Chapter Notes - Not-for-Profit Organisations - Accountancy, Class 11 | EduRev Notes

Accountancy Class 11

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NOT - FOR- PROFIT ORGANISATIONS

IMPORTANT POINTS

Learning Objectives After studying this lesson you will be able to

  • State the meaning of Not-for-profit organizations :
  • Explain the various items of accounting in Not-for-profit organizations
  • Explain about the Financial Statements of Not-for-profit organization.
  • Show the According Treatment of various items of accounting in Not for profit organizations.

Teaching Methods

  • Teachers are advised to use various examples of Not-for-profit organizations.
  • Story telling method can also be used for various items of Not- for-profit organization.

Meaning of Not-for-profit organisation The primary motive of Not-for-profit organization is to render services to their members to promote culture, art, education and other religious, social and charitable activities. Main sources of their Income are Subscription, Donation, Aid by Govt.

Example of not-for organization : Hospitals, dispesaries, sports clubs, recreation clubs, temples, dharamshalas, orphanage school and College etc.

Such organization prepare following financial statement at the end of accounting period:

1. Receipts and Payments Account
 2. Income and Expenditure Account 

3. Balance Sheet Receipts and Payments Account :-This account is Merely summary of the transaction appearings in the cash book. All receipts are shown on its debit side and all payments are shown on its credit side.

Features of Receipts and Payment Account. 

1. It is a real account. Thus Receipts are shown on its debit side and payments on the credit side.

2. Excess receipt over payment is the closing of cash which is shown in Balance sheet on asset side.

3. This account begins with the opening balance of cash or bank.

4. An item may be repeated many times in a cash book, but it is shown once in 'Receipts and Payment Account'.

5. All cash payments are shown on its credit side irrespective of the fact whether these are of capital nature or of revenue nature and whether they relate to current year, previous or next year. 6. Receipt and payment Account records only the actual receipt and payment of cash. Non Cash expense such as Depreciation, outstanding exp. etc. are not shown in it.

Income and Expenditure Account Income and Expenditure Account serves the same purpose for a Not- for-profit organization as the profit and Loss Account for a business enterprise. This account is a nominal account.
It is also based on accrual concept of accounting, according to which every transactions belong to current year should be recorded in the books in the current financial year whether payment made or not and Income received or not.

Features of Income and Expenditure Account:

1. It is a nominal account.
2. No capital iteam is entered in the account.
3. Its debit side includes all the expenses pertaining to the particular period and credit side includes all the income pertaining to the same period i.e revenue items are recorded in it.
4. This account is prepared in the same manner in which a profit and loss A/C is prepared.
5. Credit balance is called "Excess of Income over Expenditure' (or Surplus) and debit balance is called "Excess of Expenditure over Income", (or Deficit) Important items of Not for Profit Organizations

1. Legacy: Legacy represents the amount of property received by organisation under a will on death of the contributor. In other words we can say that legacies are the donations made by a person in his will, so their donation are called legacy.

2. Entrance Fees : Entrance fee is called admission fee. It is a fee paid by members at the time of joining a Not-for-profit organization.
(i) It is an item of recurring nature.
(ii) Generally Entrance fees are treated as Income.

3. Grant: Grant is an aid issued by any Govt, agency to any Not-for- profit organization for specific purpose or general purpose. Specific Grant should be capitalized & General grant may be treated as Revenue Income and shown in Income & Expenditure A/C

4. Donation : Donation is the amount received by Not-for-profit Organization from any person or institution without any consideration and not periodically.

Types of Donation

Category

Explanation

Tretment

General

Donation

If donation received for not a specific purpose and can be utilized for any purpose, is Known as general donation.

Revenue

Receipt

Specific

Donation

If donation received for a particular purpose and can be used/spent for the same purpose only it is Known as specific donation such as Donation for Building.

Capital

Receipt

 

5. Subscription : Subscription is the amount payable by members of Not-for-profit Organization for renewal of membership periodically.
(i) It is recurring in nature.
(ii) It is treated as Revenue Receipt.

6. Life Membership fee : Life membership fee is the fee received from those members who do not pay periodic fee or subscription but pay a lump sum amount to become life time members. It can be shown by adding it to capital fund or separately on the liabilities side of Balance sheet.

7. Honorarium : Honorarium is an amount paid to a person (other than employee) for rendering some special services for Not-for- profit organization. It is treated as an expenses of Not-for-profit organization.

1. Calculation of Subscription to be shown in the Income and Expenditure Account for current year. 

(a) Statement of Actual amount of subscription for the current year.

 

Explanation

Detail

Amount

Subscription received during the year

———

———

Add:- Outstanding Subscription (End or Current year)

———

 

Prepaid or advance (Beg. Or previous year)

 

———

Less:- Outstanding Subscription (Beg. or previous year) Prepaid or Advance (End or current year)

Amount of subscription to be shown in Income & Exp. NC

 

(b) Preparing ledger Account.

