NCERT Solutions for Class 12 Accountancy Chapter 1 - Accounting for Not for Profit Organisation

Class 12 Accountancy NCERT Solutions Chapter 1 - Accounting for Not for Profit Organisation

Accountancy is a difficult subject. This is why if a student wants to score well in this subject, he or she needs to buckle down and study every single day. Ideally, students should spend time reading and go through the course material.


Once the student has a handle on the concepts of the chapter, then the next step for him or her is to spend time in solving questions. While doing that, students should also download Accounting for Not-for-profit Organisations Class 12 Solutions.


Downloading CBSE Class 12 Accountancy Part 1 Chapter 1 Solutions is very beneficial. Students can learn to write proper answers during the exam with the help of this material. Students can also memorize answers to questions that they find difficult. Class 12th Accountancy Partnership Accounts Chapter 1 Solutions can be downloaded from Vedantu. We also provide live classes and query resolution services to all students.

Do you need help with your Homework? Are you preparing for Exams?
Study without Internet (Offline)
NCERT Solutions for Class 12 Accountancy Chapter 1 part-1

Access NCERT Solutions for Class 12 Accountancy Chapter- 1 Accounting For Not for Profit Organisation

1. State the meaning of ‘Not-for-Profit’ organizations?

Ans: Not-for-profit organisations are those organisations that are established for a charitable or social purpose and not with a view to earning profit these organisations render services to their members and to the society voluntarily or for the promotion of art culture education in sports and other social and charitable purposes.

 

2. State the meaning of receipt and payment account?

Ans: Receipt and payment account is prepared at the end of the year from the cash book. It includes all receipts and payments of cash including bank despite the fact whether they relate to the current year preceding year or future period or whether they are of capital or revenue nature.

 

3. State the meaning of income and expenditure account

Ans: 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.

 

4. What are the features of Receipt and Payment accounts?

Ans: The following are the features of the receipt and payment account:

1. 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.

2. All the receipts and payments are recorded whether they are of capital nature or revenue nature. The basis of recording is cash basis.

3. 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.

4. No adjustments for outstanding, depreciation, accrued income, etc. are made in it as all transactions are recorded on a cash basis.

5. 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.

6. 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.

 

5. What steps are taken to prepare an Income and Expenditure account from a Receipt and Payment account?

Answer: The steps that are involved in the preparation of the Income and Expenditure account from the Receipt and Payment account are as follows:

1. The opening balance of cash in hand and bank balance appearing in the reception payment account will be shown on the asset side of the opening balance sheet similarly closing balance of cash and bank will be shown in the closing balance sheet.

2. All the cash receipts are shown on the liabilities side of the balance sheet keeping in mind that expenses related to these funds are deducted from the concerned fund and income related to the concerned fund is added to it.

3. The items of revenue expenditure are debited to the income and expenditure account after making the necessary adjustments for outstanding and prepaid expenses in the concerned expense.

4. The income and expenditure account is closed and balanced. It will either reveal surplus or deficit.

 

6. What is a subscription? How is it calculated?

Answer: Subscription is the amount paid by the members of a Not-for-profit organisation on a periodical basis so that their membership is not cancelled. Thus, it is a recurring source of revenue from its members. It is calculated as under:

Computation of Subscriptions

Particulars

Rs.

Total subscriptions received during the year

Add: subscription outstanding at the end

Add: Subscription received in advance at the beginning of the year

Less: subscription outstanding at beginning                                  ……….

Less: Subscription received in advance at the end of the year    .………

……….

……….

……….

……….

……….

Subscription to be shown in income and expenditure account

……….

 

7.  What is the capital fund? How it is calculated?

Ans: 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:

Particulars

Rs.

Opening balance

Add: Surplus

Less: Deficit

Add: Life membership fee

……….

……….

……….

……….

Capital fund at the end of the year

……….


8. Explain the statement: “Receipts and Payment Account is a summarised version of Cash Book’’.

Ans: A receipt and payments Account is prepared at the end of the year from the cash book. The receipt and payment account begins with opening cash and bank balance on the debit side. All receipts are recorded on the debit side and all payments on the credit side balance represent the closing cash and bank balance.

