 Expenditure Amount (₹) Amount (₹) Income Amount (₹) Amount (₹) By Subscription (Year 2017–18) 60,000 Add: Outstanding Subscription of Current Year 2017–18 6,000 Add: Subscription received in Advance of Current Year in Previous Year 2,000 68,000

Balance Sheet as on 31st March, 2018

 Liabilities Amt (₹) Amt (₹) Assets Amt (₹) Amt (₹) Subscription received in Advance in the Current Year for the Year 2018 – 19 4,500 Outstanding Subscription for Current Year (2017–18) 6,000 Outstanding Subscription for the Year 2016 – 17 (2,500 – 2,000) 500

Practical Problems | Q 4 | Page 116

Following is the Receipts and Payments Account of “Satara Sports Club” Satara Prepare Income and Expenditure Account for the year ending 31.03.2019.

Receipts and Payments Account for the year ending 31.03.2019.

 Receipts Amt ₹ Amt ₹ Payments Amt ₹ Amt ₹ To Balance b/d By Salaries 5,000 Cash in hand 4,500 By Rent (Including ₹ 2,000 for 2017 - 18) 5,000 Cash at Bank 12,000 16,500 By Electricity Charges 1,450 To Subscription By Fixed Deposit 60,000 2017 - 18 4,000 By Printing and Stationery 750 2018 - 19 44,500 By General Expenses (Including ₹ 500 paid for next year) 5,500 2019 - 20 3,500 52,000 By Sports Material Purchased 40,000 To Entrance fees 8,000 By Balance c/d To Donation for Building fund 70,000 Cash in Hand 8,900 To Interest 600 Cash at Bank 25,000 33,900 To Sale of furniture(Book Value ₹ 8000) 4,500 1,51,600 1,51,600

1) Outstanding Subscription for Current Year is  4,500

2) Outstanding Rent for Current Year amounted to  1,000

3) Entrance Fees are to be treated as Revenue Income

4) Stock of Sports Material as on 01.04.2018  6,000 and on 31.03.2019  14,000

Solution:

In the books of ‘ Satara Sports Club’ Satara

Income and Expenditure Account for the year ended on 31st March 2019

 Expenditure Amount ₹ Amount ₹ Income Amount ₹ Amount ₹ To Salaries 5,000 By Subscription received for 2018 – 19 44,500 To rent 5,000 Add: Outstanding Subscription for Current Year 4,500 49,000 Add: Outstanding rent of Current Year 1,000 By Entrance Fees 8,000 Less: rent received for the Year 2017 – 18 2,000 4,000 By Interest 600 To Electricity Charges 1,450 To Printing and Stationery 750 To General Expense 5,500 Less: Amount Paid for Next Year 500 5,000 To Sports Material Consumed Opening Stock 6,000 Add: Sports Material Purchased in Current Year 40,000 46,000 Less: Closing Stock of Sports Material 14,000 32,000 To Loss due to Sale of Furniture (8,000 – 4,500) 3,500 To Surplus (Excess of income over expenditure) 5,900 57600 57600

Working Notes :

(1) Entrance fees are to be treated as revenue income. Therefore the entire amount is recorded on the income side.

(2) Since the selling price of Furniture  4,500 is lower than its cost price of  8,000, there is Loss on sale of furniture.

It is calculated as follows :

Loss on sale of furniture = Book value (cost) – Selling price

= 8,000 – 4,500

3,500

It is debited to Income and Expenditure A/c.

Practical Problems | Q 5 | Page 117

“Bhartiya Kala Kendra”, Solapur gives you the following information, for the year ended on 31.03.2018 Prepare Income and Expenditure Account for the year ending 31.03.2018

Receipts and payments Account for the year ending 31.03.2018.

