Show how you will deal with the following items while preparing the ba...
**Preparing the Balance Sheet of a Club:**
To prepare the balance sheet of a club as at 31st March 2018, we need to consider various items including the Sports Fund, Sports Fund Investments, Interest Received on Sports Fund Investments, Donations for Sports Fund, Sports Prizes Awarded, and Expenses on Sports Events. Let's analyze and deal with each of these items in detail:
**1. Sports Fund:**
The Sports Fund represents the amount of money set aside for sports-related activities within the club. To include this item in the balance sheet, we need to record it as an asset.
**Assets**
- Sports Fund: Rs 500,000
**2. Sports Fund Investments:**
The Sports Fund Investments refer to the investments made using the Sports Fund. These investments are typically made to generate additional income for the club. As the investments were made on 1st April 2017, we need to account for any interest earned during the year.
**Assets**
- Sports Fund: Rs 500,000
- Sports Fund Investments: Rs 500,000
**3. Interest Received on Sports Fund Investments:**
The interest received on the Sports Fund Investments represents the income generated from these investments. This income needs to be added to the Sports Fund Investments and included in the balance sheet as an asset.
**Assets**
- Sports Fund: Rs 500,000
- Sports Fund Investments: Rs 500,000
- Interest Receivable on Sports Fund Investments: Rs 37,500
**4. Donations for Sports Fund:**
Donations received for the Sports Fund are considered as income for the club. This income needs to be added to the Sports Fund and included in the balance sheet as an asset.
**Assets**
- Sports Fund: Rs 620,000
- Sports Fund Investments: Rs 500,000
- Interest Receivable on Sports Fund Investments: Rs 37,500
**5. Sports Prizes Awarded:**
Sports Prizes Awarded represents the expenses incurred by the club in awarding prizes for sports events. This expense needs to be deducted from the Sports Fund and included in the balance sheet as a liability.
**Assets**
- Sports Fund: Rs 520,000
- Sports Fund Investments: Rs 500,000
- Interest Receivable on Sports Fund Investments: Rs 37,500
**Liabilities**
- Sports Prizes Awarded: Rs 100,000
**6. Expenses on Sports Events:**
Expenses on Sports Events represent the costs incurred by the club in organizing various sports events. These expenses need to be deducted from the Sports Fund and included in the balance sheet as a liability.
**Assets**
- Sports Fund: Rs 505,000
- Sports Fund Investments: Rs 500,000
- Interest Receivable on Sports Fund Investments: Rs 37,500
**Liabilities**
- Sports Prizes Awarded: Rs 100,000
- Expenses on Sports Events: Rs 15,000
In conclusion, to prepare the balance sheet of the club as at 31st March 2018, we need to consider the Sports Fund, Sports Fund Investments, Interest Received on Sports Fund Investments, Donations for Sports Fund, Sports Prizes Awarded, and Expenses on Sports Events. By properly accounting for these items, we can accurately present the financial position of the club.
Show how you will deal with the following items while preparing the ba...
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