The similarity between receipt and payments account and cash book

The following are the features of receipt and payment account that are common to those of cash book:

  1. All receipts are recorded on the debit side and all payments are recorded on the credit side in both.

  2. Receipts and payment account is a real account as cash book

  3. It starts with the opening balance of cash in hand and cash at the Bank and the closing balance also represents cash in hand and cash at the bank similar to the cash book.

  4. No adjustment for outstanding depreciation accrued income etc. is made like the transactions recorded in the cash book.

  5. Like a cash book, it helps to ascertain the cash in hand and cash at the bank at the end of the accounting period.

 Based on the similarities the above statement, receipt and payment account is a summarised version of the cash book is justified.


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

Ans: The income and expenditure account is a nominal account it is prepared to depict the result of a not for profit organisation during an accounting period. The principles of preparation of profit and loss accounts apply for the preparation of income and expenditure accounts as well. It is prepared on an accrual basis of accounting based on the principle of matching concept.

Similarities between income and expenditure account and profit and loss account.

  1. Both the accounts are nominal accounts.

  2. Revenue expenses and revenue incomes are recorded related to the current accounting period, in both accounts.

  3. Both cash and non-cash items like Bank that depreciation etc are taken into consideration as both the accounts are prepared on an accrual basis.

  4. Both accounts record transactions related to the current year, previous year and next year transactions are excluded.

Based on the above similarities, the income and expenditure account of a not-for-profit organisation is keen to profit and loss account of a business concern.

 

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

Ans:

Basis

Receipts and Payments Account

Income and Expenditure Account

Nature of account

It is a real account.

It is a nominal account.

Nature

It is a summarised form of cash book.

 

It is similar to the profit and loss account of a business.

Basis

 

It is prepared on a cash basis of accounting.

It is prepared on an accrual basis of accounting.

Capital and revenue items

It includes the recording of items of both capital and revenue nature.

It contains recordings of only revenue items.

Period

 

It includes reception and payments made during the year whether they relate to past, current or future dates.

It includes income and expenditure for the current year only.

Opening balance

The opening balance represents cash in hand and cash at the Bank.

It does not contain any opening balance.

Sides

 

The debit side represents cash and the credit side represents cash payments.

The debit side of this account contains expenses and losses and the credit side contains incomes and gains

Closing balance

The closing balance of this account represents cash and bank balance.

The closing balance of this account represents a surplus or deficit.

Adjustments

 

It does not contain any adjustments. It is prepared on a cash basis.

It contains adjustments for outstanding prepaid accrued income etc. as it is prepared on an accrual basis.

Balance sheet

Receipts and payments accounts need not be accompanied by a balance sheet.

Income and expenditure accounts are generally accompanied by a balance sheet.

 

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

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

  1. It is a nominal account so expenses and losses are debited while gains and incomes are credited to this account.

  2. It is prepared for an accounting period showing all expenses and incomes of the accounting period are shown whether paid or due.

  3. 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.

  4. It does not include capital expenditures and capital receipts.

  5. Both cash and non-cash items like bad depreciation etc are taken into consideration.

  6. 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.

  7. The balance of income and expenditure accounts at the end represents their surplus or deficit.

  8. 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:

  1. 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.

  2. All the receipts and payments are recorded whether they are of capital nature or revenue nature. The basis of recording is cash basis.

  3. 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.

  4. No adjustment for outstanding, depreciation, accrued income, etc. is made in it as all transactions are recorded on a cash basis.

  5. 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.

  6. 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.


12.  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


(i) Annual subscription

Ans:

(i) It is shown on the debit side of the receipts and payments account

(ii) Amount related to the current year whether received or not received are shown on the credit side of the income and expenditure account.

(iii) Advance subscriptions are shown on the liability side of the balance sheet

(iv) Subscription outstanding are shown on the asset side of the balance sheet

 

(ii) Specific donation

Ans:

(i) Specific donation received is shown on the debit side of the receipts and payments account.

(ii) These are shown on the liability side of the balance sheet account.