 Receipts Amount ₹ Payments Amount ₹ To Balance b/d By Stationery 600 Cash in Hand 200 By Furniture Purchased 7,000 Cash at Bank 12,500 By Investments in govt securities 14,000 To Locker Rent 400 By Expenses of Drama 3,000 To Entrance fees 2,900 By Postage 450 To Sale of old newspapers 250 By Magazine and newspaper 600 To Receipts from Drama 9,000 By Salaries 4,400 To Legacies 12,000 By Balance c/d To Interest of Govt. Securities 400 Cash in Hand 700 To Miscellaneous Receipts 400 Cash at Bank 7,300 38050 38050

1) Legacies are to be capitalized

2) Outstanding Salary  200

3) 50 % of Entrance Fees are to be Capitalised

Solution:

In the books of Bhartiya Kala Kendra, Solapur

Income and Expenditure Account for the year ended 31st March

 Expenditure Amount (₹) Amount (₹) Income Amount (₹) Amount (₹) To Stationery 600 By Locker rent 400 To Expenses of Drama 3,000 By Entrance Fees 2,900 To Postage 450 Less: 50 % Capitalised 1,450 1,450 To Magazine and Newspaper 600 By Sale of Old Newspapers 250 To Salaries 4,400 By receipts from Drama 9,000 Add: Outstanding Salaries 200 4,600 By Interest on Govt. Securities 400 To Surplus(Excess of income over expenditure) 2,650 By Miscellaneous receipts 400 11900 11900

Practical Problems | Q 6 | Page 117

From the following particulars relating to “Radha-Krishna Charitable Hospital” Pune. Prepare Income and Expenditure Account for the year ending 31.03.2020 and Balance Sheet as on that date.

Receipts and payments Account for the year ending 31.03.2020.

 Receipts Amount ₹ Payments Amount ₹ To Balance b/d By Medicines Purchased 41,000 Cash 8,230 By General Expenses 1,050 To Subscriptions 52,000 By Salaries 23,500 To Donations (General) 17,500 By Stationery 2,000 To Interest in Investments 10,000 By Expenses on Charity Show 550 To Proceeds from Charity Show 8,530 By Surgery and Dispensary Exp 4,200 By Equipments 10,000 By Balance c/d Cash in Hand 960 Cash at Bank 13,000 13,960 96,260 96,260

 Particulars 01.04.2019 ₹ 31.03.2020 ₹ 1. Subscription Due 310 350 2. Subscription Received in Advance 600 150 3. Stock of Medicine 8,000 11,000 4. Estimated Value of Equipment 15,000 ? 5. Building 40,000 ? 6. Capital Fund 1,70,940 ? 7. 10 % Investment 1,00,000 ?

Provide Depreciation on Equipments  1,900 and on Building  1,500

Solution:

In the books of Radha-Krishna Charitable Hospital, Pune

Income and Expenditure Account for the year ended 31st March 2020

 Expenditure Amount(₹) Amount(₹) Income Amount(₹) Amount(₹) To Medicines Consumed By Subscriptions 52,000 Opening Stock 8,000 Add: Outstanding of Current Year 350 Add: Purchases 41,000 Add: received in Advance in Previous Year 600 49,000 52,950 Less: Closing Stock 11,000 38,000 Less: received in Current Year of the Previous Year 150 To General Expenses 1,050 Less: Subscription due of Previous Year 310 52,490 To Salaries 23,500 By Donations (General) 17,500 To Stationery 2,000 By Interest on Investments 10,000 To Expenses on charity show 550 By Proceeds from Charity Show 8,530 To Surgery and Dispensary Expense 4,200 To Depreciation Equipments 1,900 Building 1,500 3,400 To Surplus(Excess of income over expenditure) 15,820 88,520 88,520

Balance Sheet as on 31st March 2020

 Liabilities Amount(₹) Amount(₹) Assets Amount(₹) Amount(₹) Capital Fund 1,70,940 Outstanding Subscription 350 Add : Surplus 15,820 1,86,760 Closing Stock of Medicines 11,000 Subscription received in Advance 150 Equipments opening Balance 15,000 Add: Purchases 10,000 25,000 Less: Depreciation 1,900 23,100 Buildings 40,000 Less: Depreciation 1,500 38,500 10% Investments 1,00,000 Cash in Hand 960 Cash at Bank 13,000 1,86,910 1,86,910

Working Notes :

(1) To find medicines consumed, here in the opening stock, purchases is added and the closing stock of medicine is subtracted.

(2) For equipment, in opening balance, add equipment purchased during the year and subtract depreciation to get the closing balance of equipment.

(3) Interest  10,000 is received on 10 % investments means there is no outstanding interest.

