Not For Profit Organisation: Basic Concepts

NAHTA PROFESSIONAL CLASSES M:8878819888 / 8518819888
CH - 9
NOT FOR PROFIT ORGANISATION
DANGAL QUESTIONS
ICAI RTP Questions ICAI Past Questions TOTAL Questions
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BASIC CONCEPTS
9.1 |Page FACULTY:CA PRATIK NAHTA


ADJUSTMENT NO 1 : FUND BASED ACCOUNTING

DONATION FOR ASSET DONATION FOR SPECIFIC
FUND EXP.
S. PARTICULARS
NO
.
1. Donation Received
2. Amount Invested
3. Interest Received from

Investment
4. Sale of Investment
5. Asset Purchased /
Amount Distributed as
Prizes
6. Amount Transferred to
Capital Fund / General
Fund

ADJUSTMENT NO 2 : SUBSCRIPTION
LEDGER FORMAT
Dr. SUBSCRIPTION ACCOUNT Cr.
Particulars Rs. Particulars Rs.
To Outstanding Subscription A/c XXX By Advance Subscription A/c XXX
(Outstanding Subscription in the (Advance Subscription in the
beginning) beginning)
To Income & Expenditure A/c XXX By Bank A/c (Total Subscription XXX
(balancing figure) received during the current year)
To Advance Subscription A/c By Outstanding Subscription A/c XXX
(Advance Subscription at the end) XXX (Outstanding subscription at the end)
XXX XXX

Lets DANGAL with ICAI RTP QUESTIONS
QUESTION 1 MAY 2018

Smith Library Society showed the following position on 31st March, 2017.
Balance Sheet as on 31st March, 2017
The receipts and payment account for the year ended on 31st March, 2018 is given below:
You are required to prepare income and expenditure account for the year ended 31st March, 2018
and a balance sheet as at 31s, March, 2018 after making the following adjustments:
Membership subscription included Rs. 10,000 received in advance.
Provide for outstanding rent Rs. 4,000 and salaries Rs. 3,000.
Books to be depreciated @ 10% including additions. Electrical fittings and furniture are also to be
depreciated at the same rate. 75% of the entrance fees is to be capitalized.
Interest on securities is to be calculated @ 5% p.a. including purchases made on 1.10.2017 for Rs.
40,000.
Sol: Smith Library Society
Income and Expenditure Account
for the year ended 31st March, 2018
Expenditure Rs. Rs. Income Rs.

To Electric charges 7,200 By Entrance fee (25% of 7,500

Rs. 30,000)
To Postage and 5,000

stationary
To Telephone 5,000 By Membership 2,00,000

charges
To Rent 88,000 subscription 10,000 1,90,000
Add: Outstanding 4,000 92,000 Less: Received in

advance
To Salaries 66,000 By Sale proceeds of old 1,500

papers
Add: Outstanding 3,000 69,000
To Depreciation By Hire of lecture hall 20,000

(W.N.1)
Electrical fittings 15,000 Interest on securities 8,000

(W.N.2)
Furniture 5,000 Add: Receivable 500 8,500
Books 46,000 66,000 By Deficit- excess of 16,700

expenditure over
income
2,44,200 2,44,200
Balance Sheet of Smith Library Society

as on 31st March, 2018
Liabilities Rs. Rs. Asset Rs. Rs.
Capital fund 7,93,000 Electrical fittings 1,50,000

Add: Entrance fees _22,500 Less: Depreciation (15,000) 1,35,000
Less: Excess of 8,15,500
expenditure over income (16,700) 7,98,800 Furniture 50,000 45,000
Less: Depreciation (5,000)
Books 4,60,000
Less Depreciation (46,000) 4,14,000
Outstanding Expenses:
Rent 4,000
7,000
Salaries 3,000 Investment: 1,90,000

Membership Securities 1,90,500

subscription in Accrued interest 500
advance 10,000
Cash at bank 20,000
Cash in hand 11,300
8,15,800 8,15,800
QUESTION 2 NOV 2018

The following information of M/s. TT Club are related for the year ended 31st March, 2018:
(1)
(2) Subscription received during the year Rs. 3,75,000

(3) Payments for Sports Material during the year Rs. 2,25,000
You are required to:
(A) Calculate the amount of Subscription and Sports Material that will appear in Income &
Expenditure Account for the year ended 31.03.2018 and
(B) Also show how these items would appear in the Balance Sheet as on 31.03.2018.
SOL :
Subscription for the year ended 31.3.2018
Rs.
Subscription received during the year 3,75,000
Less: Subscription receivable on 1.4.2017 11,250
Less: Subscription received in advance on 31.3.2018 5,250 (16,500)
3,58,500
Add: Subscription receivable on 31.3.2018 16,500

Add: Subscription received in advance on 1.4.2017 9,000 25,500
Amount of Subscription appearing in Income & Expenditure Account 3,84,000
Sports material consumed during the year end 31.3.2018

Rs.
Payment for Sports material 2,25,000
Less: Amounts due for sports material on 1.4.2017 (67,500)
1,57,500
Add: Amounts due for sports material on 31.3.2018 97,500
Purchase of sports material 2,55,000
Sports material consumed:
Stock of sports material on 1.4.2017 75,000
Add: Purchase of sports material during the year 2,55,000

3,30,000
Less: Stock of sports material on 31.3.2018 (1,12,500)
Amount of Sports Material appearing in Income & Expenditure Account 2,17,500
Balance Sheet of M/s TT Club For the year ended 31stMarch, 2018 (An extract)
Liabilities Rs. Assets Rs.
Unearned Subscription 5,250 Subscription receivable 16,500
Amount due for sports material 97,500 Stock of sports material 1,12,500
QUESTION 3 MAY 2019

The Receipts and Payments account of Trustwell Club prepared on 31st March, 2018 is as follows:
Receipts and Payments Account
Additional information:
Trustwell club had balances as on 1.4.2017: -
Furniture Rs. 1,800; Investment at 5% Rs. 27,000; Sports material Rs. 6,660;
Balance as on 31.3.2018:
Subscription Receivable Rs. 270; Subscription received in advance Rs. 90;
Stock of sports material Rs. 1,800.
Do you agree with above Receipts and Payments account? If not, prepare correct Receipts and
Payments account and Income and Expenditure account for the year ended 31st March, 2018 and
Balance Sheet on that date.
SOL:

Corrected Receipts and Payments Account of Trust well Club

Receipts Amount Payments Amount
To Balance b/d 450 By Expenses 3,600

(Rs. 6,300 – Rs.2,700)
To Subscription By Sports Material 2,700

Annual Income 4,590
Less: Receivable as on 31.3.2018 270 By Balance c/d 90,720
Add: Advance received for the year 90 (Cash in Hand and at Bank)
2018–2019
Add: Receivable as on31.3.2017 180
Less: Advance received as on 90 4,500

31.3.2017
To Other Fees 1,800
To Donation for Building 90,000
To Sale of Furniture 270
97,020 97,020
Income and Expenditure Account of Trustwell club

Expenditure Amount Income Amount
Rs. Rs.
To Sundry Expenses 3,600 By Subscription 4,590
To Sports Material By Other fees 1,800
Balance as on 1.4.2017 6,660 By Interest on 1,350
investment
Add: Purchases 2,700 (5% on Rs. 27,000)
Less: Balance as on 31.3.2018 By Deficit: Excessof
1,800 7,560 Expenditure over Income 3,600
To Loss on sale of Furniture 180
11,340 11,340
QUESTION 4 NOV 2019

