Accounting For Not For Profit Organisation NCERT Solutions for Class 12 Accountancy Chapter 1 with Answers

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NCERT Solutions for Class 12 Accountancy Chapter wise

Questions for Practice

Q1. State the meaning of ‘Not-for-Profit’ Organisations.

Answer: Organisations that are established with the aim of providing services to society and not profit earning are called as Not-for-profit Organisations (NPO). Some organisations that come under NPO are hospitals, religious organisations and trade unions. An NPO earns income from life membership fees, subscriptions, grants, donations etc.

Q2. State the meaning of Receipt and Payment Account.

Answer: Receipts and Payments Account is a summary of the Cash Book. All cash receipts are recorded on the Receipts side (i.e. Debit side) and all cash payments are recorded on the Payments side (i.e. Credit side) of Receipts and Payments Account. It is prepared on the basis of cash and bank transactions recorded in the Cash Book. It begins with the opening balance of cash and bank and ends with the closing balances of cash and bank (balancing figure) at the end of the accounting period. It records all cash and bank transactions both of capital and revenue nature. It not only records the cash and bank transactions relating to the current accounting period, but also the cash and bank receipts (or payments) received during the current accounting period that may be related to the previous or next accounting period.

This account only helps us to ascertain the closing balance of the cash and bank and helps in assessing the cash position of an NPO.

Q3. State the meaning of Income and Expenditure Account.

Answer: Income and expenditure account is prepared to depict the result of a not for profit organisation during an accounting period. This principle of preparation of profit and loss accounts applies to the preparation of income and expenditure accounts. It is prepared on an accrual basis of accounting-based or on the principle of matching concept.

Q4. What are the features of Receipt and Payment Account?

Answer: The receipts and payments account has the following features:

1. It is known as cash book summary for NPO (Not-for-profit organisations) as it records all the cash and cash equivalents of the organisation.
2. This account shows cash transactions that are of revenue and capital nature
3. It does not follow the double entry bookkeeping system as it is a summary of transactions.
4. It does not include transactions that do not have cash or bank items.
5. It helps in revealing the cash position of the organisation

Q5. What steps are taken to prepare Income and Expenditure Account from a Receipt and Payment Account?

Answer: Following steps should be followed:

1. Exclude opening cash and bank balances and also do the same for closing cash and balances
2. Exclude income of the previous period and any such income that is received in advance
3. Exclude all items involving capital receipts and payments
4. Exclude expenditures that are of the previous or coming period
5. Include all incomes of the current period which are yet to be received
6. Include expenditures of current period which are yet to be paid.

Q6. What is subscription? How is it calculated?

Answer: Subscription is the main source of income for an NPO besides entrance fees, donations, grants, etc. Subscriptions refer to the amount of money paid by the members on periodic basis for keeping their membership with the organisation alive. It is paid monthly, quarterly, half yearly or annually by the members.

It is shown in the debit side of the Receipt and Payment Account with the total amount received during the year that may be related to the current period and to the previous and next accounting period.

While calculating subscription for the current period, advance subscription received for the current period in the previous period and outstanding subscription for the current period are added to the subscription received during the current period. Whereas, on the other hand, advance subscription received for the next accounting period during the current period and outstanding subscription for the preceding period are deducted from the subscription received during the current period.

Q7. What is Capital Fund? How is it calculated?

Answer: The excess of assets over liabilities in the case of a not for profit organisation is called a capital fund. The balance of income and expenditure account in the form of surplus or deficit is transferred to the Capital fund every year. This fund is also called an accumulated fund or general fund. It is calculated as:

Long Answer Questions

Q1. Explain the statement: “Receipt and Payment Account is a summarised version of Cash Book”.

Answer: A receipts and payments account (R & P Account) is a summary of actual cash receipts and payments that is extracted from the cash book over a certain time period. All the cash received is recorded on the Receipts and all cash payments are recorded in Payments side of the R & P Account. All the cash and bank transactions are recorded in Cash Book and this book is created on the basis of all these transaction. All cash and bank transactions that are of revenue and capital nature gets recorded. It records all transactions i.e. bank receipts and cash receipts.

This account helps in determining the closing balance of bank and cash receipts and thereby assess cash position of a Not-for-profit organisation or NPO.

Here are some similarities between Cash Book and Receipts and Payments Account:

1. Both are real accounts.
2. Only transactions of cash and bank are recorded
3. There is no distinction between Revenue and Capital Items
4. Helps in assessing the cash position of an organisation
5. Starts with an opening balance consisting of cash and bank and concludes with closing balance of cash and bank.

Therefore, it can be said that Receipt and Payments Account is a summarised version of cash book.

Q2. “Income and Expenditure Account of a Not-for-Profit Organisation is akin to Profit and Loss Account of a business concern”. Explain the statement.

Answer: The account containing all expenses and losses for current accounting period prepared by a Not-for-profit organisation is called as Income and Expenditure (I & E) account, while a similar account prepared by profit earning organisation is called as Profit and Loss Account (P & L).

Here are some of the similarities between I & E and P & L accounts:

1. Accrual basis is followed for the preparation of both accounts.
2. Expenses and losses are recorded on Expenditure (debit) side and gains and income are recorded on Income (credit) side.
3. Records only revenue items related to current accounting period.
4. Both exhibit nature similar to nominal accounts

Therefore, it can be said that from the above statements that Income and Expenditure account of a Not-for-Profit Organisation is akin to Profit and Loss Account of a business concern.

Q3. Distinguish between Receipts and Payments Account and Income and Expenditure Account.

Answer:

Q4. Explain the basic features of Income and Expenditure Account and of Receipt and Payment Account.

Answer: The following are the features of the income and expenditure account:

• It is a nominal account so expenses and losses are debited while gains and incomes are credited to this account.
• It is prepared for an accounting period showing all expenses and incomes of the accounting period are shown whether paid or due.
• Income and expenditure accounts are prepared on an accrual basis to show adjustments related to outstanding expenses, prepaid expenses and accrued income received in advance are made. Similarly provision for doubt that depreciation is made.
• It does not include capital expenditures and capital receipts.
• Both cash and non-cash items like bad depreciation etc are taken into consideration.
• If an asset is sold during the year, profit on the sale of assets for loss on sale of the asset is shown in the income and expenditure account.
• The balance of income and expenditure accounts at the end represents their surplus or deficit.
• Income and expenditure accounts are followed by a balance sheet which consists of personal accounts and real accounts.