Practical Problems | Q 7 | Page 118

From the following transactions of Receipts and Payments Account of “Pavan - Putra Hanuma Vyayamshala” Parbhani, and the adjustments given, you are required to prepare Income and Expenditure Account and Balance Sheet as on 31st March 2019.

Receipts and Payments Account for the year ending 31.03.2019.

 Receipts Amount₹ Payments Amount₹ To Balance b/d By Salaries 6,000 Cash in Hand 5,000 By Entertainment Expenses 2,480 To Subscriptions By Sundry Expenses 1,300 2018 - 19 18,000 By Electricity Charges 1,200 2019 - 20 410 18,410 By Rent 700 To Donations 6,000 By Investment 15,000 To Receipts from Entertainment 5,400 By Printing and Stationery 800 To Interest 400 By Postage 3,200 To Entrance fees 6,200 By Fixed Deposit 3,900 By Balance c/d Cash in Hand 830 Cash at Bank 6000 6,830 41,410 41,410

1) There are 500 members paying an annual Subscription of  50 each

2) Outstanding Salary was  1,200

3) The Assets on 01.04.2018 were as follows: Building  50,000, Furniture  15,000

4) Provide depreciation on Building and Furniture at 5% and 10% respectively.

5) 50% Entrance Fee is to be capitalized.

6) Interest on Investment at 5% p. a. has accrued for 6 months.

7) Capital Fund  70,000 on 01.04.2018

Solution:

In the books of Pavan-putra Hanuman Vyayamshala, Parbhani

Income and Expenditure Account for the year ended on 31st March, 2019

 Expenditure Amount₹ Amount₹ Income Amount₹ Amount₹ To Salaries 6,000 By Subscription 18,000 Add*: Outstanding 1,200 7,200 Add: Outstanding Subscription for Current Year 7000 25000 To Entertainment Expenses 2,480 By Donations 6,000 To Sundry Expenses 1,300 By receipts from Entertainment 5,400 To Electricity Charges 1,200 By Interest 400 To Rent 700 By Outstanding Interest on Investments (6 Months) 375 To Printing and Stationery 800 By Entrance Fees 6,200 To Postage 3,200 Less : 50 % capitalised 3,100 3,100 To Depreciation Building 2,500 Furniture 1,500 4,000 To Surplus (Excess of income over expenditure) 19,395 40,275 40,275

Balance Sheet as on 31st March, 2019

 Liabilities Amount ₹ Amount ₹ Assets Amount ₹ Amount ₹ Capital Fund 70,000 Building 50,000 Add: Surplus 19,395 Less: Depreciation 2,500 47,500 Add: 50 % Entrance Fees 3,100 92,495 Furniture 15,000 Outstanding Salary 1,200 Less: Depreciation 1,500 13,500 Subscription received in Advance 410 Investments 15,000 Outstanding Interest on Investments 375 Fixed Deposit 3,900 Cash in Hand 830 Cash at Bank 6,000 Outstanding Subscription of Current Year 7,000 94,105 94,105

Working Notes :

(1) Interest on investment is receivable for 6 months

I = PNR/100 = 15000 × (5  ÷ 100) × (6  ÷ 12) =   375 (outstanding interest on investment)

(2) 50% of entrance fees (i.e. 6200  ÷ 2 =   3100) is to be capitalised means add it to the capital fund.

(3) Total subscription of current year = 500 members ×  50 =  25,000

But actual subscription received =  18,000

means difference (25,000 – 18,000) of  7,000 is outstanding subscription.

Practical Problems | Q 8 | Page 119

“Jeevan Jyoti Art Circle” a newly established concern has presented the following information.

Receipts and Payments Account for the year ending 31.03.2018.

 Receipts Amount₹ Amount₹ Payments Amount₹ Amount₹ To Admission fees 22,000 By Furniture 12,000 To Subscriptions 40,000 By Stationery 4,000 To Donations 18,000 By Office Rent 2,600 By Newspapers & Periodicals 300 By Telephone Expenses 560 By Investments 23,000 By Balance c/d Cash in Hand 7,540 Cash at Bank 30,000 37,540 80,000 80,000

1) Subscription Outstanding for the year was  5,000

2) Depreciate Furniture @10 % p.a

3) Full amount of Admission Fees and 50*% Donations are to be capitalized.