From the following data, prepare an Income and Expenditure Account for the year ended 31st
December 2019, and Balance Sheet as at that date of the Jeevan Hospital:
Receipts and Payments Account for the year ended 31 December, 2019

SOL:
JeevanHospital
Income &Expenditure Account fortheyearended31December,2019
Expenditure (Rs.) Income (Rs)
To Salaries 24,000 By Subscriptions 24,500
To Diet expenses 15,600 By Govt. Grants (Maintenance) 20,000
To Rent & Rates 1,700 By Fees, Sundry Patients 4,800
To Printing & Stationery 2,400 By Donations 8,000
To Electricity & Water- 2,400 By Benefit shows (net 6,000
charges collections)
To Office expenses 2,000 By Interest on Investments 800
To Excess of Income over
expenditure transferred to
Capital Fund 16,000
64,100 64,100

Balance Sheet as at 31st Dec., 2019

Liabilities Rs. Rs. Assets Rs. Rs.
Capital Fund : Building :
Opening balance 49,300 Opening balance 90,000
Excess ofIncome Addition 50,000 1,40,000
Over Expenditure 16,000 65,300 Hospital Equipment :
Building Fund : Opening balance 34,000
Opening balance 80,000 Addition 17,000 51,000
Add :Govt. Grant 80,000 1,60,000 Furniture 6,000
Subscriptions Investments-
received in advance 2,400 8% Govt. Securities 20,000
Subscriptions 1,400
receivable
Accrued interest 800
Prepaid expenses 300
(Rent)
Cash at Bank 6,800
Cash in hand 1,400
2,27,700 2,27,700
QUESTION 5 MAY 2020

Doctor Dinesh after retiring from Govt. service, started private practice on 1st April, 2018 with Rs.
1,00,000 of his own and Rs. 1,50,000 borrowed at an interest of 12% per annum on the security of
his life policies. His accounts for the year were kept on a cash basis and the following is his
summarized cash account:

One-third of the motor car expense may be treated as applicable to the private use of car and Rs.
15,000 of salaries are in respect of domestic servants.
The stock of medicines in hand on 31st March, 2019 was valued at Rs. 47,500.
You are required to prepare his capital account and income and expenditure account for the year
ended 31st March, 2019 and balance sheet as on that date. Ignore depreciation of fixed assets.
Sol :
Income and Expenditure Account
Capital Account


Let’s DANGAL with ICAI PAST EXAMS QUESTIONS

Q1> The following is the Receipts and Payments Account of Apollo Club in respect of the year to 31st March
,2018.
Receipts Rs. Payments Rs.

To Balance b/d (Cash in hand) 2,000 By Salaries 3,000
To Subscriptions: By Stationery 1,000
2016-2017 3,000 By Rates and Taxes 300
2017-2018 4,000 By Telephone Charges 1,500
2018-2019 1,000 8,000 By 12% Securities at par 5,000
To Profit on sports 3,000 By Sundry Expenses 200
To Interest on 12% Securities 1,000 By Balance c/d (Cash in hand) 3,000
14,000 14,000
The following additional facts are ascertained:
(a) There are 500 members, each paying an annual subscription of Rs. 10; Rs. 3,500 being in arrears for
2016-2017 at the beginning of 2017-2018. During 2016-2017, subscriptions were paid in advance by 30
members for 2017-2018.
(b) Stock of stationery at March 31, 2017 was Rs. 400 and at March 31, 2018, Rs. 500.
(c) At March 31, 2018, the rates and taxes were prepaid to the following 31st January, the yearly charge
being Rs. 300.
(d)A quarter’s charge for telephone is outstanding, the amount accrued being Rs.300. The charge for
each quarter is same for both 2016-2017 and 2017-2018.
(e) Sundry Expenses accruing at March 31,2017 were Rs. 50 and at March 31,2018 Rs. 60.
(f) At March 31, 2017 Building stood in the books at Rs. 30,000 and it is required to write off
depreciation at 10% p.a.
(g)Face Value of 12% Securities at March 31, 2017 was Rs. 10,000 which were purchased at that date

for Rs. 15,000. Additional Securities worth Rs. 5,000 are purchased at par on 31 March, 2018.
You are required to prepare:
(i) An Income and Expenditure Account for the year ended March 31,2018, and
(ii) A Balance Sheet at that date.
Sol: INCOME AND EXPENDITURE ACCOUNT

Dr. for the year ending 31st March, 2018 Cr.
Expenditure Rs. Income Rs.
To Stationery: 1,000 Add: Adv in the beg 300
Add: Opening stock 400 Add: O/s at end 700 5,000
Less: Closing Stock 500 900 By Profits on Sports 3,000
To Rates and Taxes 300 By Interest on Securities 1,000
Less: Prepaid at end 250 Add: Accrued 200 1,200
Add: Prepaid in the beg 250 300 [(12% on Rs. 10,000 — Rs. 1,000]
To Telephone charges 1,500
Less: O/s in the beg 600
Add: O/s at the end 300 1,200
To Sundry Expenses 200
Less: O/s in the beg 50
Add: O/s at the end 60 210
To Depreciation on Building 3,000
To Surplus transferred to Capital Fund 590
9,200 9,200
BALANCE SHEET AS AT 31 ST MARCH, 2018

Outstanding Expenses 60 Cash in Hand 3,000
Outstanding Telephone charge 300 Subscriptions Receivable:
Subscriptions received in advance 1,000 tor 2016-2017 500
Capital fund: for 2017-2018 700 1,200
Opening Balance 50,200 Accrued Interest on 12% Securities 200
Add: Surplus 590 50,790 12% Securities (Rs. 15,000 + Rs. 5,000) 20,000

[Face Value Rs. 15,000]

Prepaid Rates and Taxes (300 x 10/12) 250
Building 30,000
Less: Depreciation 3,000 27,000
Stock of Stationery 500
52,150 52,150
Working Note:
BALANCE SHEET AS AT 31ST MARCH, 2017

Outstanding Expenses 50 Cash in Hand 2,000
Telephone Charges due Subscriptions Receivable 3,500
[ Rs. 1,500 -(Rs. 1,200 - 300)] 600 Investments in 10% Securities 15,000
Subscriptions Received in Advance 300 [Face Value Rs. 10,000]
(30x10) Building 30,000
Capital Fund (Balancing figure) 50,200 Stock of Stationery 400
Prepaid Rates and Taxes
(10/12 of Rs. 300) 250
51,150 51,150
Q2> The following is the Receipts and Payments Account of the Social Club in respect of the year ended
31st March, 2018:

To Balance b/d 10,250 By Salaries By Stationery 20,800
To Subscriptions: 4,000
2016-2017 450 By Rates 6,000
2017-2018 21,100 By Telephone 1,000
2018-2019 750 22,300 By Investment 12,500
To Profit on sports meet 15,500 By Sundry expenses 9,250
To Income from investments 10,000 By Balance c/d 4,500
58,050 58,050
The following additional information is provided to you:

(i) There are 450 members each paying an annual subscription of Rs. 50; Rs. 500 were in arrears for
2016-2017 as on 1st April, 2017.
(ii) On 31st March, 2018, the rates were prepaid to 30th June, 2018; the charge paid every year being
Rs.6,000.
(iii) There was an outstanding telephone bill for Rs. 350 on 31st March, 2018.
(iv) Outstanding sundry expenses as on 31st March, 2017 totalled Rs. 700.
(v) Stock of stationery on 31st March, 2017 was Rs. 500; on 31st March, 2018 it was Rs. 900.
(vi) On 31st March, 2017, building stood in the books at Rs. 1,00,000 and it was subject to
depreciation at 5% per annum.
(vii) Investments on 31st March, 2017 stood at Rs. 2,00,000.
(viii) On 31st March, 2018 income accrued on investments purchased during the year amounted Rs. 375.
Required: Prepare an Income and Expenditure Account for the year ended 31st March, 2018 and the
Balance Sheet as at that date.
Sol : INCOME AND EXPENDITURE ACCOUNT

Dr. for the year ending on 31st March, 2018 Cr.
To Stationery-Stock 500 By Profit on sports meet 15,500
Add: Purchases 4,000 4500 By Income on investments 10,000
Less: Closing stock 900 3,600 Add: Income accrued 375 10,375
To Rates 6,000
Less: Prepaid at the end 1,500 4,500
Add: Prepaid in the beg. 1,500 6,000
To Telephone 1,000
Add: Outstanding at the end 350 1,350
To Sundry Expenses 9,250
Less: Outstanding in the beg. 700 8,550
To Depreciation on Building 5,000

To Surplus 3,075
48,375 48,375

Capital Fund Add: 3,12,050 3,15,125 Outstanding Subscriptions Investments 1,450
Surplus 3,075 (2,00,000 + 12,500) 2,12,500
Advance Subscription in Outstanding 750 Building 1,00,000 95,000
telephone bill 350 Less: Depreciation 5,000
Prepaid rates 1,500
Stock ot stationery 900
Cash 4,500
Income on investments accrued 375
3,16,225 3,16,225
Working Notes:
Dr. (I) SUBSCRIPTION ACCOUNT Cr.

To Outstanding Subscription A/c Beg. 500 By Cash A/c 22,300
To Income and Expenditure A/c 22,500 By Outstanding Subscription A/c End. 1,450
(Rs. 50 x 450) (balancing figure)
To Advance Subscription A/c 750
23,750 23,750
(II) BALANCE SHEET AS AT 31ST MARCH, 2017

Outstanding sundry expenses 700 Building 1,00,000
Capital Fund (Balancing figure) 3,12,050 Investments 2,00,000
Stock of stationery 500
Cash 10,250
Prepaid rates 1,500
Outstanding Subscriptions 500
3,12,750 3,12,750

Q3> From the following Receipts and Payments Account of Excellent Recreation Club for the year ended
31.3.2018 and additional information given, prepare an Income and Expenditure Account for the year
ended 31.3.2018 and Balance Sheet as on 31.3.2018:

Opening Balance: Secretary’s Salary 12,000
Cash in hand and at bank 3,180 Salaries to Staff 25,000
Subscription 18,000 Charities 1,000
Sale of Old Newspapers 2,500 Printing and Stationery 600
Legacies 4,000 Postage Expenses 120
Interest on Investments 2,000 Rates and Taxes 1,500
Endowment Fund Receipts 20,000 Upkeep of the Land 2,000
Proceeds of Sport and Concerts 4,020 Purchase of Sports Materials 10,000
Advertisement in the Year Book 5,000 Telephone Expenses 3,480
Closing Balance:
Cash in hand and at bank 3,000
58,700 58,700
Assets and Liabilities were as follows:
Particulars Opening Rs. Closing Rs.

Subscription in arrears 2,000 1,000
Subscription received in advance 500 400
Furniture 2,000 1,800
Land 10,000 10,000
Depreciation shall be charged at 10% p.a. under the diminishing value method. Legacies received shall be
capitalised. Investments were made in Securities, the rate of interest being 12% p.a., the date of
investment was 1.6.2016 and the amount of investments was Rs. 20,000. Due date of interest 31 st
March every year. Stock of sports materials on 31.3.2018 were useless and valued at NIL price

To Secretary’s salary 12,000 By Subscription 17,100

To Salaries to staff 25,000 By Sale of old newspapers 2,500

To Charities 1,000 By Interest on securities 2,000
To Printing and stationary 600 Add: Amount due 400 2,400
To Postage expenses 120 By Proceeds of sport and concerts 4,020
To Rates & Taxes 1,500 By Advertisement in the Year Book 5,000
To Upkeep of Land 2,000 By Deficit, Excess of
To Sports materials written off 10,000 Expenditure over Income 24,880
To Telephone expenses 3,480
To Depreciation on furniture 200
55,900 55,900
BALANCE SHEET OF EXCELLENT RECREATION CLUB AS AT 31 ST MARCH, 2018

Capital Fund: Land 10,000
Opening balance 36,680 Furniture 2,000
Less: Deficit. 24,880 Less: Depreciation 200 1,800
Add: Legacies 4,000 15,800 Sports Materials 10,000
Endowment Fund 20,000 Less: Written off 10,000 —
Advance Subscription 400 Investment in Securities 20,000
Outstanding Subscriptions 1,000
Interest Due 400
Cash in hand and at Bank 3,000
36,200 36,200
Working Notes:
(I) BALANCE SHEET OF EXCELLENT RECREATION CLUB AS AT 31 ST MARCH, 2017

Capital (Balancing Figure) 36,680 Land 10,000
Advance Subscription 500 Furniture 2,000
Investments in Securities 20,000
Outstanding Subscription 2,000
Cash in hand and at Bank 3,180
37,180 37,180

Dr. (II) SUBSCRIPTION ACCOUNT Cr.

To Outstanding Subscription A/c 2,000 By Advance Subscription A/c 500
To Income & Expenditure A/c (b/f) 17,100 By Bank A/c 18,000
To Advance Subscription A/c 400 By Outstanding Subscription A/c 1,000
19,500 19,500
Q4> The Accountant of Diana Club furnishes you the following Receipts and Payments account for the year
ending 31st March, 2018:

Opening Balance: Honoraria to Secretary 9,600
Cash and Bank 16,760 Misc. Expenses 3,060
Subscriptions 21,420 Rates and Taxes 2,520
Sale of Old Newspapers 4,800 Groundman’s Wages 1,680
Entertainment Fees 8,540 Printing and Stationery 940
Bank Interest 460 Telephone Expenses 4,780
Bar Receipts 14,900 Payment for Bar Purchases 11,540
Repairs 640
New car (Less-sale Proceeds of
Old Car Rs. 6,000) 25,200
Closing Balance:
Cash and Bank 6,920
66,880 66,880
Additional Informations:
Particulars Opening Rs. Closing Rs.

(i) Subscription due (not received) 2,400 1,960
(ii) Cheques issued, but not presented for payment of printing 180 60
(iii) Club premises at cost 58,000 —
(iv) Depreciation on club premises provided so far 37,600 —
(v) Car at cost 24,380 —
(vi) Depreciation on car 20,580 —
(vii) Value of Bar stock 1,420 1,740
(viii) Amount unpaid for bar purchases 1,180 860

(ix) Depreciation is to be provided @ 5% p.a. on the written down value of the club premises and @
15% p.a. on car for the whole year.
Required: Prepare an Income and Expenditure account of Diana Club for the year ending 31st March,
2018 and Balance Sheet as on that date.