 

(iii) Sale of fixed assets

Ans:

(i) The amount received from the sale of fixed assets are recorded on the debit side of the receipts and payments account

(ii) Profits on the sale of assets is credited and losses on the sale of fixed assets are debited to the income and expenditure account

(iii) The book value of the fixed assets sold is deducted from its respective assets on the asset side of the balance sheet

 

(iv) Sale of old periodicals

Ans:

(i) Sound received from the sale of old periodicals are shown on the debit side of the receipts and payments account

(ii) Sale of old periodicals is shown on the credit side of the income and expenditure account

 

(v) Sale of sports materials

Ans:

(i) The amount received from the sale of sports material are debited to the receipts and payments account

(ii) Sale of sports material is shown on the credit side of the income and expenditure account as it is a revenue income

 

(vi) Life membership fee

Ans:

(i) It is debited to the receipts and payments account

(ii) Life membership fees are added to the capital fund on the liabilities side of the balance sheet as it is a capital receipt.

 

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

Ans: Income and expenditure are prepared on the accrual basis of accounting based on the principle of matching concept i.e. adjustment relating to outstanding expenses prepaid expenses accrued income received in advance and depreciation are made. Incomes are shown on the credit side while expenses are shown on the debit side. There is no opening balance in the income and expenditure account but the closing balance reveals surplus if there is an excess of income over expenditure and reveals deficit if there is an excess of expenditure over income. The treatment of items when there is a specific fund for those items:

Treatment

(Tournament/Match/Prize, etc.) Fund Account

Dr.                                                                                                                         Cr.

Date

Particulars

L.F.

Amount

Date

Particulars

L.F.

Amount

 

Expenses (expenses incurred like match expenses, tournament expenses)

 

Balance c/d (b)

 

 

 

Balance b/d

 

Incomes (income or interest earned on funds invested in the form of donation, interests, dividends, etc.)

 

Income and Expenditure A/c (a)

 

 

 

(a)   If the receipts exceed the expenses for specific purposes then the difference between the two is shown in the Liabilities side of the Balance Sheet.

(b)  If the expenses exceed the receipts for the specific purpose then the difference between the two is shown in the Expenditure side of the Income and Expenditure Account.

 

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

Ans: Receipt and payment account is a summary of cash and Bank transactions during an accounting year of a not for profit organisation. Receipts and payments account is prepared at the end of the year from the cash book. The reception and payments account includes all receipts and payments of cash including Bank despite the fact that they are related to the current year preceding year or future period or whether they are of capital nature or revenue nature.

Basis

Receipts and Payments Account

Income and Expenditure Account

Nature of account

It is a real account.

It is a nominal account.

Nature

It is a summarised form of cash book.

 

It is similar to the profit and loss account of a business.

Basis

 

It is prepared on a cash basis of accounting.

It is prepared on an accrual basis of accounting.

Capital and revenue items

It includes the stock recording of items of both capital and revenue nature.

It contains recordings of only revenue items.

Period

 

It includes reception and payments made during the year whether they relate to past, current or future dates.

It includes income and expenditure for the current year only.

Opening balance

The opening balance represents cash in hand and cash at the Bank.

It does not contain any opening balance.

Sides

 

The debit side represents cash and the credit side represents cash payments.

The debit side of this account contains expenses and losses and the credit side contains incomes and gains

Closing balance

The closing balance of this account represents cash and bank balance.

The closing balance of this account represents a surplus or deficit.

Adjustments

 

It does not contain any adjustments. It is prepared on a cash basis.

It contains adjustments for outstanding prepaid accrued income etc. as it is prepared on an accrual basis.

Balance sheet

Receipts and payments accounts need not be accompanied by a balance sheet.

Income and expenditure accounts are generally accompanied by a balance sheet.

 

Numerical Questions

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


Rs.

Opening balance:


Cash in Hand

5,000

Cash at Bank

25,000

Subscriptions

1,65,000

Donations

35,000

Investment Purchased

80,000

Rent Paid

20,000

General Expenses

21,500

Postage and stationery

2,000

Courier charges

1,000

Sundry Expenses

2,500

Closing Cash in Hand

12,000


Ans:

Receipts and Payment A/c

Receipts

Amount

Payment

Amount

To Balance b/d:


By Investment purchased

80000

Cash in hand

5000

By Rent paid

20000

Cash at bank

25000

By General Expenses

21500

To Subscriptions

165000

By Postage and Stationary

2000


To Donations


35000

By Courier Charges

1000



By Sundry Expenses

2500



By Balance c/d:




Cash in hand

12000



Cash at bank

91000


230000


230000


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

Receipt and Payment Account for the year ending March 31, 2015

Receipts

Amount (Rs.)