 

Particular

Amount

Particular

Amount

To Bal. b/d (Outstanding Subscription at the Beginning)

xxxx

By. Bal. b/d (Prepaid Subscription at the Beginning)

XXXX

To income & Expenditure A/C
(Balancing Figure)

xxxx

 

By Receipts & Payment A/C

xxxx

 

 

By. Bal. c/d (Outstanding subscription at the end)

xxxx

To Bal. c/d (Prepaid Subscription at the end)

xxxx

 

 

 

xxxx

 

xxxx

 

(c) Calculation of consumption of consumable items (stationary) (A consumable item) to be shown in income and expenditure A/C

 

Explanation

Detail

Amount

Amount paid to creditor for stationary during current year Add:- Opening Stock of stationary

Closing Creditors of Stationary

Prepaid or advance (Beg. Or previous year)

Less:- Closing Stock of stationary

Opening Creditors of stationary

Prepaid or Advance (End or current year)

Amount of subscription to be shown in Income & Exp. A/C

 

 

 

Illustration 1: From the following extracts of the Receipt and Payments

Account and the additional information, you are required to compute the Income from subscription for the year ended March 31,2015 and show it in the Income are Expenditure Account for the year ended on March 31,2015,

Receipts & Payments A/C for the Year ended on 31 st march 2015

Chapter Notes - Not-for-Profit Organisations - Accountancy, Class 11 | EduRev Notes

Additional information
                                                March 31,2015 March 31,2014

Subscription Outstanding            15,000 8,000

Subscription Paid in advance      5,000 3,000

Solution : 

Statement of Actual amount of subscription for the current year.

 

Explanation

Detail

Amount

Subscription received during the year

 

50,000

Add:- Outstanding Subscription (End or Current year)

15,000

 

Prepaid or advance (Bag. Or previous year)

3,000

18,000

 

 

68,000

Less:- Outstanding Subscription (8tg or previous year)

8,000

 

Prepaid or Advance (End or current year)

5,000

13,000

Amount of subscription to be shown in Income & Exp. AJC

 

55,000

 

By preparing ledger Account 

Subscription A/C

 

Particular

Amount

Particular

Amount

To Bal, h/d (Outstanding) Subscription at the Beginning

8,000

By. Bal. b/d (Prepaid Subscription at the Beginning)

3,000

To Income & Expenditure A/C

55,000

By Receipts & Payment A/C

50,000

(Balancing Figure)

 

By, Bal. c/d (Outstanding subscription at the end)

15,000

To Bal, c/d (Prepaid Subscription at the end)

5.000

 

 

 

68000

 

68000

 

Illustration 2: Receipts & payments A/C of star Young Club disclosed that it received Rs. 1,50,000 by way of subscription during the year ended on March 31,2015.

Additional information

Amount

Subscription Outstanding as on 01-04-2014

5,000

(Out of which Rs, 3,500 were received in -2014-15)

 

Subscription received in advance on 31-03-2014

3,000

Subscription received in advance on 31-03-2015

4,100

 

Show how the subscription will appear in Income & Expenditure A/C for the year ending March 31,2015 and Balance sheet as at 1.4.14 and 31.3.15 in each of the following alternative cases :-

Case I Ifsubscription outstandingfor2014-15 is Rs6,400

Case II Ifsubscription outstanding as on 31-03-2015 is Rs. 6,400

An Extract of Income & Expenditure A/C For the year ended on March 31, 2016

 

Expenditure

Amount

Payments

Amount

 

 

By Subscription                              1,50,000

Add: Outststanding (End)               7,900

Prepaid (Beganning)                       3,000

 

 

 

 

 

 

1,51,800

                                                        1,60,900

Less: Outstanding (Beginning)          5,000 Prepaid (end)                                   4,100

 

Outstanding as on 31-03-2014 (Previous year)

5000

Received during the year

3500

Still outstanding as on 31*3-2015

1500

Outstanding for the current year (2014-15)

6400

Outstanding as on 31-03-2015

7900

 

Case: II
Income & Expenditure A/C For the year ended on March 31, 2015

 

Expenditure

Amount

Payments

Amount

 

 

By Subscription                          1,50,000

Outstanding (End)                         6,400

Prepaid (Beginning)                     3,000

                                                           1,59,900

Less; Outstanding (Beginning)            5,000
Prepaid (end)                                        4,100

 

 

 

 

1,50,300

 

In Both, Case / and Case II An Extract of Balance Sheet as at 1st April 2014

 

Liabilities

(Rs)

Assets

(Rs)

Sub received in advance

3,000

Sub. o/s

5,000

 

Case / An Extract of Balance Sheet as at 31st March 2015

 

Liabilities

(Rs)

Assets

(Rs)

Sub received in advance

4,100

Sub.o/s fcr 2013-14

(5,000-3,000)  =1500

Sub o/s for 2014-15 = 6400

 

7,900

 

Case II An Extract of Balance Sheet as at 31 st March 2015

 

Liabilities

(Rs)

Assets

(Rs)

Sub received in advance

4,100

Sub, o/c as 04, 31,3,15

6,400



Illustration 3: Subscription received during the year ended March 31, 2015 Himalayas sports club were as under:-

 

Rs

2013-14

5,000

2014-15

90,000

2015-16

2,500

 

97,500

 

The club has 500 members each paying @ Rs 200 as annual subscription . Subscription outstanding as on March 31,2014 were Rs. 9,500 Calculate the amount of subscription to be shown in the Income & Expenditure A/C for the year ended on March 31,2015 and Balance sheet as at 3113| 14 and 3113| 15.