Dr. for the year ended 31st March, 2018 Cr.
To Honoraria to Secretary 9,600 By Subscriptions 20,980
To Misc. Expenses 3,060 By Sale of Old Newspapers 4,800
To Rates and Taxes 2,520 By Entertainment Fees 8,540
To Groundman’s Wages 1,680 By Bank Interest 460
To Printing and Stationary 940 By Bar Receipts 14,900
To Telephone Expenses 4,780 By Profit on Sale of Car 2,200
To Bar Expenses Opening Bar Stock 1,420
Add: Purchases 11,220
Less: Closing Bar Stock 1,740 10,900
To Repairs 640
To Depreciation:
Club Premises 1,020
Car 4,680 5,700
To Surplus t/f to Capital Fund 12,060
51,880 51,880

Capital Fund Club Premises 19,380
Opening Balance 43,600 Car 26,520
Add: Excess of Income Bar Stock 1,740
over Expenditure 12,060 55,660 Outstanding Subscription 1,960
Outstanding Liabilities for Cash and Bank 6,920
Bar Purchases 860
56,520 56,520

Working Note:
(I) BALANCE SHEET OF DIANA CLUB

As at 31st March, 2017
Amount Due for Bar Purchases 1,180 Club Premises 58,000
Capital Fund on 1.10.2002 (Balancing Figure) 43,600 Less: Depreciation 37,600 20,400
Car 24,380
Less: Depreciation Bar Stock 20,580 3,800
Outstanding 1,420
Subscription 2,400
Cash and Bank 16,760
44,780 44,780
(II) CALCULATION OF BAR PURCHASES FOR THE YEAR

Particulars Rs.
A. Bar payments as per receipts and payments account 11,540
B. Add: Amount due at the end 860
C. Less: Amount due in the beginning (1,180)
11,220
(III) CALCULATION OF SUBSCRIPTIONS ACCRUED DURING THE YEAR

Particulars Rs.
A. Subscriptions received 21,420
B. Add: Outstanding at the end 1,960
C. Less: Outstanding at the beginning (2,400)
20,980
(IV) DEPRECIATION ON CLUB PREMISES AND W.D.V

Particulars Rs.
A. Written down value on 1 st April (58,000 - 37,600) 20,400
B. Less: Depreciation for the year @ 5% p.a. (1,020)
19,380
(V) CALCULATION OF PROFIT ON SALE OF CAR

Particulars Rs.
A. Sale Proceeds of old car 6,000
B. Less: Written down value of old car:

Cost of car 24,380

2,200
(VI) DEPRECIATION ON CAR AND WRITTEN DOWN VALUE

Particulars Rs.
A. Cost of new car purchased (25,200 + 6,000) 31,200
B. Less: Depreciation for the year @ 15% p.a. 4,680
C. Written down value 26,520
Note: The opening and closing balance of cash and bank shown in the Receipts and Payments Account
(given in the question), include the bank balance as per cash book. Therefore, no adjustment has been
made in the above solution on account of cheques issued, but not presented for payment of printing.
Q5> The following is the Receipts and Payments Account of Sydney Club for the year ended on 31st March,
2018:

Opening Balances: Salaries 1,20,000
Cash 10,000 Creditors 15,20,000
Bank 3,850 Printing and Stationery 70,000
Subscription Received 2,02,750 Postage 40,000
Entrance Donation 1,00,000 Telephones and Telex 52,000
Interest Received 58,000 Repairs and Maintenance 48,000
Sale of Assets 8,000 Glass and Table Linen 12,000
Miscellaneous Income 9,000 Crockery and Cutlery 14,000
Receipts at: Garden Upkeep 8,000
Coffee Room 10,70,000 Membership Fees 4,000
Wines and Spirits 5,10,000 Insurance 5,000
Swimming Pool 80,000 Electricity 28,000
Tennis Court 1,02,000 Closing Balances:
Cash 8,000
Bank 2,24,600
21,53,600 21,53,600

The Assets and Liabilities as on 1.4.2017 were as follows:
Fixed Assets (net): Rs. 5,00,000; Stock: Rs. 3,80,000; Investment in 12% Tax free Government
Securities: Rs. 5,00,000; Outstanding Subscription; Rs. 12,000; Prepaid Insurance: Rs. 1,000; Sundry
Creditors: Rs. 1,12,000; Subscription received in advance: Rs. 15,000, Entrance Donation Received pending
membership: Rs. 1,00,000; Gratuity Fund: Rs. 1,50,000.
The following adjustments are to be made while drawing up the Accounts:
(a) Subscription received in advance as on 31st March, 2018 was Rs. 18,000.
(b) Outstanding Subscription as on 31st March, 2018 was Rs. 7,000.
(c) Outstanding Expenses are: Salaries: Rs. 8,000 and Electricity: Rs. 15,000.
(d)50% of the Entrance Donation was to be capitalised. There was no pending membership as on 31st
March, 2018.
(e) The cost of assets sold net as on 1.4.2017 was Rs. 10,000.
(f) Depreciation is to be provided at the rate of 10% on assets.
(g)A sum of Rs. 20,000 received in October 2017 as Entrance Donation from an applicant was to be
refunded as he had not fulfilled the requisite membership qualifications. The refund was made on
30.6.2018.
(h) Purchases made during the year amounted to Rs. 15,00,000.
(i) The value of closing stock was Rs. 2,10,000.
(j) The club as a matter of policy charges off to Income and Expenditure Account all purchases made
on Account of crockery, cutlery, glass and linen in the year of purchase.
You are required to prepare an Income and Expenditure Account for the year ended on 31st March,
2018 and the Balance Sheet as on 31st March, 2018 alongwith necessary workings

Sol: INCOME AND EXPENDITURE ACCOUNT OF SYDNEY CLUB

Dr. FOR THE YEAR ENDING ON 31ST MARCH, 2018 Cr.
To Salaries 1,28,000 By Subscription 1,94,750
To Printing and Stationery 70,000 By Entrance Donation 90,000
To Postage 40,000 By Interest 60,000
To Telephone and Telex 52,000 By Miscellaneous Income 9,000
To Repairs and Maintenance 48,000 By Profit from Operations 92,000
To Glass and Table Linen 12,000 By Deficit t/f to Capital Fund 30,250
To Crockery and Cutlery 14,000
To Garden Upkeep 8,000
To Membership Fees 4,000
To Insurance 6,000
To Electricity Charges 43,000
To Loss on Sale of Assets 2,000
To Depreciation 49,000
4,76,000 4,76,000
BALANCE SHEET OF SYDNEY CLUB AS AT 31 ST MARCH, 2018

Capital Fund: Fixed Assets:
Opening Balance 10,29,850 Opening Balance 5,00,000
Add: Donation 90,000 Less: Sale 10,000
Less: Deficit 30,250 10,89,600 Less: Depreciation 49,000 4,41,000
Gratuity Fund Sundry Creditors 1,50,000 Stock 2,10,000
Subscription Received in Advance 92,000 Investments 5,00,000
Entrance Donation refundable 18,000 Outstanding 7,000
Outstanding Salaries 20,000 Subscription 2,000
Outstanding 8,000 Interest Accrued 2,24,600
Electricity Charges 15,000 Bank Cash 8,000
13,92,600 13,92,600
Working Notes:
1. BALANCE SHEET OF SYDNEY CLUB AS AT 1ST APRIL, 2017