You are required to prepare Income and Expenditure Account for the year ending 31.03.2018 and Balance Sheet as on that date.

Solution:

In the books of Jeevan Jyoti Art Circle

Income and Expenditure Account for the year ended 31st March 2018

 Expenditure Amount₹ Amount₹ Income Amount₹ Amount₹ To Stationery 4,000 By Donations 18,000 To Office rent 2,600 Less: 50 % Capitalised 9,000 9,000 To Newspapers and Periodicals 300 By Subscription 40,000 To Telephone Expenses 560 Add: Outstanding of Current Year 5,000 45,000 To Depreciation Furniture 1,200 To Surplus (Excess of income over expenditure) 45,340 54000 54000

Balance Sheet as on 31st March, 2018

 Liabilities Amount₹ Amount₹ Assets Amount₹ Amount₹ Capital Fund - Furniture 12,000 Add: Surplus 45,340 Less: Depreciation 1,200 10,800 Add: Admission Fees (Capitalised) 22,000 Investments 23,000 Add : Donations (50 % Capitalised) 9,000 76,340 Cash in Hand 7,540 Cash at Bank 30,000 Outstanding Subscription 5,000 76,340 76,340

Working Notes:

The full amount of admission fees and 50% of donations are added to the surplus amount to get the capital funds. (Opening balance of the capital fund is not given.)

Practical Problems | Q 9 | Page 119

Given below is the Receipts and Payments Account of “Vithai Mahila Mandal” Pandharpur for the year ending 31.03.2018.

Prepare an Income and Expenditure Account for the year ended 31.03.2018 and Balance Sheet as on that date.

Receipts and Payments Account for the year ending 31.03.2018.

 Receipts Amount₹ Amount₹ Payments Amount₹ Amount₹ To Balance b/d By Stationery 6000 Cash in Hand 3,000 By Repairs to Furniture 950 Cash at Bank 20,000 23,000 By Rent 8,300 To Entrance Fees 3,500 By Salaries 15,000 To Subscription 19,000 By Miscellaneous Expenses 450 To Miscellaneous Receipts 850 By Balance c/d Cash in Hand 1,650 Cash at Bank 14,000 15,650 46,350 46,350

1) Capital Fund on 01.04.2017 was  90,000

2) Outstanding Subscription  4,000

3) Entrance Fees are to be capitalized

4) Rent paid includes  800 paid for April 2018

5) They have the following Assets and Liabilities 01.04.2017

Furniture  9,000,

Building  70,000,

Outstanding Expenses  12,000

Solution:

In the books of Vithai Mahila Mandal, Pandharpur

Income and Expenditure Account for the year ended 31st March 2018

 Expenditure Amount₹ Amount₹ Income Amount₹ Amount₹ To Stationery 6,000 By Subscription 19,000 To Repairs to Furniture 950 Add: Outstanding Subscription 4,000 23,000 To Rent 8,300 By Miscellaneous receipts 850 Less: Prepaid Rent 800 7,500 By Deficit (Excess of expenses over incomes) 6,050 To Salaries 15,000 To Miscellaneous Expense 450 29,900 29,900

Balance Sheet as on 31st March 2018

 Liabilities Amount₹ Amount₹ Assets Amount₹ Amount₹ Capital Fund 90,000 Furniture 9,000 Add: Entrance Fees (Capitalised) 3,500 Building 70,000 Less: Deficit 6,050 87,450 Outstanding Subscription 4,000 Outstanding Expenses 12,000 Cash in Hand 1,650 Cash at Bank 14,000 Prepaid rent 800 99,450 99,450

Working Notes :

(1) Outstanding subscription of  4,000 is first added to subscription received on the credit side of Income and Expenditure A/c and then it is shown on the Assets side of the Balance Sheet.

(2) The entire amount of the entrance fees  3,500 is added to the capital fund.

(3) Prepaid  800 is first deducted from rent paid on the debit side of Income & Expenditure A/c and then shown on the Assets side of the Balance Sheet.

(4) Outstanding expenses  12,000 is directly shown on the Liabilities side of the Balance Sheet.

