Income and Expenditure Account of A TK Club for the year ended 31st December 2020

Income
Subscriptions received - Rs. 1,20,000
Donations received - Rs. 50,000
Interest received - Rs. 8,000
Total Income - Rs. 1,78,000

Expenditure
Rent paid - Rs. 30,000
Electricity and water charges - Rs. 12,000
Salaries paid - Rs. 60,000
Printing and stationery - Rs. 5,000
Cost of refreshments - Rs. 18,000
Office equipment purchased - Rs. 25,000
Total Expenditure - Rs. 1,50,000

Additional Information
Outstanding rent as on 31st December 2020 - Rs. 5,000
Salaries due but not paid as on 31st December 2020 - Rs. 2,000
Donations received in advance but not earned as on 31st December 2020 - Rs. 10,000

Solution:

Receipts and Payments Account of A TK Club for the year ended 31st December 2020

Receipts
Subscriptions received - Rs. 1,20,000
Donations received - Rs. 50,000
Interest received - Rs. 8,000
Total Receipts - Rs. 1,78,000

Payments
Rent paid - Rs. 30,000
Electricity and water charges - Rs. 12,000
Salaries paid - Rs. 60,000
Printing and stationery - Rs. 5,000
Cost of refreshments - Rs. 18,000
Office equipment purchased - Rs. 25,000
Total Payments - Rs. 1,50,000

Outstanding Payments
Rent outstanding as on 31st December 2020 - Rs. 5,000
Salaries due but not paid as on 31st December 2020 - Rs. 2,000
Total Outstanding Payments - Rs. 7,000

Adjustments
Add: Donations received in advance but not earned as on 31st December 2020 - Rs. 10,000
Less: Rent outstanding as on 31st December 2020 - Rs. 5,000
Net Adjustments - Rs. 5,000

Closing Balance
Balance as on 31st December 2020 - Rs. 26,000 (Rs. 1,78,000 - Rs. 1,50,000 - Rs. 7,000 + Rs. 5,000)

Explanation:

The receipts and payments account is a summary of all cash transactions of the club during the year. It is based on the actual receipts and payments made during the year, unlike the income and expenditure account, which is based on accrual accounting.

The receipts and payments account for A TK Club for the year ended 31st December 2020 is prepared as follows:

Receipts:
The total receipts of the club during the year are Rs. 1,78,000. This includes subscriptions received, donations received, and interest received.

Payments:
The total payments made by the club during the year are Rs. 1,50,000. This includes rent paid, electricity and water charges, salaries paid,