Sundry Creditors 1,12,000 Fixed Assets 5,00,000
Subscription Received in Advance 15,000 Stock 3,80,000

Entrance Donation Received Investments 5,00,000

in Advance 1,00,000 Outstanding Subscription 12,000
Gratuity Fund 1,50,000 Prepaid Expenses 1,000
Capital Fund (Balancing figure) 10,29,850 Cash 10,000
Bank 3,850
14,06,850 14,06,850
Dr. 2. SUBSCRIPTION ACCOUNT Cr.
To Outstanding Subscription A/c 12,000 By Advance Subscription A/c 15,000
(Beginning) (Beginning)
To Income and Expenditure A/c 1,94,750 By Bank A/c 2,02,750
To Advance Subscription A/c 18,000 By Outstanding Subscription A/c 7,000
(End) (End)
2,24,750 2,24,750
3. Entrance Donation
A Entrance Donation received during the year 1,00,000
B Add: Received in Advance as on 1.4.2017 1,00,000
C Less: Entrance Donation refundable in respect of In-eligible Member 20,000
1,80,000
D Less: 50% Capitalised 90,000
E Taken to Income and Expenditure Account 90,000
4. Loss on Sale of Assets = Cost - Sale Proceeds = Rs. 10,000 - Rs. 8,000 = Rs. 2,000.
5. Depreciation = On unsold Fixed Assets = 10% of (Rs. 5,00,000 - Rs. 10,000) = Rs. 49,000.
6. Interest Accrued = Rs. 60,000 - Rs. 58,000 = Rs. 2,000
Dr. 7. TRADING ACCOUNT Cr.

To Opening Stock 3,80,000 By Receipts from Coffee Room 10,70,000
To Purchases 15,00,000 By Receipts from Wines and Spirits 5,10,000
To Profit from Operations 92,000 By Receipts from Swimming Pool 80,000
By Receipts from Tennis Court 1,02,000
By Closing Stock 2,10,000
19,72,000 19,72,000

Dr. 8. SUNDRY CREDITORS ACCOUNT Cr.

To Bank A/c 15,20,000 By Balance b/d 1,12,000
To Balance c/d 92,000 By Purchases 15,00,000
16,12,000 16,12,000
Q6> The accountant of City Club gave the following information about the receipts and payments of the
Club for the year ended on 31st March, 2018:
Receipts: Subscriptions: Rs.62,130; Fair Receipts: Rs. 7,200; Variety Show Receipts (net): Rs. 12,810;
Interest: Rs. 690; Bar Collections: Rs. 22,350.
Payments: Premises: Rs. 30,000; Rent: Rs. 2,400; Rates and Taxes: Rs. 3,780; Printing and Stationery:
Rs. 1,410; Sundry Expenses: Rs. 5,350; Wages: Rs. 2,520; Bar Purchases (Payments): Rs. 17,310; Repairs:
Rs.960; New Car (less proceeds of old car Rs. 9,000): Rs. 37,800, Fair Expenses Rs. 7,170, Honorarirum
to Secretary Rs. 11,000.
Information:
Particulars Opening Closing

Rs. Rs.
Cash in Hand 450 Nil
Bank Balance as per Cash-book 24,420 10,350
Cheque issued for Sundry Expenses not presented to the bank
(entry has been duly made in the cash-book) 270 90
Subscriptions Due 3,600 2,940
Premises (at cost) 87,000 1,17,000
Provision for Depreciation on Premises 56,400
Car (at cost) 36,570 46,800
Accumulated Depreciation on Car 30,870
Bar Stock 2,130 2,610
Creditors for Bar Purchases 1,770 1,290
Annual Honorarium to Secretary is Rs. 12,000. Depreciation on Premises is to be provided at 5% on

written down value. Depreciation on new Car is to be provided at 20%.
You are required to prepare the Receipts and Payments Account and Income and Expenditure Account
for the year ended on 31.3.2018.
Sol: RECEIPTS AND PAYMENTS ACCOUNT

To Opening Balances: By Premises 30,000
Cash in Hand 450 By Rent 2,400
Bank Balance 24,420 By Rates and Taxes 3,780
To Subscriptions 62,130 By Printing and Stationery 1,410
To Fair Receipts 7,200 By Sundry Expenses 5,350
To Variety Show Receipts (Net) 12,810 By Wages 2,520
To Interest 690 By Fair Expenses 7,170
To Bar Collections 22,350 By Honorarium to Secretary 11,000
To Sale Proceeds of old car 9,000 By Bar Purchases (Payments) 17,310
By Repairs 960
By New Car 46,800
By Closing Balances:
Cash on hand Nil
Bank balance 10,350
1,39,050 1,39,050
INCOME AND EXPENDITURE ACCOUNT

To Rent 2,400 By Subscriptions 62,130
To Rent and Taxes 3,780 Add: O/s at the end 2,940
To Printing and Stationery 1,410 Less: O/s in the beg. 3,600 61,470
To Wages 2,520 By Surplus from Fair:
To Honorarium to Secretary 12,000 Fair receipts 7,200
To Sundry Expenses 5,350 Less: Fair expenses 7,170 30
To Repairs 960 By Surplus from variety show 12,810
To Depreciation on: By Interest 690

Premises @ 5% 3,030 By Profit from Bar 6,000

Car @ 20% 9,360 12,390 By Profit on sale of car 3,300
To Excess of Income over
Expenditure transferred to Capital Fund 43,490
84,300 84,300
Working Notes:
Dr. (I) BAR CREDITORS ACCOUNT Cr.

To Bank A/c 17,310 By Balance b/d 1,770
To Balance c/d 1,290 By Bar Purchases (Balancing figure) 16,830
18,600 18,600
(ii) Profit on sale of car = Sale Proceeds - WDV = Rs. 9,000 - Rs. 5,700 = Rs. 3,300
(iii) Bar Stock Consumed = Opening Stock + Purchases - Closing Stock
= Rs. 2,130 + Rs. 16,830 - Rs. 2,610
= Rs. 16,350
(iv) Profit from Bar = Bar Collection - Bar Stock Consumed
= Rs. 22,350 - Rs. 16,350 = Rs. 6,000
Q7> The following information were obtained from the books of Delhi Club as on 31.3.2018 at the end of the
first year of the Club. You are required to prepare Receipts and Payments Account, Income and
Expenditure Account for the year ended 31.3.2018 and a Balance Sheet as at 31.3.2018 on mercantile
basis:
(i) Donations received for Building and Library Room Rs. 2,00,000
(ii) Other revenue income and actual receipts:
Particulars Revenue Income Actual Receipts

Entrance Fees 17,000 17,000

Subscription 20,000 19,000

Locker Rents 600 600
Sundry Income 1,600 1,060
Refreshment Account — 16,000
(iii) Other revenue expenditure and actual payments:

Particulars Revenue Income Actual Payments
Rs. Rs.
Land (cost Rs. 10,000) — 10,000
Furniture (cost Rs. 1,46,000) — 1,30,000
Salaries 5,000 4,800
Maintenance of Playgrounds 2,000 1,000
Rent 8,000 8,000
Refreshment Account — 8,000
Donations to the extent of Rs. 25,000 were utilised for the purchase of Library Books, balance was still
unutilised. In order to keep it safe, 9% Govt. Bonds of Rs. 1,60,000 were purchased on 31.3.2018.
Remaining amount was put in the Bank on 31.3.2018 under the term deposit. Depreciation at 10% p.a.
was to be provided for the whole year on Furniture and Library Books.