Practical Problems | Q 10 | Page 120

From the following Receipts and Payments Account “K.B.P. Engineering College” Nashik for the year ending on 31.03.2019 and additional information, prepare Income and Expenditure Account for the year ending 31.03.2019 and Balance Sheet as on that date.

Receipts and payments Account for the year ending 31.03.2019.

 Receipts Amount ₹ Payments Amount ₹ To Balance b/d By Salaries to Teaching Staff 11,70,000 Cash in Hand 18,000 By Electricity Charges 55,000 Cash at Bank 1,00,400 By Books 61,000 To Interest 55,000 By Furniture 51,000 To Subscriptions 28,300 By Stationery 21,850 To Life Membership fees 25,000 By Fixed Deposit (31.03.2019) 8,50,000 To Donation 7,00,000 By Balance c/d To Tuition Fees 12,30,000 Cash in Hand 16,650 To Term Fees 2,00,800 Cash at Bank 2,00,000 To Sundry Receipts 8,000 To Admission Fees (Revenue) 60,000 24,25,500 24,25,500

 Particulars 01.04.2018 ₹ 31.03.2019 ₹ Books 6,00,000 6,00,000 Furniture 3,19,000 3,00,000 Building Fund 10,00,000 ? Fixed Deposit 9,10,000 ? Capital Fund 9,47,400 ?

1) 50% of Donation are for Building Fund and the balance is to be treated Revenue Income.

2) Outstanding subscription  5,300

3) Life membership fees are to capitalised

Solution:

In the books of K.B.P. Engineering College, Nashik

Income and Expenditure Account for the year ended on 31st March, 2019

 Expenditure Amount ₹ Amount ₹ Income Amount ₹ Amount ₹ To Salaries to Teaching Staff 11,70,000 By Interest 55,000 To Electricity Charges 55,000 By Subscription 28,300 To Stationery 21,850 Add: Outstanding Subscription 5,300 33,600 To Depreciation By Donations 7,00,000 Furniture 70,000 Less: 50 % for Building Fund 3,50,000 3,50,000 Books 61,000 1,31,000 By Tuition Fees 12,30,000 To Surplus(Excess of income over expenditure) 5,59,550 By Term Fees 2,00,800 By Sundry receipts 8,000 By Admission Fees 60,000 19,37,400 19,37,400

Balance Sheet as on 31st March, 2019

 Liabilities Amount₹ Amount₹ Assets Amount₹ Amount₹ Capital Fund 9,47,400 Outstanding Subscription 5300 Add: Surplus 5,59,550 Books 6,00,000 Add: Life Membership Fees (Capitalised) 25,000 15,31,950 Add: Purchases 61,000 Building Fund 10,00,000 6,61,000 Add: 50% of Donations 3,50,000 13,50,000 Less: Depreciation 61,000 6,00,000 Furniture 3,19,000 Add: Purchase 51,000 3,70,000 Less: Depreciation 70,000 3,00,000 Fixed Deposits (Old) 8,50,000 Cash in Hand 16,650 Cash in Bank 2,00,000 Fixed Deposits (New) 9,10,000 28,81,950 28,81,950

Working Notes :

(1) Life membership fees are to be capitalised, means add entire amount in capital fund.

(2) 50% of Donations of  7,00,000 i.e.,  3,50,000 is to be added to the Building Fund, and the remaining amount of donation i.e.,  3,50,000 is credited to Income and Expenditure A/c.

(3) The depreciation on Fixed assets is calculated by using following formula:

Depreciation = Opening balance + Purchases – Closing value

Depreciation on Books = 6,00,000 + 61,000 – 6,00,000

= 6,61,000 – 6,00,000

61,000

Depreciation on Furniture = 3,19,000 + 51,000 – 3,00,000

= 3,70,000 – 3,00,000

70,000

(4) Fixed Deposit:

 Opening balance given ₹ 910000 Fixed deposit (31 – 03 – 2019) (Newly purchased) ₹ 850000 ∴ Total fixed deposits ₹ 1760000

(5) Admission Fees  60,000 is recorded on the credit side of Income and Expenditure A/c because it is taken as revenue income.