Payments

Amount (Rs.)

Balance b/d


Furniture

3,000

Cash at Bank

22,000

Investments

55,000

Cash in Hand

8,800

Advance for building

20,000

Donations

16,000

Charities

60,000

Subscriptions

50,200

Salaries

10,400

Endowment fund

60,000

Rent and Taxes

4,000

Legacies

12,000

Printing

1,000

Interest on Investment

3,800

Postage

300

Interest on Deposits

800

Advertisements

1,100

Sale of old newspapers

500

Insurance

4,800

Donation for building

16,000

Balance c/d:


Legacy for building

12,000

Cash at bank

32,000



Cash in hand

10,500


2,02,100


2,02,100


Prepare the Income and Expenditure Account for the Year ended on March 31, 2015, after considering the following:

i. Liabilities to be provided for are:
Rent Rs. 800; Salaries Rs. 1,200; advertisement Rs. 200.

ii. Rs. 2,000 due for interest on investment was not actually received.

Ans:

Income and Expenditure A/c

for the year ending March 31, 2007


Expenditure

Amount


Income

Amount

To Charities

60000

By Donations

16000


To Salaries

1040

0



By Subscriptions


50200

(+) O/s Salary


1200


11600


By Legacies


12000

To Rent and Taxes


4000


By Interest on Investment

380

0



(+) O/s Rent


800


4800

(+) Accrued

Interest

200

0


5800


To Printing


1000

By Interest on Deposits


800


To Postage


300

By Sale of Old Newspapers


500

To Advertisement



1100



(+) O/s Advertisement



200



1300


To Insurance

4800



To Surplus (BF)

1500




85300


85300


Working:

(i) Legacies = 50% of 24000 = 12000
Donations = 50% of 32000 = 16000


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

Details

Amount (Rs.)

Fees collected, including Rs.80,000 on account of the

5,20,000

previous year


Fees for the year outstanding

30,000

Salary paidthe the, including Rs. 5,000 on account

68,000

of the previous year


Salary outstanding at the end of the year

3,000

Entertainment expenses

8,000

Tournament expenses

25,000

Meeting Expenses

18,000

Travelling Expenses

7,000

Purchase of Books and Periodicals, including

40,000

Rs. 31,000 for purchase of Books


Rent

15,000

Postage, telegrams and telephones

6,000

Printing and Stationery

18,000

Donations received

25,000


Ans:

Income and Expenditure A/c


Expenditure

Amount


Income

Amount


To Salaries

6800

0



By Fees

52000

0



(-) O/s Salary of PY



5000


(-) O/s Fees of

PY



80000



6300

0



44000

0



(+) O/s Salary of CY



3000



66000

(+) Fees Receivable



30000


47000

0

To Entertainment Expense


8000

By Donation Received


25000

To Tournament Expense


25000



To Meeting Expense

18000



To Travelling Expense


7000




To Purchase of Periodicals


9000



To Rent

15000



To Postage,

Telegram, Telephones



6000



To Printing and Stationary


18000




To Surplus

32300

0




49500

0


49500

0


Working:
Purchase of Periodicals = 40000 – 31000 = 9000


4. 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:


Rs.

Sports Fund as on 1.4.2015

35,000

Sports Fund Investments

35,000

Interest in Sports Fund

4,000

Donations for Sports Fund Investment

15,000

Sports Prizes awarded

10,000

Expenses on Sports Events

4,000

General Fund

80,000

General Fund Investments

80,000

Interest on General Fund Investments

8,000


Ans:

Income and Expenditure A/c

Expenditure

Amount

Income

Amount



By Interest on General Fund



8000

Investment

Balance Sheet

Liabilities

Amount

Assets

Amount


Sports Fund


35000


Sports Fund Investment


35000


(+) Interest in Sports Fund



4000


General Fund

Investment



80000

(+) Donation for Sports Fund


15000





54000




(-) Expenses on Sports Event


4000




(-) Prize

Awarded


10000


40000



General Fund

80000




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 of 31.3.2017:


Rs.