To Donation for Building By Purchase of Land 10,000
& Library Room 2,00,000 By Purchase of Furniture 1,30,000
To Entrance Fees 17,000 By Salaries 4,800
To Subscription 19,000 By Maintenance of Play grounds 1,000
To Locker Rents 600 By Rent 8,000
To Sundry Income 1,060 By Refreshment Payments 8,000
To Refreshment Receipts 16,000 By Library Books 25,000
To Balance c/d [Bank overdraft] 1,08,140 By 9% Govt Bonds 1,60,000
By Term Deposit with Bank 15,000
3,61,800 3,61,800

INCOME & EXPENDITURE ACCOUNT

To Salaries [ Rs. 4,800 + l 200] 5,000 By Entrance Fees 17,000
To Maintenance of playgrounds 2,000 By Subscription [ Rs. 19,000 + Rs. 1,000] 20,000
To Rent 8,000 By Locker Rents 600
To Depreciation on Furniture 14,600 By Sundry Income [ Rs. 1,060 + Rs. 540] 1,600
To Depreciation on Library Books 2,500 By Profit on Refreshment A/c
To Surplus t/f to Capital fund 15,100 Receipts 16,000
Less: Expenses 8,000 8,000
47,200 47,200

Capital Fund: Fixed Assets:
Surplus 15,100 Land 10,000
Add: Trans, from Library F. 25,000 40,100 Furniture Cost 1,46,000
Building & Library Fund: Less: Depreciation 14,600 1,31,400
Donation Received 2,00,000 Library books cost 25,000
Less: utilized and Less: Depreciation 2,500 22,500
t/f Capital Fund 25,000 1,75,000 Investments:
Supplier of Furniture 16,000 9% Govt. Bonds (Face
Outstanding Salary 200 Value Rs. 1,60,000) 1,60,000
Outstanding Maintenance Term Deposit with bank 15,000
of Playgrounds 1,000 Current Assets:
Bank Overdraft 1,08,140 Outstanding Subscription 1,000
Accused Sundry Income 540
3,40,440 3,40,440
Q8> Summary of Receipts and Payments of Bombay Medical Aid Society for the year ended 31 st March,
2018 are as follows:
Opening Cash balance in hand Rs. 8,000, Subscription Rs. 50,000, donation Rs. 15,000. Interest on
Investments @ 9% p.a. Rs. 9,000, Payments for medicine supply Rs. 30,000, Honorarium to Doctors Rs.

10,000, Salaries Rs. 28,000 sundry Expenses Rs. 1,000, Equipment purchase Rs. 15,000, Charity show
expenses Rs. 1,500, Charity show collections. Rs. 12,500.
Additional informations:

Subscription due 1,500 2,200
Subscription received in advance 1,200 700
Stock of medicine 10,000 15,000
Amount due for medicine supply 9,000 13,000
Value of equipment 21,000 30,000
Value of building 50,000 48,000
Required: Prepare Receipts and Payments Account and Income and Expenditure Account for the year
ended 31st March, 2018 and Balance Sheet as on 31st March, 2018.

To Cash in hand (Opening) 8,000 By Medicine supply 30,000
To Subscription 50,000 By Honorarium to doctors 10,000
To Donation 15,000 9,000 By Salaries 28,000
To Interest on investments 12,500 By Sundry expenses 1,000
To Charity show collections By Purchase of Equipment 15,000
By Charity show expenses 1,500
By Cash in hand (closing) 9,000
94,500 94,500
INCOME AND EXPENDITURE ACCOUNT

To Medicine consumed 29,000 By Subscription 51,200
To Honorarium to doctors 10,000 By Donation 15,000
To Salaries 28,000 By Interest on investments 9,000
To Sundry expenses 1,000 By Profit on charity show:
To Depreciation on: Show collections 12,500
Equipment 6,000 Show expenses 1,500 11,000
Building 2,000 8,000

To Surplus-Excess of Income
Over Expenditure 10,200
86,200 86,200
BALANCE SHEET
Capital Fund: Building 50,000
Opening Balance 1,80,300 Less: Depreciation 2,000 48,000
Add: surplus 10,200 1,90,500 Equipment 21,000
Subscription received in advance 700 Add: Purchase 15,000
Amount due for medicine supply 13,000 36,000
Stock of medicine 15,000
Investments 1,00,000
Subscription receivable 2,200
Cash in hand 9,000
2,04,200 2,04,200
Working Notes:
Dr. (I) SUBSCRIPTION ACCOUNT Cr.

To Outstanding Subscription A/c (beg.) 1,500 By Advance Subscription A/c (beg.) 1,200
To Income & Expenditure A/c 51,200 By Bank A/c 50,000
To Advance Subscription A/c 700 By Outstanding Subscription A/c (end) 2,200
53,400 53,400
Dr. (II) CREDITORS FOR MEDICINES ACCOUNT Cr.
To Bank A/c 30,000 By Balance b/d 9,000
To Balance c/d 13,000 By Credit Purchases 34,000
43,000 43,000
Dr. (Ill) STOCK OF MEDICINES ACCOUNT Cr.
To Balance b/d 10,000 By Income & Expenditure A/c 29,000
To Purchases 34,000 By Balance c/d 15,000
44,000 44,000

Dr (IV) EQUIPMENT ACCOUNT Cr.

To Balance b/d 21,000 By Depreciation A/c 6,000
To Bank A/c (Purchases) 15,000 By Balance c/d 30,000
36,000 36,000
(V) BALANCE SHEET OF MEDICAL AID SOCIETY

Capital fund (balancing figure) 1,80,300 Building 50,000
Subscription received in advance 1,200 Equipment 21,000
Amount due for medicine supply 9,000 Stock of medicine 10,000
Investments 1,00,000
Subscription receivable 1,500
Cash in hand 8,000
1,90,500 1,90,500
Note: Donation has been credited directly to the income and expenditure account assuming that
donation is of revenue nature. Alternatively, donation may be treated as of capital nature and thus, be
credited to capital fund
Q9> Following is the Income and Expenditure Account of Victoria Club for the year ending 31st March, 2018:

To Salaries & Wages 19,000 By Subscription 30,000
To Misc. Expenses By Entrance Fees received 1,000
(including Insurance) 2,000 By Annual Sports Income
To Audit fees 1,000 Receipts 6,000
To Chief Executives’ Honorarium 4,000 Less: Expenses 3,000 3,000
To Printing & Stationery 1,800
To Annual day
Celebration Exp. 6,000
Less: Donation 4,000 2,000
To Interest on Bank loan 600
To Dep. on Sports Equipment 1,200

To Excess of Income over Expen. 2,400

34,000 34,000
Additional Information:

Rs. Rs.
(i) Subscription outstanding 2,400 3,000
(ii) Subscription received in advance 1,800 1,080
(iii) Salaries outstanding 1,600 1,800
(iv) Sports equipment (after deducting depreciation) 10,400 10,800
(v) Prepaid Insurance — 240
(vi) Cash in Hand 5,560 6,400
(vi) The Club owned a Sports’ ground of Rs. 40,000
(vii) The Club took a loan of Rs. 8,000 from a bank during the year 2016-2017, which was not paid in
2017-2018.
(viii) Audit fee of 2017-2018 was outstanding, but Audit fees of Rs. 800 for 2016-2017 was paid in
2017-2018.
Prepare Receipts and Payments Account for the year ending 31 st March, 2018 and a Balance Sheet on
that date.
Sol: VICTORIA CLUB

RECEIPT AND PAYMENT ACCOUNT
To Balance b/d 5,560 By Salaries & wages
To Donation for Annual Day 4,000 for current year 19,000
To Subscription + O/s into beg. 1,600
for current year 30,000 - O/s at the end 1,800 18,800
+ O/s in the beg. 2,400 By Misc. expenses
- O/s at the end 3,000 for current year 2,000
+ Advance at the end 1,080 + Prepaid at the end 240 2,240
- Advance in the beg. 1,800 28,680 By Audit fees for current year 1,000

To Entrance fees 1,000 + O/s in the beg. 800

To Annual sports receipts 6,000 - O/s at the end 1,000 800
By Chief Executive’s Honorarium 4,000
By Printing & Stationery 1,800
By Annual Day Expenses 6,000
By Interest on Bank Loan 600
By Annual Sport Expenses 3,000
By Sports Equipment 1,600
By Balance c/d 6,400
45,240 45,240

Capital fund: Sports Ground 40,000
Opening Balance 46,160 Sports equipment
Add: Surplus 2,400 48,560 Opening balance 10,400
Loan from Bank 8,000 Add: Addition 1,600
Subscription received in advance 1,080 Less: Depreciation 1,200 10,800
Salaries outstanding 1,800 Subscription Outstanding 3,000
Audit fees outstanding 1,000 Prepaid Insurance 240
Cash 6,400
60,440 60,440
Working Notes:
Dr. (I) SPORTS EQUIPMENT ACCOUNT Cr.

To Cash A/c (b/f) 1,600 By Balance b/d 10,800
12,000 12,000
(II) OPENING BALANCE SHEET AS AT 31.3.2017

Loan from Bank 8,000 Sports ground 40,000
Subscription received in advance 1,800 Sports equipment 10,400
Salaries outstanding 1,600 Subscription outstanding 2,400
Audit fees o/s 800 Cash 5,560

Capital fund (b/f) 46,160

58,360 58,360
Q10> The Income & Expenditure Account of City Sports Club for year ended 31st March, 2018 was as follows:

To Salaries 1,20,000 By Subscriptions 1,60,000
To Printing and Stationery 6,000 By Entrance Fees 10,000
To Rent 12,000 By Contribution for Annual dinner 20,000
To Repairs 10,000 By Profit on Annual Sports meet 20,000
To Sundry Expenses 8,000
To Annual Dinner Expenses 30,000
To Interest to Bank 6,000
To Depreciation of Sports equipment 6,000
To Surplurs 12,000
2,10,000 2,10,000
The above account had been prepared after the following adjustments:
Particulars Rs.
Subscriptions outstanding in the beg. 12,000
Subscriptions received in advance in the beg. 9,000
Subscriptions received in advance at the end. 5,400
Subscriptions outstanding at the end. 15,000
Salaries outstanding at the beginning and at the end of the financial year were Rs. 8,000 and Rs. 10,000
respectively. Sundry expenses included prepaid insurance expenses of Rs. 1,200.
The Club owned a freehold ground valued Rs. 2,00,000. The Club has sports equipment on 01.04.2008
valued at Rs. 52,000. At the end of the year, after depreciation, the sports equipment amounted to Rs.
54,000. The Club raised a loan of Rs. 40,000 from a bank on 01.01.2017, which was unpaid till
31.03.2018. On 31.03.2018, cash in hand was Rs. 32,000.
Required: Prepare Receipts and Payments account of the Club for the year ended 31st March, 2018

and Balance Sheet as on that date.
Sol: RECEIPT AND PAYMENTS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2018
Receipts (Rs. ) Payments (Rs. )
To Balance b/d (Bal. Fig.) 27,800 By Salaries:
To Subscription: for 2016-2017 8,000
for 2016-2017 12,000 for 2017-2018 1,10,000
for 2017-2018 1,36,000 By Printing & Stationery 6,000
for 2018-2019 5,400 By Rend 12,000
To Entrance Fees 10,000 By Repairs 10,000
To Contribution for Annual Dinner 20,000 By Sundry Expenses (8,000 + 1,200) 9,200
To Profit on Annual Sports Meet 20,000 By Annual Dinner Expenses 30,000
By Interest to Bank 6,000
By Sports Equipment 8,000
By Balance c/d 32,000
2,31,200 2,31,200

Liabilities (Rs. ) (Rs. ) Assets (Rs. ) (Rs. )
Capital Fund 2,34,800 Freehold Ground 2,00,000
Add: Surplus 12,000 2,46,800 Sports Equipment 52,000
Bank Loan 40,000 Add: Additions 8,000
Outstanding Salaries 10,000 60,000
Subscription in Advance 5,400 Less: Depreciation (6,000) 54,000
Subscription in Arrear 15,000
Prepaid Insurance 1,200
Cash in Hand 32,000
3,02,200 3,02,200
Working Notes:
(1) BALANCE SHEET AS AT 31st MARCH, 2017
Capital Fund (Bal. Fig.) 2,34,800 Freehold Ground 2,00,000
Bank Loan 40,000 Sports Equipment 52,000
Outstanding Salaries 8,000 Subscription in Arrear 12,000
Subscription in Advance 9,000 Cash in hand 27,800
2,91,800 2,91,800

Dr. (II) SPORTS EQUIPMENT ACCOUNT Cr.

To Bank A/c 8,000 By Balance c/d 54,000
60,000 60,000
Dr. (Ill) SUBSCRIPTION ACCOUNT Cr.

Particulars Particulars Rs.
To Income & Exp. A/c 1,60,000 By Advance Subscription A/c 9,000
By Bank A/c 1,36,000
By O/s Subscription A/c 15,000
1,60,000 1,60,000
Q11> The Receipts and Payments account of Trustwell Club prepared on 31st March, 2018 is as follows:
RECEIPTS AND PAYMENTS ACCOUNT

To Balance b/d 450 By Expenses (including
To Annual Income from Subscription Payment for sports material Rs. 2,700) 6,300
Add: Outstanding of 4,590 By Loss on Sale of Furniture
last year received this year 180 (cost price Rs. 450) 180
4,770 By Balance c/d 90,450
Less: Prepaid of last year 90 4,680
To Other fees 1,800
96,930 96,930
Additional Information:
Trustwell club had balances as on 1.4.2017:
Furniture Rs. 1,800; Investment at 5% Rs. 27,000; Sports material Rs. 6,660; Balance as on 31.3.2018:
Subscription Receivable Rs. 270; Subscription received in advance Rs. 90; Stock of sports material Rs.
1,800.