The following are the features of the receipt and payments account:

• The receipts and payments account is a summarised form of cash book so it is a real account. Thus, all receipts are recorded on the debit side and all payments are recorded on the credit side.
• All the receipts and payments are recorded whether they are of capital nature or revenue nature. The basis of recording is cash basis.
• It starts with opening the balance of cash in hand or cash at the bank. Cash always has a debit balance while banks may have debit or credit balance(overdraft). Similarly, the closing balance also represents cash in hand or cash at the bank.
• No adjustment for outstanding, depreciation, accrued income, etc. is made in it as all transactions are recorded on a cash basis.
• It covers a period of the accounting year. All receipts whether related to the current year, previous year or future year are recorded on the receipt side. Similarly, all payments made during the year are shown on the credit side whether they relate to the current year, previous year or future year.
• Receipts and Payments A/c merely depict cash in hand and cash at the bank at the end. It does not represent excess income over expenditure and vice versa.

Q5. Show the treatment of the following items by a Not-for-Profit Organisation:

(i) Annual subscription
(ii) Specific donation
(iii) Sale of fixed assets
(iv) Sale of old periodicals
(v) Sale of sports materials
(vi) Life membership fee

Answer: i) Annual Subscription

1. Subscriptions that are obtained during an accounting year (it may be related to current, previous or upcoming year) are reflected on the debit side of R & P Account.
2. Subscriptions related to the present year whether yet to be received or already received reflects on the credit side of I & E account (Income and Expenditure)
3. Advance subscriptions received for the following year are reflected on Liabilities side of balance sheet.
4. Subscriptions which are due but yet to be received are shown on Assets part of Balance Sheet.
5. Subscriptions that are due but yet to receive are reflected on asset side of balance sheet.

ii) Specific donation

1. Specific donation amount is reflected on Debit side of R & P Accounts.
2. Specific donation amount is shown on Liabilities side of Balance Sheet. Because it is used for that specific purpose for which it is received.

iii) Sale of fixed assets

1. Amount received recorded on debit side of R & P Account.
2. Profit/Loss is credited/debited to I & E Account.
3. Book value of asset deducted from the respective asset on Asset side of Balance Sheet

iv) Sale of old periodicals

1. Amount received reflects on the debit side of R & P Account.
2. Sale of old periodical is counted as revenue receipts, hence reflects on credit side of I & E Account.

v) Sale of sport Materials

1. Amount received is debited to R & P Account
2. Sport material sale is revenue earned, hence reflects on credit side of I & E Account.

vi) Life Membership Fees

1. It is considered as a receipt for a NPO. Hence, debited to R & P Account
2. It is one-time fee and hence treated as Capital receipts, hence, added to Capital Fund on liabilities side of Balance Sheet

Q6. Show the treatment of items of Income and Expenditure Account when there is a specific fund for those items.

Answer: A NPO (Not-for-Profit organisation) has different sources of receipts in the form of subscriptions, donations, government grants etc. Of these some receipts are general while some are specific. Specific receipts are used only for the purpose for which it is received while general receipts can be used for any purpose. The specific receipts are not considered as revenue income for the Not-for-Profit organisation and therefore are reflected in I & E account.

In a way, specific receipts are considered as liabilities to the Not-for-Profit organisation as these amounts are received for specific purpose and cannot be used elsewhere. These are reflected in Liabilities side of Balance Sheet, until and unless it is completely used for the purpose it was received. If such amount is invested in the form of shares or debentures, then it is known as funds such as prize funds, match funds etc. The interest earned on such investment are not credited to I & E Account, instead it is credited to the respective fund account.

Similarly, any expense that is incurred for such funds gets debited from respective fund account. Such funds are shown in the liabilities side of Balance Sheet. If the expenses exceed the receipts of the fund, the difference gets reflected in I & E Account.

Explanation (a)

When receipts are more than expenses meant for specific purpose, that time the difference between receipts and expenses is shown on balance sheet in the liabilities side.

Balance Sheet

Specific Fund (i.e. Tournament, Match, Prize Fund, etc.)     Tournament Fund Investment

Explanation (b)

When expenses are more than receipts meant for specific purpose, that time the difference between expenses and receipts is shown in I & E account at the expenditure side.

Q7. What is Receipt and Payment Account? How is it different from Income and Expenditure Account?

Answer: Receipts and Payments Account is a summary of the Cash Book. All the cash receipts are recorded on the Receipts side (i.e. Debit side) and all the cash payments are recorded on the Payments side (i.e. Credit side) of Receipts and Payments Account. It is prepared on the basis of cash and bank transactions recorded in the Cash Book. It begins with the opening balance of cash and bank and ends with the closing balances of cash and bank (balancing figure) at the end of the accounting period. It records all cash and bank transactions both of capital and revenue nature. It not only records cash and bank transactions relating to the current accounting period, but also cash and bank receipts (or payments) received during the current accounting period that may be related to the previous or next accounting period.

Numerical Questions

Q1. From the following particulars taken from the Cash Book of a health club, prepare a Receipts and Payments Account.

(Ans: Cash at Bank (balancing figure) Rs. 91,000)

Answer:

Q2. The Receipt and Payment Account of Harimohan charitable institution is given:

Answer:

Q3. From the following particulars, prepare Income and Expenditure account:

Answer:

Q4. Following is the information given in respect of certain items of a Sports Club. Show these items in the Income and Expenditure Account and the Balance Sheet of the Club:

Answer:

5. How will you deal with the following items while preparing for the Bombay Women Cricket Club its income and expenditure account for the year ending 31.3.2017 and its Balance Sheet as on 31.3.2017?

	₹
(a)	Donation received during the year for the construction of a permanent Pavilion	12,25,000
	Expenditure incurred up to 31.3.2017 on its construction	10,80,000
	The total estimated expenditure on construction of Pavilion being	25,00,000
(b)	Tournament Fund:
	Balance as on 1.4.2016	10,700
	Subscriptions for tournament received during the year	65,800
	Expenditure incurred during the year on conducting tournaments	72,400
(c)	Life Membership fee received during the year	28,000

Give reasons for your answers

The solution for this question is as follows

(a)

Books of Bombay Women Cricket Club Balance Sheet  as on March 31, 2017
Liabilities	Amount ₹	Assets	Amount ₹
Donation for Pavilion	12,25,000		Construction of Pavilion in Progress	10,80,000
Less: Exp. on construction of Pavilion	(10,80,000)	1,45,000
Capital
Add: Pavilion Construction	10,80,000	10,80,000

Reason:

Donation for construction of Pavilion is a donation for specific purpose.

Expenses on construction on Pavilion is a capital expenditure.

(b)

Balance Sheet  as on March 31, 2017
Liabilities	Amount ₹	Assets	Amount ₹
Tournament Fund	10,700
Add: Subscription for Tournament	65,800
76,500
Less: Tournament Expenses	(72,400)	4,100

Reason

All funds received are treated as capital receipts and expenses related to any fund are deduced from the concerned funds.