Practical Problems | Q 11 | Page 121

From the following Balance Sheet and Receipts and Payments Account of “New English School”, Barshi, Prepare Income and Expenditure Account for the year ending 31.03.2020 and a Balance Sheet as on that date.

Balance Sheet as on 01.04.2019

 Liabilities Amount₹ Assets Amount₹ Capital Fund 6,43,000 Cash in Hand 6,000 Cash at Bank 10,000 Building 4,50,000 Furniture 72,000 Library Books 45,000 Computer Laboratory 60,000 6,43,000 6,43,000

Receipts and Payments Account for the year ending 31.03.2020

 Receipts Amount ₹ Amount ₹ Payments Amount ₹ Amount₹ To Balance b/d By Salary 90,000 Cash in Hand 6,000 By Library Books 14,000 Cash at Bank 10,000 16,000 By Office Rent 10,000 To Tuition Fees 90,000 By Printing and Stationery 22,000 To Term Fees 3,000 By Sundry Expenses 12,000 To Admission Fees 12,000 By Insurance 10,200 To Donation (Capital) 61,000 By Sport Expenses 8,000 To Interest Received 2,000 By Annual Gathering Exp 9,000 To Government Grant (Revenue) 1,20,000 By Furniture 50,000 To Sundry Receipts 11,000 By Repairs 15,000 By Balance c/d Cash in Hand 4,800 Cash at Bank 70,000 74,800 315000 315000

1) Outstanding Salary of  9,000

2) Outstanding Tuition Fees  15,000

3) Depreciate Library Books by  9,000 and Furniture by  10,000

Solution:

In the books of New English School, Barshi

Income and Expenditure Account for the year ended 31st March, 2020

 Expenditure Amount₹ Amount₹ Income Amount₹ Amount₹ To Salary 90,000 By Tuition Fees 90,000 Add: Outstanding Salary 9,000 99,000 Add: Outstanding tuition Fees 15,000 1,05,000 To Office rent 10,000 By Term Fees 3,000 To Printing and Stationery 22,000 By Admission Fees 12,000 To Sundry Expenses 12,000 By Interest Received 2,000 To Insurance 10,200 By Government Grant 1,20,000 To Sport Expenses 8,000 By Sundry Receipts 11,000 To Annual Gathering Expenses 9,000 To Repairs 15,000 To Depreciation Library Books 9,000 Furniture 10,000 19,000 To Surplus(Excess of income over expenditure) 48,800 2,53,000 2,53,000

Balance Sheet as on 31st March, 2020

 Liabilities Amount ₹ Amount ₹ Assets Amount ₹ Amount ₹ Capital Fund 6,43,000 Building 4,50,000 Add: Surplus 48,800 Furniture 72,000 Add: Donation 61,000 7,52,800 Add: Purchases 50,000 Outstanding Salary 9,000 1,22,000 Less: Depreciation 10,000 1,12,000 Library Books 45,000 Add: Purchases 14,000 59,000 Less: Depreciation 9,000 50,000 Computer Laboratory 60,000 Cash in Hand 4,800 Cash at Bank 70,000 Outstanding Tuition Fees 15,000 7,61,800 7,61,800

Working Notes :

(1) Donation (Capital) is added in Capital fund.

(2) Government Grant  1,20,000 is recorded on the credit side of Income & Expenditure A/c because it is revenue income of the organisation.

(3) Outstanding tuition fees  15,000 and outstanding salary  9,000 are added to respective head of Account and then they are shown separately on the Assets side and Liabilities side of Balance Sheet respectively.

Practical Problems | Q 12 | Page 122

Following is the Receipts Payments Account of “Dhananjay Library, Mumbai” for the year ending 31.03.2020

Receipts and Payments Account for the year ending 31.03.2020.

 Receipts Amount₹ Payments Amount₹ To Balance b/d 5,000 By Salaries 9,000 To Admission Fees 4,500 By Rent 7,500 To Subscriptions 20,000 By Investments 6,000 To Lecture Hall Hire Charges 4,200 By Stationery 1,350 To Miscellaneous Income 250 By Electricity Charges 850 To Interest on Investment 900 By Books 5,000 By Outstanding Expenses (2018 - 19) 500 By Balance c/d 4,650 34850 34850

You are required to prepare an Income and Expenditure Account for the year ended 31.03.2020 and Balance Sheet as on that day.