Do you agree with above Receipts and Payments account? If not, prepare correct Receipts and Payments
account and Income and Expenditure account for the year ended 31st March, 2018 and Balance Sheet
on that date.
Sol: CORRECTED RECEIPTS AND PAYMENTS ACCOUNT OF TRUSTWELL CLUB

To Balance b/d 450 By Expenses (Rs. 6,300 - Rs. 2,700) 3,600
To Subscription By Sports Material 2,700
Annual Income 4,590 By Balance c/d 90,720
Less: Receivable at end 270 (Cash in Hand and at Bank)
Add: Advance at end 90
Add: Receivable at the end 180
Less: Advance received at end 90 4,500
To Other fees 1,800
To Sale of Furniture 270
97,020 97,020
INCOME AND EXPENDITURE ACCOUNT OF TRUSTWELL CLUB

Dr for the year ended 31st March, 2018 Cr.
To Sundry Expenses 3,600 By Subscription 4,590
To Sports Material By Other fees 1,800
Balance as on 1.4.2018 6,660 By Interest on investment 1,350
Add: Purchases 2,700 (5% on Rs. 27,000)
Less: Balance as on By Deficit: Excess of
31.3.2018 (1,800) 7,560 Expenditure over Income 3,600
To Loss on Sale of Furniture 180
11,340 11,340

BALANCE SHEET OF TRUSTWELL CLUB

Liabilities Rs. Assets
Capital Fund 36,000 Furniture 1,800 1,350
Less: Excess of Expenditure over Less: Sold 5% Investment (450) 27,000
Income (3,600) 32,400
Building Fund 90,000 Interest Accrued on 1,350
Subscription Received in Advance 90 Investment 1,800
Sports Material Subscription Receivable 270
Cash in Hand and at Bank 90,720
1,22,490 1,22,490
Working Note:
BALANCE SHEET OF TRUSTWELL CLUB AS ON 1ST APRIL, 2017
Subscription Received in Advance Capital Fund 90 Furniture 1,800
(Balancing Figure) 36,000 Investment 27,000
Sports Material 6,660
Subscription Receivable 180
Cash in Hand and at Bank 450
36,090 36,090
Q12> You are provided with the following:

The Receipts and Payment Account for the year ended on 31st March, 2018

You are required to prepare Income and Expenditure account for the year ended 31st March, 2018 and a
Balance Sheet as at 31st March, 2018 (Workings should form part of your answer).
Sol: INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2018
BALANCE SHEET AS ON 31ST MARCH, 2018
Note: Entrance fees have been capitalized in the above solution.
Q13> From the following information supplied by M.B.S. Club, prepare Receipts and Payments account and
Income and Expenditure Account for the year ended 31st March 2019.

Subscription for the year amount to Rs 3,00,000/-. Salaries paid Rs 60,000. Face value of the
Investment was Rs 1,75,000, 50% of the Investment was sold at 80% of Face Value. Interest on
investments was received Rs 14,000. Furniture was sold for Rs .8000 at the beginning of the year.
Machinery and Sports Goods purchased and put to use at the last date of the year. Charge depreciation
@ 15% p.a. on Machinery and Sports goods and @10% p.a. on Furniture.
Following Expenses were made during the year:
Sports Expenses: Rs 50,000
Rent: Rs 24,000 out of which Rs 2,000 outstanding
Misc. Expenses: Rs 5,000
ANS. Receipts and Payments Account for the year ended 31-03-2019

Income and Expenditure account for the year ended 31-03-2019
Working Notes:
1. Calculation of Subscription received during the year 2018-19
2. Calculation of Sale price and profit on sale of investment
Face value of investment sold: Rs 1,75,000 × 50% = Rs 87,500
Sales price: Rs 87,500 × 80% = Rs 70,000
Cost price of investment sold: Rs 1,40,000 × 50% = Rs 70,000
Profit/loss on sale of investment: Rs 70,000 - Rs 70,000 = NIL

3. Loss on sale of furniture
4. Depreciation
5. Interest accrued on investment
Note: It is assumed that the sale of investment has taken place at the end of the year.
Q14> From the following Income and Expenditure account and the Balance sheet of a club, prepare its
Receipts and Payments Account and subscription account for the year ended 31st March, 2019:
Income & Expenditure Account for the year 2018-19

Balance sheet as at 31st March 2019
The following adjustments have been made in the above accounts:
(i) Upkeep of ground Rs 660 and printing Rs 264 relating to 2017-18 were paid in 2018-19.
(ii) One fourth of entrance fee has been capitalized by transfer to General Fund.
(iii) Subscription outstanding in 2017-18 was Rs 880 and for 2018-19 Rs 770.
(iv) Subscription received in advance in 2017-18 was Rs 220 and in 2018-19 for 2019-20 was Rs 110.
(v) Furniture was purchased during the year.
SOL.: Receipts and Payments Account

for the year ending 31st March, 2019

Note:
Rs660 paid for upkeep of ground for 2017-18 and Rs264 paid for printing have been added to the
amount shown as expenditure for the year to arrive at total payment under these heads.
Subscription Account

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NAHTA PROFESSIONAL CLASSES M:8878819888 / 8518819888

NOT FOR PROFIT ORGANISATION

ICAI RTP Questions ICAI Past Questions TOTAL Questions

9.1 |Page FACULTY:CA PRATIK NAHTA

9.2 |Page FACULTY:CA PRATIK NAHTA

ADJUSTMENT NO 1 : FUND BASED ACCOUNTING

3. Interest Received from

9.3 |Page FACULTY:CA PRATIK NAHTA

9.4 |Page FACULTY:CA PRATIK NAHTA

Lets DANGAL with ICAI RTP QUESTIONS

QUESTION 1 MAY 2018

Expenditure Rs. Rs. Income Rs.

9.5 |Page FACULTY:CA PRATIK NAHTA

To Electric charges 7,200 By Entrance fee (25% of 7,500

To Postage and 5,000

To Telephone 5,000 By Membership 2,00,000

To Rent 88,000 subscription 10,000 1,90,000

Add: Outstanding 4,000 92,000 Less: Received in

To Salaries 66,000 By Sale proceeds of old 1,500

Add: Outstanding 3,000 69,000

To Depreciation By Hire of lecture hall 20,000

Electrical fittings 15,000 Interest on securities 8,000

Furniture 5,000 Add: Receivable 500 8,500

Books 46,000 66,000 By Deficit- excess of 16,700

Balance Sheet of Smith Library Society

Liabilities Rs. Rs. Asset Rs. Rs.

Capital fund 7,93,000 Electrical fittings 1,50,000

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Membership Securities 1,90,500

Cash in hand 11,300

QUESTION 2 NOV 2018

(2) Subscription received during the year Rs. 3,75,000

Add: Subscription receivable on 31.3.2018 16,500

Sports material consumed during the year end 31.3.2018

Add: Purchase of sports material during the year 2,55,000

QUESTION 3 MAY 2019

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Corrected Receipts and Payments Account of Trust well Club

Receipts Amount Payments Amount

To Balance b/d 450 By Expenses 3,600

To Subscription By Sports Material 2,700

Less: Receivable as on 31.3.2018 270 By Balance c/d 90,720

Add: Receivable as on31.3.2017 180

Less: Advance received as on 90 4,500

To Other Fees 1,800

To Donation for Building 90,000

To Sale of Furniture 270

Income and Expenditure Account of Trustwell club

QUESTION 4 NOV 2019

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Balance Sheet as at 31st Dec., 2019

QUESTION 5 MAY 2020

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Balance Sheet as on 31st March, 2019

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Let’s DANGAL with ICAI PAST EXAMS QUESTIONS