(c)

Balance Sheet  as on March 31, 2017
Liabilities	Amount ₹	Assets	Amount ₹
Life Membership Fees	28,000

Reason

When there is no specific information on treatment of Life Membership fees, it is shown on liabilities side of Balance sheet as it is considered as capital receipt. On treated as revenue, it is shown in credit side of I & E Account.

Q6. From the following receipts and payments and information given below, Prepare Income and Expenditure Account and opening Balance Sheet of Adult Literacy Organisation as on December 31, 2017.

Receipt and Payment Account for the year ending  as on December 31, 2017
Receipts	Amount ₹	Payments	Amount ₹
Balance b/d			General Expenses	3,200
Cash in hand		4,000	News paper	1,850
Cash at Bank		15,550	Electricity	3,000
Subscriptions			Fixed deposit with bank (on 31.06.2017) @ 10% p.a.	18,000
2016	1,200
2017	26,500		Books	7,000
2018	500	28,200	Salary	3,600
Sale of old newspapers		1,250	Rent	6,500
Govt. grant		12,000	Postage charges	300
Sale of old furniture (book value ₹ 5, 000)		3,700	Furniture (purchased)	10,500
Interest received on FD		450	Balance c/d
			Cash in Hand	3,000
			Cash at Bank	8,200
		65,150		65,150

Information:

(i)    Subscription outstanding as on 31.12.2016 ₹ 2,000 and on December 31, 2017 ₹ 1,500.

(ii)   On December 31, 2017 Salary outstanding ₹ 600, and one month Rent paid in advance.

(iii)  On Jan. 01, 2016 organisation owned Furniture ₹ 12,000, Books ₹ 5,000.

The solution for this question is as follows:

Books of Adult Literacy Organisation Income and Expenditure Account  as on Dec. 31, 2017
Dr.	Cr.
Expenditure	Amount ₹	Income	Amount ₹
Loss on Sale of Old Furniture	1,300	Subscription	26,500
General Expenses	3,200	Add: Outstanding for 2017	1,500	28,000
Newspapers	1,850
Electricity		3,000	Sale of Old Newspapers	1,250
Salary	3,600		Government Grant	12,000
Add: Outstanding for 2017	600	4,200	Interest received on F.D.	450
			Add: Accrued Interest	450	900
Rent	6,500
Less: Prepaid for 2018 {6,500×(1/13)}	(500)	6,000
Postages Charges		300
Surplus (Excess of Income over Expenditure)	22,300
	42,150		42,150
Balance Sheet  as on Dec. 31, 2016
Liabilities	Amount ₹	Assets	Amount ₹
Capital Fund on Dec. 31, 2016 (Balancing Figure)	38,550	Subscription Outstanding	2,000
		Cash in Hand	4,000
		Cash at Bank	15,550
		Furniture	12,000
		Books	5,000
	38,550		38,550
Balance Sheet  as on Dec. 31, 2017
Liabilities	Amount  ₹	Assets	Amount  ₹
Capital	38,550		Prepaid Rent	500
Add: Surplus	22,300	60,850	Books	5,000
		Add: Purchases	7,000	12,000
Salary Outstanding	600
Subscription  Received in Advance for 2018	500	Furniture	12,000
		Add: Purchases	10,500
			22,500
		Less: Sale	(5,000)	17,500
		Fixed Deposit	18,000
		Add: Accrued Interest	450	18,450
		Cash in Hand		3,000
		Cash at Bank		8,200
		Subscription Outstanding for 2017	1,500
		Add: Outstanding for 2016	800	2,300
	61,950		61,950

Q7. The following is the account of cash transactions of the Nari Kalayan Samittee for the year ended December 31, 2017:

Receipts	Amount ₹	Payments	Amount ₹
Balance from last year	2,270	Rent	6,600
Subscriptions	32,500	Electric charges	3,200
Life membership fee	3,250	Lecturer’s fee	730
Donation	2,500	Office expenses	1,480
Profit from entertainment	7,250	Printing and Stationery	1,050
Sale of old Books (books value ₹ 1,000)	750	Legal fee	1,870
Interest	350	Books	6,500
		Furniture purchased	8,600
		Expenses on nukar drama	1,300
		Cash in hand	8,040
		Cash at bank	9,500
	48,870		48,870

You are required to prepare an Income and Expenditure Account after the following adjustments:

(a) Subscription still to be received are ₹ 750, but subscription include ₹ 500 for the year 2018.

(b)  In the beginning of the year the Sangh owned building ₹ 20,000 and furniture ₹ 3,000 and Books ₹ 2,000.

(c) Provide depreciation on furniture @ 5% (including purchase), books @ 10% and building @ 5%.

The solution for this question is as follows:

Books of  Nari Kalyan Samittee Income and Expenditure Account  as on Dec. 31, 2017
Dr.			Cr.
Expenditure	Amount ₹	Income	Amount ₹
Rent	6,600	Subscription	32,500
Electric Charges	3,200	Add: Outstanding for 2017	750
Lecturer’s fee	730	33,250
Office Expenses	1,480	Less: Advance for 2018	(500)	32,750
Printing and Stationery	1,050	Donation	2,500
Legal Fee	1,870	Profit from Entertainment	7,250
Depreciation on:		Interest	350
Books	750
Furniture	580
Building	1,000	2,330
Expenses on Nukar Drama	1,300
Loss on Sale of Books	250
Surplus	24,040
	42,850		42,850
Balance Sheet  as on Dec. 31, 2016
Liabilities	Amount ₹	Assets	Amount ₹
Capital Fund as Dec. 31, 2016	27,270	Building	20,000
(Balancing Figure)		Furniture	3,000
		Books	2,000
		Cash and Bank	2,270
	27,270		27,270

Balance Sheet  as on Dec. 31, 2017
Liabilities	Amount ₹	Assets	Amount ₹
Capital Fund	27,270		Building	20,000
Add: Life Membership Fees	3,250		Less: 5% Depreciation	(1,000)	19,000
Add: Surplus	24,040	54,560
		Furniture	3,000
Advance Subscription for 2018	500	Add: Purchases	8,600
			11,600
		Less: 5% Depreciation	580	11,020
		Books	2,000
		Add: Purchases	6,500
		8,500
		Less: Sales	1,000
				7,500
		Less: 5% Depreciation	750	6,750
		Cash in Hand		8,040
		Cash at Bank		9,500
		Subscription Outstanding		750
	55,060		55,060

Q8. Following is the Receipt and Payment Account of Indian Sports Club, prepared Income and Expenditure Account, Balance Sheet as on December 31, 2017:

Receipt and Payment Account  for the year ending December 31, 2017
Receipts	Amount ₹	Payments	Amount ₹
Balance b/d	7,890	Salary	11,000
Subscriptions	52,000	Electric charges	5,500
Life member ship fee	2,200	Billiard Table	17,500
Entrance fee	3,200	Office expenses	4,100
Tournament fund	26,000	Printing and Stationery	2,300
Locker Rent	1,250	Tournament expenses	18,500
Sale of old sports goods (Costing ₹ 2,200)	2,500	Repair of ground	2,000
Sale of Old Newspaper	750	Furniture purchased	7,700
Legacy	37,500	Sports equipment’s	12,000
		Cash in Hand	12,690
		Cash at Bank	10,000
		Fixed Deposit (on 1.10.17 for 10% p.a)	30,000
	1,33,290		1,33,290

Other Information:

Subscription outstanding was on December 31, 2016 ₹ 1,200 and ₹ 3,200 on December 31, 2017. Locker rent outstanding on December 31, 2017 ₹ 250. Salary outstanding on December 31, 2017 ₹ 1,000.