The following information is also made available to you.

1) On 31.03.2019, the Library had the following Assets also; Books at  50,000, Furniture  6,500, and Machinery of  30,000

3) Outstanding Salaries  1300 and for Rent  950

4) 50% of the Admission Fees should be capitalized.

5) Furniture to be depreciated at 10% p.a.

6) Library Books were purchased on 1st April 2019 charge Depreciation at 10% p. a.

7) The Investments were purchased on 01.04.2019 and they carry interest at 20*% p.a

Solution:

In the books of Dhananjay Library, Mumbai

Income and Expenditure Account for the year ended 31st March 2020

 Expenditure Amount ₹ Amount₹ Income Amount₹ Amount₹ To Salaries 9,000 By Subscription 20,000 Add: Outstanding Salary 1,300 10,300 Less: Subscription Received in Advance 500 19,500 To Rent 7,500 By Admission Fees 4,500 Add: Outstanding Rent 950 8,450 Less: 50% Capitalised 2,250 2,250 To Stationery 1,350 By Lecture Hall Hire Charges 4,200 To Electricity Charges 850 By Miscellaneous Income 250 To Depreciation By Interest on Investments 900 Furniture 650 Add: Outstanding Interest 300 1,200 Library Books(5000 + 500) 5,500 6,150 To Surplus(Excess of Income over expenditure) 300 27400 27400

Balance Sheet as on 31st March 2020

 Liabilities Amount₹ Amount₹ Assets Amount₹ Amount₹ Capital Fund 91,000 Machinery 30,000 Add : 50 % Admission 2,250 Books 50,000 Add: Surplus 300 93,550 Add: Purchases 5,000 Outstanding Salaries 1,300 55,000 Outstanding Rent 950 Less: Depreciation (5000 + 500) 5,500 49,500 Subscription Received in Advance 500 Furniture 6,500 Less: Depreciation 650 5,850 Investments 6,000 Add: Outstanding Interest 300 6,300 Cash in Hand 4,650 96300 96300

Working Notes :

(1) Opening Balance Sheet is prepared to find out opening capital fund :

Balance Sheet as on 31st March 2019

 Liabilities Amount₹ Assets Amount₹ Outstanding Expenses 500 Books 50,000 Capital Fund(Balancing figure) 91,000 Furniture 6,500 Machinery 30,000 Cash in Hand(Opening balance of Receipt – Payment A/c) 5,000 91500 91500

(2) Outstanding expenses of the previous year, paid in the current year so no entry for outstanding expenses (2018 – 19)

(3)

 Interest on Investment @ 20 % on ₹ 6,000 ₹ 1200 Interest on Investment received ₹ 900 Outstanding interest on investment ₹ 300

(4)

 Depreciation on library books at 10 % p.a. on opening balance of ₹ 50,000 (for whole year) ₹ 5000 On purchases on 01 – 04 – 2019 (for whole year) ₹ 1500 Total Depreciation ₹ 5500

(5) Subscriptions received in advance  500 is deducted from subscription received on credit side of Income and Expenditure A/c and then subscription received in advance is shown separately on the Liabilities side of the Balance Sheet.

(6) Outstanding salaries and outstanding rent are added to the respective head of Account on the debit side of the Income & Expenditure Account and both the outstanding items are recorded on the Liabilities side of the Balance Sheet.

Practical Problems | Q 13 | Page 123

From the following information supplied to you, prepare Income and Expenditure Account for the year ending on 31.03,2020 and Balance Sheet as on that date for “Morya Sports Club” Thane.

Balance Sheet as on 01.04.2019.

 Liabilities Amount ₹ Assets Amount ₹ Capital Fund 64,500 Machinery 69,000 Bank overdraft 38,000 Outstanding Subscriptions 8,000 Outstanding Salary 4,000 Prepaid Insurance Premium 2,000 Furniture 15,000 Cash in Hand 12,000 Outstanding Locker’s Rent 500 1,06,500 1,06,500

Receipts and Payments Account for the year ended 31.03.2020

 Liabilities Amount ₹ Payments Amount₹ To Balance b/d 12,000 By Balance b/d (Bank Overdraft)