(a) Donation received during the year for the

12,25,000

construction of a permanent Pavilion


Expenditure incurred up to 31.3.2017 on its construction

10,80,000

The total estimated expenditure on construction

25,00,000

of Pavilion being


(b) Tournament Fund:


Balance as on 1.4.2016

10,700

Subscriptions for tournaments received during the year

65,800

Expenditure incurred during the year on conducting

72,400

tournaments


(c) Life Membership fee received during the year

28,000


Give reasons for your answers.

Ans: (a)

Balance Sheet

as of March 31, 2007

Liabilities

Amount

Assets

Amount



Donation for Pavilion



122500

0


Construction of Pavilion in Progress



108000

0

(-) Expenses on Construction of

Pavilion


108000

0



145000



Capital





(+) Pavilion Construction

108000

0

108000

0




Reason:

A donation for the construction of the Pavilion is a donation for a specific purpose.

Expense on construction on the Pavilion is a Capital Expenditure.


b.

Balance Sheet

as of March 31, 2017

Liabilities

Amount


Assets

Amount


Tournament Fund

1070

0




(+) Subscription for Tournament

6580

0





7650

0




(-) Tournament Expenses

7240

0


4100




Reason:

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


c.

Balance Sheet

as of March 31, 2017

Liabilities

Amount

Assets

Amount

Life Membership Fee


28000




Reason:

Life Membership Fees are considered as capital receipts and are shown on the Liabilities side on the Balance Sheet if nothing is specified about its treatment. But if it is to be treated as a revenue item, then it is shown on the credit side of the Income and Expenditure account.


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

Receipt and Payment Account for the year ending as on December 31, 2017

Receipts

Amount

(Rs.)

Payments

Amount

(Rs.)

Balance b/d


General Expenses

3,200

Cash in hand

4,000

Newspaper

1,850

Cash at Bank

15,550

Electricity

3,000

Subscriptions


Fixed deposit with a bank

18,000

2016 1,200


(on 31.06.2017) @ 10% p.a.


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


Furniture (purchased)

10,500

(book value Rs.5000)

3,700

Balance c/d


Interest received on FD

450

Cash in hand

3,000



Cash at bank

8,200


65,150


65,150


Information:

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

(ii)On December 31, 2017, Salary outstanding was Rs.600, and one month rent was paid in advance.

(iii) On Jan. 01, 2016 orgnisation owned Furniture Rs.12,000, Books Rs.5,000.

Ans:

Income and Expenditure A/c

for the year ending December 31, 2017


Expenditure

Amount


Income

Amount

Loss on sale of old furniture


1300


Subscription

2650

0



General Expenses


3200

(+) O/s for 2006


1500


28000


Newspaper


1850

Sale of old newspaper


1250


Electricity

3000

Government Grant

12000




Salary


360

0


Interest received on

FD



450

(+) O/s Salary for

2006



600



4200


(+) Accrued interest



450


Rent

650

0




(-) Prepaid for 2007


500


6000



[6500 x (1/3)]





Postage Charges

300




Surplus

22300





42150


42150



Balance Sheet

as of December 31, 2017

Liabilities

Amount

Assets

Amount


Capital Fund (BF)


38550

Subscription Outstanding


2000



Cash in hand

4000



Cash at bank

15550



Furniture

12000



Books

5000


38550


38550


Balance Sheet

as of December 31, 2017

Liabilities

Amount

Assets

Amount


Capital

3855

0



Prepaid Rent


500

(+)

Surplus


2230

0



60850



Books



5000


Salary O/s

600

(+) Purchases

7000

12000

Subscription received in

advance



500



Furniture


1200

0





(+) Purchases

1050

0





2250

0




(-) Sale

5000

17500




Fixed Deposit

1800

0




(+) Accrued Interest


450


18450



Cash in hand

3000



Cash at bank

8200



O/s Subscription for 2006


1500




(+) O/s for 2005

800

2300


61950



61950


7. The following is the Receipt and Payment Account of the Nari Kalyan Samittee for the year ended December 31, 2017:

Receipts

Amount

(Rs.)

Payments

Amount

(Rs.)

Balance from last year b/d

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

750

Legal fee

1,870

(books value Rs.1,000)


Books

6,500

Interest

350

Furniture purchased 

8,600



Expenses on nukar drama 

1,300



Balance c/d:

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 Rs.750, but subscription includes Rs.500 for the year 2018.