On January 1, 2017, club has Building ₹ 36,000, furniture ₹ 12,000, and Sports equipment’s ₹ 17,500. Depreciation charged on these items @ 10% (including Purchase).

 

The solution for this question is as follows:

Indian Sports Club Income and Expenditure Account  as on Dec. 31, 2017
Dr.			Cr.
Expenditure	Amount ₹	Income	Amount ₹
Salary	11,000		Subscriptions	52,000
Add: Outstanding for 2017	1,000	12,000	Add: Outstanding for 2017	3,200
Electric Charges	5,500		55,200
Office Expenses	4,100	Less: Outstanding for 2016	(1,200)	54,000
Printing and Stationery	2,300
Repair of Ground	2,000	Locker Rent	1,250
Depreciation on:		Add: Outstanding for 2017	250	1,500
Furniture	1,970
Building	3,600		Entrance Fees	3,200
Sports Equipments	2,730	8,300	Profit on Sale of Sports
Surplus	26,300	Equipments (₹ 2,500 – ₹ 2,200)	300
		Sale of Old Newspapers	750
		Accrued Interest	750
	60,500		60,500
Balance Sheet  as on January 01, 2016
Liabilities	Amount ₹	Assets	Amount ₹
Capital Fund (Balancing Figure)	74,590	Subscription Outstanding	1,200
			Building	36,000
		Furniture	12,000
		Sports Equipments	17,500
		Cash and Bank	7,890
	74,590		74,590
Balance Sheet  as on Dec. 31, 2017
Liabilities	Amount ₹	Assets	Amount ₹
Salary Outstanding	1,000	Subscripting Outstanding	3,200
Tournament Fund	26,000		Locker Rent Outstanding	250
Less: Tournament Expenses	18,500	7,500	Building	36,000
		Less: 10% Depreciation	(3,600)	32,400
Capital fund	74,590
Add: Life Membership Fee	2,200		Furniture	12,000
Add: Legacy	37,500		Add: Purchases	7,700
Add: Surplus	26,300	1,40,590		19,700
		Less: 10% Depreciation	(1,970)	17,730
		Sports Equipments	17,500
		Add: Purchases	12,000
			29,500
		Less: Sales	(2,200)
			27,300
		Less: 10% Depreciation	(2,730)	24,570
		Billiard Table	17,500
		Cash in hand	12,690
		Cash at Bank	10,000
		Fixed Deposit	30,000
		Add: Accrued Interest	750	30,750
	1,49,090		1,49,090

Q9. From the following Receipt and Payment Account of Jan Kalyan Club, prepare Income and Expenditure Account and Balance Sheet for the year ending March 31, 2017.      

Receipt and Payment Account  for the year ending March 31, 2017
Receipts	Amount ₹	Payments	Amount ₹
Cash in hand as on 1.4.16	6,800	Salaries	24,000
Subscription	60,200	Traveling Expenses	6,000
Donation	3,000	Stationery	2,300
Sale of furniture (Book value ₹ 6000)	4,000	Rent	16,000
Entrance fee	800	Repair	700
Life membership fee	7,000	Books purchased	6,000
Interest on investment (@ 5% for full year)	5,000	Building purchased	30,000
		Cash in hand as 31.3.2017	1,800
	86,800		86,800

Additional Information:

	As on 1.04.2016	As on 31.03.2017
(i)	Subscription received in advance	1,000	3,200
(ii)	Outstanding subscription	2,000	3,700
(iii)	Stock of stationery	1,200	800
(iv)	Books	13,500	16,500
(v)	Furniture	16,000	8,000
(vi)	Outstanding rent	1,000	2,000

 The solution for this question is as follows:

Books of Jan Kalyan Club Income and Expenditure Account  as on 31 March 2017
Dr.			Cr.
Expenditure	Amount ₹	Income	Amount ₹
Loss on Sale of Furniture (₹ 6,000 – ₹ 4,000)	2,000	Subscription	60,200
Salaries		24,000	Less: Outstanding for 2016	(2,000)
Traveling Expenses	6,000		58,200
Stationery	2,300		Add: Outstanding for 2017	3,700
Add: Opening Stock	1,200			61,900
	3,500		Add: Advance in 2016	1,000
Less: Closing Stock	(800)	2,700		62,900
		Less: Advance in 2017	(3,200)	59,700
Repairs	700
Rent	16,000		Donation	3,000
Less: Outstanding for 2016	(1,000)		Entrance Fees	800
	15,000		Interest on Investments	5,000
Add: Outstanding for 2017	2,000	17,000
Depreciation on Books	3,000
Depreciation on Furniture	2,000
Surplus	11,100
	68,500		68,500
Balance Sheet  as on April 01, 2016
Liabilities	Amount ₹	Assets	Amount ₹
Advance Subscription	1,000	Cash in Hand	6,800
Outstanding Rent	1,000	Investment {5,000 × (100/5)}	1,00,000
Capital Fund (Balancing figure)	1,37,500	Subscription Outstanding	2,000
		Stock of Stationery	1,200
		Books	13,500
		Furniture	16,000
	1,39,500		1,39,500
Balance Sheet  as on March 31, 2017
Liabilities	Amount ₹	Assets	Amount ₹
Advance Subscription	3,200	Subscription Outstanding	3,700
Outstanding Rent	2,000	Stock of Stationery	800
Capital Fund	1,37,500		Investments	1,00,000
Add: Life Membership Fees	7,000
Add: Surplus	11,100	1,55,600	Books	13,500
			Add: Purchases	6,000
			19,500
		Less: Depreciation	(3,000)	16,500
		Building	30,000
		Cash in Hand	1,800
		Furniture	16,000
		Less: Sales	6,000
			10,000
		Less: Depreciation	(2,000)	8,000
	1,60,800		1,60,800

Q10. Receipt and Payment Account of Shankar Sports club is given below, for the year ended March 31, 2017

Receipt and Payment Account  for the year ending March 31, 2017
Receipts	Amount ₹	Payments	Amount ₹
Opening Cash in hand	2,600	Rent	18,000
Entrance fees	3,200	Wages	7,000
Donation for building	23,000	Billiard table	14,000
Locker rent	1,200	Furniture	10,000
Life membership fee	7,000	Interest	2,000
Profit from entertainment	3,000	Postage	1,000
Subscription	40,000	Salary	24,000
		Cash in hand	4,000
	80,000		80,000

Prepare Income and Expenditure Account and Balance Sheet with help of following Information:

Subscription outstanding on March 31, 2016 is ₹ 1, 200 and ₹ 2,300 on March 31, 2017, opening stock of postage stamps is ₹ 300 and closing stock is ₹ 200, Rent ₹ 1,500 related to 2015 and ₹ 1,500 is still unpaid.

