question_answer
The following is the receipts and payments account of Queen's Club for the year ended 31st March, 2018: Receipts and Payments Account Dr for the year ending 31st March,2018 Cr Receipts | Amt (Rs.) | Payment | Amt (Rs.) |
To Balance b/d | 1,82,000 | By Salaries | 1,66,000 |
To Subscriptions | 1,80,000 | By Stationery | 32,000 |
To Tournament Fund | 1,64,000 | By Rent | 48,000 |
To Interest (Investment) | 65,000 | By Telephone Expenses | 8,000 |
To Donations | 1,12,000 | By Sports Material | 78,000 |
To Sale of Concert Tickets | 2,47,000 | By 6% Investments | 5,00,000 |
| | By Miscellaneous Expenses | 24,000 |
| | By Concert Expenses | 58,000 |
| | By Balance c/d | 36,000 |
| 9,50,000 | | 9,50,000 |
The following additional information is provided; (i) Subscription include Rs. 22,000 for 2016 - 17 and Rs. 8,000 for 2018 - 19. |
(ii) Stock of stationery on 31st March, 2017 and 2018 was Rs. 4,200 and Rs. 6,400 respectively. |
(iii) Stock of sports material at the beginning and end of the year were Rs. 18,000 and Rs. 31,000 respectively. |
(iv) Rent includes Rs. 4,000 paid for March, 2017, Rent for March, 2018 is outstanding. |
(v) Telephone expenses include Rs. 3,000 as quarterly rent upto 31st May, 2018. |
(vi) The value of building as on 31st March, 2017 was Rs. 8,00,000 and you are required to write-off depreciation @ 5%. |
(vii) The value of investments on 31st March, 2017 was Rs. 10,00,000 and the club made similar additional investment during the year on 1st October, 2017. |
You are required to prepare income and expenditure Account of the club for the year ended 31st March, 2018.
Answer:
Income and Expenditure Account Dr for the year ending 31st March, 2018 Cr Expenditure | | Amt (Rs.) | Income | | Amt (Rs.) |
To Salaries | | 1,66,000 | By Subscription | 1,80,000 | |
To Stationery | 32,000 | | (-) Subscription Received for | | |
(+) Stock on 31st March, 2017 | 4,200 | | 2016-17 | (22,000) | |
| 36,200 | | | 1,58,000 | |
(-) Stock on 31st March, 2018 | (6,400) | 29,800 | (-) Subscription Received for | | |
To Rent | (48,000) | | 2018-19 | (8,000) | 1,50,000 |
(-) Rent Paid for March, 2017 | (4,000) | | By Interest on Investment | 65,000 | |
| 44,000 | | (+) Accrued Interest (W.N.1) | 10,000 | 75,000 |
(+) Outstanding Rent for March, | | | By Donations | | 1,12,000 |
2018 | (4,000) | 48,000 | By Sale of Concert Tickets | | 2,47,000 |
To Telephone Expenses | 8,000 | | | | |
(-) Prepaid\[\left( 3,000\times \frac{2}{3} \right)\] | (2,000) | 6,000 | | | |
To Sports Material | 78,000 | | | | |
(+) Stock at the beginning | 18,000 | | | | |
| 96,000 | | | | |
(-) Stock at the End | (31,000) | 65,000 | | | |
To Miscellaneous Expenses | | 24,000 | | | |
To Concert Expenses | | 58,000 | | | |
To Depreciation on Building | | 40,000 | | | |
\[(8,00,000\times 5%)\] | | | | | |
To Excess of income over | | | | | |
Expenditure | 1,47,200 | | | | |
| 5,84,000 | | | | 5,84,000 |
Working Note | Amt (Rs.) |
Calculation of interest on investment | |
Interest on Investment \[\left( 10,00,000\times \frac{6}{100} \right)\] | 60,000 |
(+) Interest on Additional Investment \[\left( 5,00,000\times \frac{6}{100}\times \frac{6}{12} \right)\] | 15,000 |
| 75,000 |
(-) Interest Received during the Year | (65,000) |
Amount of Accrued Interest | 10,000 |