(b) At the beginning of the year the Samiti owned building Rs.20,000 and furniture Rs.3,000 and Books Rs.2,000.

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

Ans:

Income and Expenditure A/c

for the year ending December 31, 2017

Expenditure

Amount

Income

Amount


Rent


6600


Subscription

3250

0



Electric Charge


3200

(+) O/s for 2006


750



Lecture's fee


730


3325

0



Office Expenses


1480

(-) Advance for 2007


500


32750

Depreciation

on:




Donation


2500


Books


750


Profit from Entertainment


7250

Furniture

580


Interest

350


Building

100

0


2330



Printing and Stationery


1050




Legal fee

1870




Expenses on Nukar Drama


1300




Loss on sale of books


250




Surplus

24040





42850


42850



Balance Sheet

as of December 31, 2017

Liabilities

Amount

Assets

Amount

Capital Fund (BF)


27270


Building


20000



Furniture

3000



Books

2000



Cash and Bank

2270


27270


27270


Balance Sheet

as of December 31, 2016


Liabilities

Amount


Assets

Amount


Capital Fund

2727

0



Building

2000

0


(+) Life Membership

Fees



3250


(-) 5%

Depreciation



1000



19000


(+) Surplus

2404

0


54560


Furniture


3000


Advance Subscription for 2007


500

(+)

Purchase


8600






1160

0





(-) 5%

Depreciation



580



11020




Books

2000





(+)

Purchase


6500






8500





(-) Sales

1000






7500





(-) 10%

Depreciation



750



6750




Cash in hand

8040





Cash at bank


9500





O/s Subscription



750




55060


55060




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

Receipt and Payment Account for the year ending December 31, 2017

Receipts

Amount

(Rs.)

Payments

Amount

(Rs.)

Balance b/d

7,890

Salary

11,000

Subscriptions

52,000

Electric charges 

5,500

Life membership fee

2,200

Billiard Table 

17,500

Entrance fee

3,200

Office expenses

4,100

Tournament fund

26,000

Printing & Stationery 

2,300

Locker Rent

1,250

Tournament expenses 

18,500

Sale of old sports equipment


Repair of ground 

2,000

(Costing Rs.2,200)

2,500

Furniture purchased Sports equipment

7,700

Sale of old newspaper

750

12,000

Legacy

37,500

Cash in hand 

12,690



Cash at bank 

10,000



Fixed deposit 

(on 1.10.2017 for 10% p.a)

30,000


1,33,290


1,33,290


Other Information:

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

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

Ans:

Income and Expenditure A/c

for the year ending December 31, 2017


Expenditure

Amount


Income

Amount


Salary

1100

0



Subscription

5200

0


(+) O/s Salary for 2006



1000



12000


(+) O/s for 2016



3200



Electric Charge


5500


5520

0



Office Expenses


4100

(-) O/s for 2015


1200


54000

Depreciation on:




Locker Rent


1250



Furniture


1970


(+) O/s for 2016


250


1500

Building

3600


Entrance Fees

3200

Sports Equipment


2730


8300

Profit on sale of sports equipment


300

Printing and Stationery




(2500 - 2200)

2300




Repair of Ground



2000

Sale of Old Newspaper

750

Surplus


26300

Accrued Interest

750



60500


60500


Balance Sheet

as of December 31, 2017

Liabilities

Amount

Assets

Amount


Capital Fund (BF)


74590

Subscription O/s


1200



Building

36000



Furniture

12000



Books

17500



Cash and Bank

7890


74590


74590


Balance Sheet

as of December 31, 2017


Liabilities

Amount


Assets

Amount

Salary O/s

1000

Subscription O/s

3200


250


Tournament Fund

2600

0



Locker Rent O/s

(-)

Tournament Expenses


1850

0



7500



Building


3600

0




Capital Fund


7459

0


(-) 10%

Depreciation



3600


32400

(+) Life

Membership Fees



2200




Furniture


1200

0



(+) Legacy

3750

0


(+)

Purchase


7700



(+) Surplus

2630

0

14059

0


1970

0





(-) 10%

Depreciation



1970



17730




Sports Equipment

1750

0





(+)

Purchase

1200

0






2950

0





(-) Sales

2200






2730

0





(-) 10%

Depreciation



2730



24570



Billiard Table


17500






Cash in hand


12690





Cash at bank


10000





Fixed Deposit

3000

0





(+)

Accrued Interest



750



30750


149090




149090



9. 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

(Rs.)