On April 01, 2016 the club owned furniture ₹ 15,000, Furniture valued at ₹ 22,500

On March 31, 2017. The club took a loan of ₹ 20,000 (@ 10% p.a.) in 2017.

The solution for this question is as follows:

Books of Shankar Sports Club Income and Expenditure Account  as on 31 Dec. 2017
Dr.			Cr.
Expenditure	Amount ₹	Income	Amount ₹
Rent	18,000		Entrance Fees	3,200
Add: Outstanding for 2017	1,500		Locker Rent	1,200
	19,500		Profit from Entertainment	3,000
Less: Outstanding for 2016	(1,500)	18,000
		Subscription	40,000
Wages	7,000	Less: Outstanding for 2016	(1,200)
Depreciation on Furniture	2,500		38,800
Interest	2,000	Add: Outstanding for 2017	2,300	41,100
Postage	1,000		Deficit (Balancing Figure)	6,100
Add: Opening Stock	300
	1,300
Less: Closing Stock	(200)	1,100
Salaries	24,000
	54,600		54,600
Balance Sheet  as on  December 31, 2016
Liabilities	Amount ₹	Assets	Amount ₹
Rent Outstanding	1,500	Cash in Hand	2,600
10%  Loan	20,000	Subscription Outstanding	1,200
		Furniture	15,000
		Stock of Postage Stamps	300
		Capital fund Deficit (Balancing figure)	2,400
	21,500		21,500

Balance Sheet  as on December 31, 2017
Expenditure	Amount ₹	Income	Amount ₹
Rent Outstanding	1,500	Subscription Outstanding	2,300
10%  Loan	20,000	Stock of Postage Stamps	200
Donation for Building	23,000	Billiard Table	14,000
Capital Fund	(2,400)		Furniture	15,000
Add: Life Membership Fee	7,000		Add: Purchases	10,000
Less: Deficit	(6,100)				25,000
		Less: Depreciation	(2,500)	22,500
		Cash in Hand	4,000
		* Capital Fund (Deficit)	1500
	44,500		44,500

* NOTE 1:

Capital Fund	(2,400)
Add:	Life Membership Fees	7,000
Less:	Deficit	(6,100)
	Net Deficit	(1,500)

Q11. Prepare Income and Expenditure Account and Balance Sheet for the year ended March 31, 2016 from the following Receipt and Payment Account and Balance Sheet of culture club:
 

Receipt and Payment Account  for the year ending March 31, 2016
Receipts	Amount (₹)	Payments	Amount (₹)
Opening cash balance		12,000	Furniture	4,000
Subscription			Telephone expenses	800
2014-15	2,000		Salary
2015-16	22,000	24,000	2014-15	1,000
Entrance fees	2,800	2015-16	4,000
Locker rent	1,000	Newspapers	700
Life membership fee	1,200	Sundry expenses	1,000
Government grant	11,000	Defence bonds	18,000
		Land	20,000
		Closing cash balance	2,500
	52,000		52,000
Balance Sheet  for the year ending March 31, 2016
Liabilities	Amount (₹)	Assets	Amount (₹)
Advance locker rent	200	Cash in hand	12,000
Subscription received in Advance	1,000	Outstanding subscription	3,000
Outstanding salary	2,000	Building	35,000
Loan	10,000
Capital fund	36,800
	50,000		50,000

The solution for this question is as follows:

Books of Culture Club Income and Expenditure Account  as on March 31, 2016
Dr.		Cr.
Expenditure	Amount ₹	Income	Amount ₹
Telephone Expenses	800	Subscription	22,000
Salary	4,000	Add: Advance Received in 2015	1,000	23,000
Newspapers	700
Sundry Expenses	1,000	Entrance Fees	2,800
		Locker Rent	1,000
Surplus (Balancing figure)	31,500	Add: Advance Received in 2015	200	1,200
		Government Grants	11,000
	38,000		38,000
Balance Sheet  as on March 31, 2016
Liabilities	Amount ₹	Assets	Amount ₹
Capital Fund	36,800		Subscription Still Outstanding for 2015	1,000
Add: Life Membership Fees	1,200		(₹ 3,000 – ₹ 2,000)
Add: Surplus	31,500	69,500	Furniture	4,000
		Defence Bonds	18,000
Salary Still Outstanding for 2015	1,000	Land	20,000
Loan	10,000	Building	35,000
		Cash in Hand	2,500
	80,500		80,500

Q12. From the following Receipt and Payment Account prepare final accounts of a Unity Club for the year ended March 31, 2017.

Receipt and Payment Accounts  for the year ending March 31, 2017
Receipts	Amount ₹	Payments	Amount ₹
Balance b/d		15,000	Furniture	18,000
Sale of Old furniture (costing ₹ 6,000)	4,000	Library books	10,000
Subscriptions:			Salaries	72,000
2015–16	18,000		General expenses	18,000
2016–17	60,000		Electric charges	12,000
2017–18	12,000	90,000	Newspapers	33,800
Sale of old newspapers		10,800	Postage	3,000
Profit from entertainment		44,000	Stationery	40,000
Rent		84,000	Audit fee	8,000
			Balance c/d	33,000
		2,47,800		2,47,800
Balance Sheet  as on March 31, 2016
Liabilities	Amount ₹	Assets	Amount ₹
Outstanding Salary	6,000	Cash	15,000
Capital Fund	6,94,000	Outstanding subscription	18,000
		Library Books	30,000
		Furniture	37,000
		Land and Building	6,00,000
	7,00,000		7,00,000

Additional Information:

