Chapter 1 Accounting for Not for Profit Organisation Solutions

Question - 31 : - 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

Rs

Payments

Amount

Rs

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 Rs 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 Rs 900. Subscriptions outstanding on March 31, 2016 were Rs 3,600.
(b) On March 31, 2017, salary outstanding amounted to Rs 1,000, Salary paid included Rs 1,000 for the year 2012.
(c) On April 1, 2017 the club owned land and building Rs 25,000, furniture Rs 2,600 and books Rs 6,200.

Answer - 31 : -

Income and Expenditure Account as on December 31, 2017
Dr.					Cr.
Expenditure		Amount Rs	Income		Amount Rs
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 Rs 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 Rs	Assets	Amount Rs
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 Rs	Assets		Amount Rs
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

Question - 32 : - Following is the Receipt and Payment Account of Women’s Welfare Club for the year ended December 31, 2017:

Receipt and Payment Account

for the year ending December 31, 2017

Receipts

Amount

Rs

Payments

Amount

Rs

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

Rs

31.12.2017

Rs

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.

Answer - 32 : -

Books of Women Welfare Club Income and Expenditure Account as on December 31, 2017
Dr.					Cr.
Expenditure		Amount Rs	Income		Amount Rs
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 Rs	Assets	Amount Rs
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, 2017
Liabilities		Amount Rs	Assets		Amount Rs
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

Question - 33 : - 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

Rs

Credit Balances

Rs

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 Rs 900 and Rs 60 respectively. Provide depreciations Rs 60 on fixtures and fittings, Rs 390 on billiard table and Rs 560 on furniture.

Answer - 33 : -

Important Note:

1. Credit side of the Trial Balance of the question is short by Rs 60. Thus, in order to tally both sides of the Trial Balance, Suspense Account will be opened with the difference amount of Rs 60.

2. In the adjustment, Closing Stock should be Rs 960 instead of Rs 900.

Books of Indian Chartered Accountants Recreation Club Restaurant Trading Account
Dr.				Cr.
Particulars		Amount Rs	Particulars		Amount Rs
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 Rs	Income		Amount Rs
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 Rs	Assets		Amount Rs
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

Free - Previous Years Question Papers

Receipt and Payment Account for the year ending March 31, 2017
Receipts		Amount Rs	Payments	Amount Rs
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 Rs 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

	01.01.2017 Rs	31.12.2017 Rs
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

Debit Balances	Rs	Credit Balances	Rs
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

Chapter 1 Accounting for Not for Profit Organisation Solutions

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