Payments

Amount

(Rs.)

Cash in hand as on 1.4.16

6,800

Salaries

24,000

Subscription

60,200

Travelling Expenses

6,000

Donation

3,000

Stationery

2,300

Sale of furniture

4,000

Rent

16,000

(Book value Rs.6000)


Repair

700

Entrance fee

800

Books purchased

6,000

Life membership fee

7,000

Building purchased

30,000

Interest on investment

5,000

Cash in hand as 31.03.2017

1,800

(@ 5% for full-year)





86,800


86,800


Additional Information:


As on 01.04.2016

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


Ans:

Income and Expenditure A/c

for the year ending December 31, 2017


Expenditure

Amount


Income

Amount






Salary


24000


Subscription

6020

0


Loss on sale of Furniture


2000

(+) O/s for 2006


3700



(6000 - 4000)



6390

0


Travelling Expense


6000

(-) O/s for 2005


2000


Depreciation on:




6190

0



Furniture


2000


(+) Advance in 2005


1000



Books


3000


5000


6290

0



Stationary


2300


(-) Advance in 2006


3200


59700

(+)

Opening Stock



1200




Donation



3000


3500


Entrance Fees

800

(-) Closing Stock


800


2700

Interest on Investments


5000

Repairs

700




Rent

1600

0




(-) O/s for 2005


1000





1500

0









(+) O/s for 2006


2000


17000



Surplus

11100




68500


68500


Balance Sheet

as of December 31, 2017

Liabilities

Amount

Assets

Amount

Advanced Subscription


1000


Cash in hand


6800


O/s Rent


1000

Investment [5000 x (100/5)]


100000

Capital Fund (BF)


137500


O/s Subscription


2000



Stock of Stationary

1200



Books

13500



Furniture

16000


139500


139500


Balance Sheet

as of December 31, 2017


Liabilities

Amount


Assets

Amount

Advanced Subscription

3200

Subscription O/s

3700


O/s Rent


2000

Stock of Stationary


800


Capital Fund

13750

0



Investments

10000

0






(+) Life Membership

Fees



7000




Furniture


1600

0



(+) Surplus


11100

15560

0


(-) Sales


6000





1000

0




(-)

Depreciation



2000



8000




Books

1350

0




(+)

Purchase


6000





1950

0




(-)

Depreciation



3000



16500



Building

30000



Cash in hand

1800


16080

0


16080

0


10. 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 the 

Receipts

Amount

(Rs.)

Payments

Amount

(Rs.)

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 the following Information:

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

On April 1, 2016 the club owned furniture Rs.15, 000, Furniture valued at  Rs. 22,500 as on March 31, 2017. On March 31, 2016, the club had a loan of Rs.20,000 (@ 10% p.a).

Ans:

Income and Expenditure A/c

for the year ending December 31, 2006


Expenditure

Amount


Income

Amount






Salary


24000

Subscription

4000

0



Wages


7000

(+) O/s for 2006


2300


Depreciation on Furniture


2500


4230

0



Interest


2000

(-) O/s for 2005


1200


41100


Rent

1800

0



Entrance Fees


3200

(+) O/s for 2006


1500



Locker Rent


1200


1950

0


Profit from Entertainment


3000

(-) O/s for 2005


1500


18000


Deficit (BF)


6100

Postage

1000




(+) Opening Stock


300





1300




(-) Closing Stock


200


1100




54600


54600


Balance Sheet

as of December 31, 2015

Liabilities

Amount

Assets

Amount

10% Loan

20000

Cash in hand

2600







O/s Rent



1500

Stock of Postage

Stamps



300



O/s Subscription


1200



Furniture

15000



Capital Fund Deficit (BF)


2400


21500


21500


Balance Sheet

as of December 31, 2016


Liabilities

Amount


Assets

Amount

10% Loan

20000

Subscription O/s

2300


O/s Rent


1500

The stock of Postage Stamps


200

Donation for Building


23000

Billiard Table


14000



Capital Fund

- 240

0




Cash in hand



4000

(+) Life

Membership Fees


700

0




Furniture


1500

0



(-) Deficit

610

0


(+)

Purchase

1000

0





2500

0









(-)

Depreciation



2500



22500



Capital Fund Deficit


1500


44500


44500


11. 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

(Rs.)