1.	The Club had 500 members each paying an annual subscription of ₹ 150.
2.	On 31.3.2016 salaries outstanding amounted to ₹ 1,200 and salaries paid included ₹ 6,000 for the year 2015–16.
3.	Provide 5% depreciation on Land and Building. The solution for this question is as follows:
Books of Unity Club Income and Expenditure Account  as on March 31, 2017
Dr.		Cr.
Expenditure	Amount  ₹	Income	Amount ₹
Loss on Sale of Old Furniture (4,000 – 6,000)	2,000	Subscription
		500 members at ₹ 150 each	75,000
Salaries	72,000		Sale of Old Newspapers	10,800
Add: Outstanding for 2015–16	1,200		Profit from Entertainment	44,000
	73,200		Rent	84,000
Less: Outstanding for 2016–17	(6,000)	67,200
General Expenses	18,000	Deficit (Balancing figure)	200
Electric Charges	12,000
Newspapers	33,800
Postage	3,000
Stationery	40,000
Audit Fees	8,000
Depreciation on Land and Building	30,000
	2,14,000		2,14,000
Balance Sheet  as on 31 March 2017
Liabilities	Amount  ₹	Assets	Amount  ₹
Advance Subscription (for 2017–18)	12,000	Subscription Outstanding	15,000
Salaries Outstanding	1,200	Furniture	37,000
Capital Fund	6,94,000		Add: Purchases	18,000
Less: Deficit	(200)	6,93,800		55,000
			Less: Sales	(6,000)	49,000
		Library Books	30,000
		Add: Purchases	10,000	40,000
		Land and Building	6,00,000
		Less: 5% Depreciation	(30,000)	5,70,000
		Cash and Bank	33,000
	7,07,000		7,07,000

Q13. Following is the information in respect of certain items of a Sports Club. You are required to show them in the Income and Expenditure Account and the Balance Sheet.

Details	Amount ₹
Sports Fund as on April 1, 2016	80,000
Sports Fund Investments	80,000
Interest on Sports Fund Investments	8,000
Donations for Sports Fund	30,000
Sports Prizes awarded	16,000
Expenses on Sports Events	7,000
General Fund	2,00,000
General Fund Investments	2,00,000
Interest on General Fund Investments	20,000

 The solution for this question is as follows:

Income and Expenditure Account  as on March 31, 2016
Dr.		Cr.
Expenditure	Amount ₹	Income	Amount ₹
		Interest on General Fund Investments	20,000
Balance Sheet  as on March 31, 2016
Liabilities	Amount ₹	Assets	Amount ₹
Sports Fund	80,000		Sports Fund Investments	80,000
Add: Interest on Sports Fund			General Fund Investments	2,00,000
Investments	8,000
Add: Donation for Sports Fund	30,000
	1,18,000
Less: Sports Prizes Awarded	(16,000)
Less: Expenses on Sports Events	(7,000)	95,000
General Fund	2,00,000

Q14. Receipt and Payment Account of Maitrey Sports Club showed that ₹ 68,500 were received by way of subscriptions for the year ended on March 31, 2017.

The additional information was as under:

1. Subscription Outstanding as on March 31, 2016 were ₹ 6,500,

2. Subscription received in advance as on March 31, 2016 were ₹ 4,100,

3. Subscription Outstanding as on March 31, 2017 were ₹ 5,400,

4. Subscription received in advance as on March 31, 2017 were ₹ 2,500.

Show how that above information would appear in the final accounts for the year ended on March 31, 2017 of Maitrey Sports Club.

The solution for this question is as follows:

Books of Maitrey Sports Club Income and Expenditure Account  as on March 31, 2017
Dr.		Cr.
Expenditure	Amount  ₹	Income	Amount ₹
		Subscription	68,500
		Less: O/s on Mar. 31, 2016	(6,500)
		62,000
		Add: Advance on Mar. 31, 2016	4,100
		Add: O/s on Mar. 31, 2017	5,400
		71,500
		Less: Advance on Mar. 31, 2017	(2,500)	69,000
Balance Sheet  as on  March 31, 2016
Liabilities	Amount ₹	Assets	Amount ₹
Subscription in Advance	4,100	Subscription Outstanding	6,500
Balance Sheet  as on March 31, 2017
Liabilities	Amount ₹	Assets	Amount ₹
Subscription in Advance	2,500	Subscription Outstanding	5,400

Q15. Following is the Receipt and Payment account of Rohatgi Trust:

Receipt and Payment Account  for the year ending December 31, 2017
Receipts	Amount ₹	Payments	Amount ₹
Cash in hand		14,000	Rent	6,000
Cash at Bank		60,000	Salary	12,000
Subscriptions: 2016 2017 2018	5,000 83,000 3,000	91,000	Postage Electricity charges Purchase of furniture Books	300 6,000 20,000 3,000
Sale of Investment		90,000	Defence Bonds	1,50,000
Interest on investment		2,000	Help to needy students	22,000
Sale of furniture (book value ₹ 3,000)	3,200	Cash in hand Cash at bank	10,900 30,000
		2,60,200		2,60,200

Prepare Income and expenditure account for the year ended December 31, 2017, and a balance sheet as on that date after the following adjustments: Subscription for 2017, still owing were ₹ 7,000. Interest due on defence bonds was ₹7,000, Rent still owing was ₹ 1,000. The Book value of investment sold was ₹ 80,000, ₹ 30,000 of the investment were still in hand. Subscription received in 2017 included ₹ 400 from a life member. The total furniture on January 1, 2017 was worth ₹ 12,000. Salary paid for the year 2018 is ₹ 2,000.

The solution for this question is as follows:

Books of Rohatgi Trust Income and Expenditure Account  as on December 31, 2017
Dr.		Cr.
Expenditure	Amount  ₹	Income	Amount  ₹
Rent	6,000		Subscription	83,000
Add: Outstanding	1,000	7,000	Add: Outstanding for 2017	7,000
		90,000
Salary	12,000		Less: Life Membership Fees	(400)	89,600
Less: Advance for 2018	(2,000)	10,000
		Interest Accrued on Defence Bonds	7,000
Postage	300	Profit on Sale of Investment (₹ 90,000 – ₹ 80,000)	10,000
Electricity Charges	6,000	Profit on Sale of Furniture (₹ 3,200 – ₹ 3,000)	200
Help to Needy Students	22,000	Interest on Investments	2,000
Surplus (Balancing Figure)	63,500
	1,08,800		1,08,800
Balance Sheet  as on December 31, 2016
Liabilities	Amount ₹	Assets	Amount ₹
Capital fund (Balancing Figure)	2,01,000	Subscription Outstanding	5,000
		Investment (₹ 80,000 + ₹ 30,000)	1,10,000
		Furniture	12,000
		Cash in hand	14,000
		Cash at bank	60,000
	2,01,000		2,01,000
Balance Sheet  as on December 31, 2017
Expenditure	Amount  ₹	Income	Amount  ₹
Advance Subscription	3,000	Subscription Outstanding		7,000
Rent Outstanding	1,000	Defence Bonds	1,50,000
Capital Fund	2,01,000		Add: Accrued Interest on Defence Bonds	7,000	1,57,000
Add: Surplus		63,500
Add: Life Membership Fees	400	2,64,900	Investment	30,000
		Advance Salaries	2,000
		Furniture	12,000
		Add: Purchases	20,000
		32,000
		Less: Sales	(3,000)	29,000
		Books	3,000
		Cash in Hand	10,900
		Cash at Bank	30,000
	2,68,900		2,68,900

