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Question -

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:

 

Rs

(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 youranswers



Answer -

(a)

                                      Books of Bombay Women Cricket Club
                                                            Balance Sheet 
                                                      as on March 31, 2017

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

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

Reason

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

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