Payments

Amount

(Rs.)

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, 2015

Liabilities

Amount

(Rs.)

Assets

Amount

(Rs.)

Advance locker rent 

200

Cash in hand 

12,000

Subscription received in 

1,000

Outstanding subscription 

3,000

Advance


Building

35,000

Outstanding salary 

2,000



Loan

10,000

Capital fund

36,800


50,000


50,000


Ans:

Income and Expenditure A/c

for the year ending December 31, 2016


Expenditure

Amount


Income

Amount


Salary


4000


Subscription

2200

0


Telephone Expenses


800

(+) Advance in 2005


1000


23000

Newspaper

700

Locker Rent

1000


Sundry Expenses


1000

(+) Advance in 2005


200


1200

Surplus

31500

Entrance Fees

2800



Government Grants

11000


38000


38000


Balance Sheet

as of December 31, 2016


Liabilities

Amount


Assets

Amount


Loan


10000

Subscription O/s for 2015


1000


O/s Salary for 2005


1000

(3000 -

2000)







Capital Fund

3680

0



Furniture


4000

(+) Life Membership Fees


1200


Defence bonds


18000


(-) Deficit

3150

0


69500


Land


20000



Building

35000



Cash in hand

2500


80500


80500


12. 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

(Rs.)

Payments

Amount

(Rs.)

Balance b/d

15,000

Furniture

18,000

Sale of Old furniture


Library books

10,000

(costing Rs. 6,000)

4,000

Salaries

72,000

Subscriptions:


General expenses

18,000

2015-16 18,000


Electric charges

12,000

2016-17 60,000


Newspapers

33,800

2017-18 12,000

90,000

Postage

3,000

Sale of old newspapers

10,800

Stationery

40,000

Profit from entertainment

44,000

Audit fee

8,000

Rent

84,000

Balance c/d

33,000


2,47,800


2,47,800


Balance Sheet as of March 31, 2016

Liabilities

Amount

(Rs.)

Assets

Amount

(Rs.)

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 Rs. 150.

2. On 31.3.2017 salaries outstanding amounted to Rs. 1,200 and salaries paid included Rs. 6,000 for the year 2015-16.

3. Provide 5% depreciation on Land and Building.

Ans:

Income and Expenditure A/c

for the year ending March 31, 2017


Expenditure

Amount


Income

Amount

Loss on sale of Old Furniture


2000


Subscription


75000


(6000 - 4000)


(500 members at Rs.150 each)



General Expenses


18000

Sale of Old

Newspaper


10800


Electric Charges


12000

Profit from Entertainment


44000

Salaries

72000


Rent

84000

(+) O/s for 2005-06


1200



Deficit (BF)


200


73200




(-) O/s for 2006-07


6000


67200



Newspaper

33800



Postage

3000



Stationary

40000



Audit Fees

8000



Depreciation on Land and Building


30000




214000


214000


Balance Sheet

as on March 31, 2017


Liabilities

Amount


Assets

Amount

Advance

Subscription for 2007-08



12000



Subscription O/s



15000

O/s Salaries

1200

Cash and Bank

33000

Capital Fund

69400

0



Furniture


37000



(-) Deficit


200

69380

0

(+)

Purchase


18000





55000




(-) Sales

6000

49000



Library Books


30000




(+)

Purchase


10000


40000



Land and Building

60000

0




(-) 5%

Depreciation



30000


57000

0


70700

0


70700

0


13. 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

(Rs.)

Sports Fund as on April 1, 2016

80,000

Sports Fund Investments

80,000

Interest in 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


Ans:

Income and Expenditure A/c for the year ending March 31, 2016

Expenditure

Amount

Income

Amount



By Interest in General Fund

Investment



20000


Balance Sheet as of March 31, 2016


Liabilities

Amount


Assets

Amount


Sports Fund


80000


Sports Fund Investment


80000

(+) Interest in Sports Fund


8000


General Fund Investment


200000






(+) Donation for Sports Fund


30000





11800

0




(-) Events

7000




(-) Sports Prize Awarded