Q16. Following Receipt and Payment Account was prepared from the cash book of Delhi Charitable Trust for the year ending December 31, 2017

Receipt and Payment Account  for the year ending December 31, 2017
Receipts	Amount ₹	Payments	Amount ₹
Balance b/d		Charity	11,500
Cash in hand	11,500	Rent and taxes	3,200
Cash at bank	12,600	Salary	6,000
Donation	9,000	Printing	600
Subscription	42,800	Postage	300
Legacies	18,000	Advertisements	4,500
Interest on investment	4,500	Insurances	2,000
Sale of old newspapers	200	Furniture	21,600
		Investment	23,000
		Balance c/d:
		Cash in hand	9,900
		Cash at bank	16,000
	98,600		98,600

Prepare Income and expenditure account for the year ended December 31, 2017, and a balance sheet as on that date after the following adjustments:

(a)	It was decided to treat one-third of the amount received on account of donation as income.
(b)	Insurance premium was paid in advance for three months.
(c)	Interest on investment ₹1,100 accrued was not received.
(d)	Rent ₹600: salary ₹900 and advertisement expenses ₹1,000 outstanding as on December 31, 2017.

The solution for this question is as follows:

Books of Delhi Charitable Trust Income and Expenditure Account  as on December 31, 2017
Dr.	Cr.
Expenditure	Amount  ₹	Income	Amount  ₹
Insurance	2,000		Donation {9,000 × (1/3)}	3,000
Less: Prepaid {2,000 × (3/15)}	(400)	1,600	Interest on Investments	4,500
		Add: Accrued Interest	1,100	5,600
Charity	11,500
Rent and Taxes	3,200		Subscription	42,800
Add: Outstanding	600	3,800	Sale of Old Newspapers	200
Salary	6,000
Add: Outstanding	900	6,900
Printing	600
Postage	300
Advertisements	4,500
Add: Outstanding	1,000	5,500
Surplus (Balancing figure)	21,400
	51,600		51,600
Balance Sheet  as on December 31, 2016
Liabilities	Amount ₹	Assets	Amount ₹
Capital Fund (Balancing figure)	24,100	Cash in Hand	11,500
		Cash at Bank	12,600
	24,100		24,100
Balance Sheet  as on December 31, 2017
Liabilities	Amount ₹	Assets	Amount ₹
Capital Fund	24,100		Prepaid Insurance {2,000 × (3/15)}	400
Add: Donation {9,000 × (2/3)	6,000		Investment	23,000
Add: Legacies	18,000		Add: Accrued Interest	1,100	24,100
Add: Surplus	21,400	69,500	Furniture	21,600
Rent Outstanding	600	Cash in Hand	9,900
Salary Outstanding	900	Cash at Bank	16,000
Advertisement Expenses Outstanding	1,000
	72,000		72,000

 17. From the following Receipt and Payment Account of a club, prepare Income and Expenditure Account for the year ended March 31, 2017 and the Balance Sheet as on that date.

Receipt and Payment Account  for the year ending March 31, 2017
Receipts	Amount ₹	Payments	Amount ₹
Balance b/d		3,500	General expenses	900
Subscription: 2015-16 2016-17 2017-18	2,000 70,000 3,000	75,000	Salary Postage Electricity charges Furniture	16,000 1,300 7,800 26,500
Sale of old Books		2,000	Books	13,000
(Costing ₹ 3,200)			Newspapers	600
Rent from use of hall		17,000	Meeting expenses	7,200
Sale of newspapers		400	T.V. set	16,000
Profit from entertainment		7,300	Balance c/d	15,900
		1,05,200		1,05,200

Additional Information:

(a)	The club has 100 members each paying an annual subscription of ₹ 900. Subscriptions outstanding on March 31, 2016 were ₹ 3,600.
(b)	On March 31, 2017, salary outstanding amounted to ₹ 1,000, Salary paid included ₹ 1,000 for the year 2012.
(c)	On April 1, 2017 the club owned land and building ₹ 25,000, furniture ₹ 2,600 and books ₹ 6,200.

The solution for this question is as follows:

Income and Expenditure Account  as on December 31, 2017
Dr.			Cr.
Expenditure	Amount  ₹	Income	Amount  ₹
General Expenses	900	Subscription	70,000
Salary	16,000		Add: Outstanding for 2017	20,000	90,000
Add: Outstanding for 2017	1,000		(100 members at ₹ 900 each)
17,000		Rent from use of hall	17,000
Less: Outstanding for 2016	(1,000)	16,000	Sale of Old News Papers	400
		Profit from Entertainment	7,300
Loss on Sale of Old Books	1,200
Electricity Charges	7,800
Newspapers	600
Meeting Expenses	7,200
Postage	1,300
Surplus (Balancing figure)	79,700
	1,14,700		1,14,700
Balance Sheet as on March 31, 2016
Liabilities	Amount ₹	Assets	Amount ₹
Salary Outstanding	1,000	Subscription Outstanding	3,600
Capital Fund (Balancing figure)	39,900	Furniture	2,600
		Books	6,200
		Cash and Bank	3,500
		Building	25,000
	40,900		40,900

Balance Sheet  as on March 31, 2017
Liabilities	Amount  ₹	Assets	Amount  ₹
Advance Subscription	3,000	Subscription Outstanding
Salary Outstanding	1,000	2017	20,000
		Add: 2016 (Still Outstanding)	1,600	21,600
Capital Fund	39,900		Building	25,000
Add: Surplus	79,700	1,19,600	Furniture	2,600
		Add: Purchases	26,500	29,100
		Books	6,200
		Add: Purchases	13,000
		19,200
		Less: Sales	3,200	16,000
		T.V. Set	16,000
		Cash and Bank	15,900
	1,23,600		1,23,600

18. Following is the Receipt and Payment Account of Women’s Welfare Club for the year ended December 31, 2017:

The solution for this question is as follows:

Receipt and Payment Account  for the year ending December 31, 2017
Receipts	Amount ₹	Payments	Amount ₹
Balance b/d	7,250	Salary	12,500
Subscriptions	81,750	Stationery	1,700
Donations	3,000	Electricity charges	9,550
Grant from Government	15,000	Insurance	7,500
Sale of newspapers	300	Equipments	30,000
Proceeds of charity show	16,500	Petty expenses	500
Interest on investments @ 10% for full year	7,000	Expenses on charity show	12,900
Sundries income	400	Newspapers	1,000
		Lectures fee	16,500
		Honorarium to Secretary	12,000
		Balance c/d	27,050
	1,31,200		1,31,200

Additional Information:

	01.01.2017 ₹	31.12.2017 ₹
Outstanding salaries	1,200	1,800
Insurance prepaid	700	300
Subscription outstanding	3,750	2,500
Subscription received in advanced	1,750	1,000
Electricity charges outstanding	—	1,250
Stock of stationery	2,250	700
Equipments	25,600	50,200
Building	1,20,000	1,14,000

Prepare Income and Expenditure Account for the year ended December 31, 2017 and Balance Sheet as on that date.

The solution for this question is as follows:

Books of Women Welfare Club  Income and Expenditure Account  as on December 31, 2017
Dr.			Cr.
Expenditure	Amount ₹	Income	Amount  ₹
Salary	12,500		Subscriptions	81,750
Add: O/s on Dec. 31, 2017	1,800		Add: O/s on Dec. 31, 2017	2,500
14,300		84,250
Less: O/s on Dec. 31, 2016	(1,200)	13,100	Less: O/s on Dec. 31, 2016	(3,750)
		80,500
Stationery	1,700		Add: Advance on Dec. 31, 2016	1,750
Add: Opening Stock	2,250		82,250
3,950		Less: Advance on Dec.31, 2017	(1,000)	81,250
Less: Closing Stock	(700)	3,250
		Donations	3,000
Electric Charges	9,550		Grant from Government	15,000
Add: O/s on Dec. 31, 2017	1,250	10,800	Sale of Newspapers	300
		Profit from Charity show (16,500–12,900)	3,600
Insurance	7,500		Interest on Investments	7,000
Add: Prepaid in 2016	700		Sundries Income	400
8,200
Less: Prepaid in 2017	(300)	7,900
Depreciation on Equipments	5,400
Petty Expenses	500
Newspapers	1,000
Lectures Fee	16,500
Honorarium to Secretary	12,000
Depreciation on Building	6,000
Surplus (Balancing Figure)	34,100
	1,10,550		1,10,550
Balance Sheet  as on December 31, 2016
Liabilities	Amount ₹	Assets	Amount ₹
Outstanding Salaries	1,200	Insurance Prepaid	700
Subscription in Advance	1,750	Subscription Outstanding	3,750
		Stock of Stationery	2,250
Capital Fund (Balancing Figure)	2,26,600	Equipments	25,600
		Building	1,20,000
		Cash and Bank	7,250
		Investments {7,000 × (100/10)}	70,000
	2,29,550		2,29,550

Balance Sheet  as on December 31, 201
Liabilities	Amount ₹	Assets	Amount ₹
Outstanding Salaries	1,800	Equipments	25,600
Subscription in Advance	1,000	Add: Purchases	30,000
Electricity Charges Outstanding	1,250	55,600
Capital Fund	2,26,600		Less: Depreciation	(5,400)	50,200
Add: Surplus	34,100	2,60,700
		Insurance Prepaid	300
		Subscription Outstanding	2,500
		Stock of Stationery		700
		Building	1,20,000
		Less: Depreciation	(6,000)	1,14,000
		Cash and Bank	27,050
		Investments	70,000
	2,64,750		2,64,750

Q19. As at March 31, 2017 the following balances have been extracted from the books of the Indian Chartered Accountants Recreation Club and you are asked to prepare (1) Trading Account for ascertaining gross profit derived from running restaurant and dining room and (2) Income and Expenditure Account for the year ended March 31, 2017 (3) and a Balance Sheet as at that date.

Debit Balances	₹	Credit Balances	₹
Stock-in-hand	1170	Receipts Dining Room	87,660
Purchases	24,660	Subscriptions	9,450
Dining Room	32,370	Billiard’s Receipts	7,300
Rent	10,470	Sunday Receipts	410
Wages	18,690	Interest on Fixed Deposit	270
Repairs and Renewals	5,400	Sundry Creditors	5310
Fuel and Light	5,280	Grant from Institute (permanent)	42,000
Misc. Expenses	4,050	Income and Exp. A/c (1.4.16)	1,380
Cash in hand	560	Suspense A/c (See note)	60
Cash at bank	2,760
Fixed Deposit	8,500
Sundry Debtors	2,250
China glass, cutlery and linen	600
Billiard Table	2,070
Fixtures and Fittings	870
Furniture	4,140
Club Premises	30,000
	1,53,840		1,53,840

On March 31, 2016 stock of restaurant consisted of ₹ 900 and ₹ 60 respectively. Provide depreciations ₹ 60 on fixtures and fittings, ₹ 390 on billiard table and ₹ 560 on furniture.

The solution for this question is as follows:

Books of Indian Chartered Accountants Recreation Club Restaurant Trading Account
Dr.		Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Opening Stock	1,170	Receipts from Dining Room	87,660
Purchases	24,660	Closing Stock	960
Dining Room Exp.	32,370
Profit from Restaurant	30,420
	88,620		88,620
Income and Expenditure Account  as on March 31, 2017
Dr.			Cr.
Expenditure	Amount  ₹	Income	Amount ₹
Rent	10,470	Subscriptions	9,450
Wages	18,690	Sundry Receipts	410
Repairs an Renewals	5,400	Interest on Fixed Deposits	270
Fuel and Light	5,280	Profit from Restaurant	30,420
Misc. Expenses	4,050	Billiards Receipts	7,300
Depreciation on
Fixtures and Fittings	60
Billiards Table	390
Furniture	560	1,010
Surplus (Excess of Income over Expenditure)	2,950
	47,850		47,850
Balance Sheet  as on March 31, 2017
Liabilities	Amount ₹	Assets	Amount ₹
Sundry Creditors	5,310	Cash in Hand	560
Grant from Institute	42,000	Cash at Bank	2,760
Suspense	60	Fixed Deposit	8,500
Capital Fund (Income and Exp. A/c as on Apr.01, 2016)	1,380		Sundry Debtors	2,250
Add: Surplus	2,950	4,330	China Glass, Cutlery and Linen	600
		Billiards Table	2,070
		Less: Depreciation	(390)	1,680
		Fixture and Fittings	870
		Less: Depreciation	(60)	810
		Furniture	4,140
		Less: Depreciation	(560)	3,580
		Club Premises	30,000
		Stock of Restaurant	960
	51,700		51,700

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Concepts covered in this chapter –

• Meaning and characteristics of Non profit organisation
• Accounting records of NPO
• Balance sheet
• Incidental trading activity
• Income and expenditure account based on the trial balance
• Income and Expenditure account

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