Solution: An Extract of Income & Expenditure account of Himalayas sports club for the year ended 31st March 2015

 

Expenditure

Amount

Income

Amount

 

 

Sub. received for 14-15                 90,000

Add ofe for 14-15                            10,000

(1,00,000-90,000)= 10,000)

 

10,0000

 

An Extract sheet of Himalayan sports club as at 31st March 2014

 

Liabilities

(Rs)

Assets

(Rs)

 

 

Sub. o/s

9,500

 

An Extract sheet of Himalayan sports club as at 31st March 2015

 

Liabilities

(Rs)

Assets

(Rs)

Sub received in advance

2,500

Sub. o/s for 13-14   4,500

o/s 14-15            10,000

 

14,500

 

Note: In this question members are given so the amount to be shown is always equal to the amount members has to pay in any one year i.e. 500X200 = 1,00,000

Calculating of Outstanding as on 31-03-2015 (end) 500x200=1,00,000 90,000

Amount received during the year (2014-15)

90,000

Outstanding for the current year (2014-15)

10,000

Outstanding as on 31 -03-2014 (Previous year)

9,500

received during the year

5,000

Still outstanding as on 31 -03-2015

4,500

Outstanding for the current year (2014-15)

10,000

Still Outstanding as on 31 -03-2015

4,500

Outstanding as on 31 -03-2015

14,500

 

Illustration 04: On the basis of the following information. Calculate the amount of stationery to be debited to Income and expenditure A/c for the year ended on March 31,2015.

 

Amount(Rs)

Stock Stationary On April 1,2014

6,000

Creditors for stationary on April 1,2014

4,000

Amount Paid to Creditors for Stationary during 20104-15

21,600

Stock for stationary on March 31,2015

1,000

Creditors for stationary on March 31.2015

3,600

 

Solution

Calculation of Stationary to be shown in and expenditure A/C

Particulars

Detail

Amount

Amount paid on April 1,2014

 

21,600

Add: Opening Stock of stationery

6,000

 

Closing Creditors for Stationary

3,600

9,600

Less: Closing Stock of stationary

4,000

31,200

Opening Creditors for stationary

1,000

5,000

Amount of subscription to be shown in Income & Exp. A/c

 

36,200

 


Illustration 5: On the basis of the Information given below, calculate the amount of stationary to be shown in the 'Income and Expenditure Account' of'Rohan Literacy Society'for the year ended March 31,2015.

 

Apr, 1. 2014

Mar, 31,2015

 

Rs

Rs

Stock of Stationary

4,000

3,000

Creditors tor stationary

4,500

5,500

 

Stationary purchased during the year ended 3113| 15 was ? 23,500

Solution:- Calculation of Stationary to be shown in income and expenditure A/C.__

 

Particulars

Detail

Amount

Stationary Purchased during the year

Add:- Opening Stock of stationary

Less:- Closing Stock of Stationary

Amount of subscription to be shown in Income & Exp. A/C

 

23.500

4.000

3.000

24.500

 

Important Point: Creditors for stationary is not considered because 'Stationary purchased during the year' is given and not 'Amount paid to Creditors during the year'.

Illustration 6: From the following information of Arnav Sports Club, show the Sports Material, in the 'Income and Expenditure Account' for on March 31,2014 and March 31,2015.

 

Apr, 1,2014

Mar, 31.2015

 

Rs

Rs

Stock of Stationary

4,800

13,200

Creditors for stationary

11,500

15,800

Advance to supplier of sports material

30,000

50,000

 

Payment to suppliers for the Sports Material during 2014-2015 was Rs, 1.85,000. No Sports material purchased on cash basis during the year 2014-15.

Solution : An Extract Balance sheet as at 01st April 2014 Arnav Sports Club

 

Liabilities

Amount

Assets

Amount

Sub received in advance

1,500

Advance to suppliers

Sock of Sports Materiel

30,000

4,800

 

Calculation of Stationary to be shown in income and expenditure A/C of Arnav Sports club

 

Particulars

Detail

Amount

Amount paid to supplier for sports Material during year

 

1,85,000

Add:- Opening Stock of stationary

4,800

 

Closing Creditors of Stationary

15,800

 

Prepaid or advance (Beg. Or previous year)

30,000

50,600

 

 

2,35,600

Less Closing Stock of stationary

13,200

 

Opening Creditors of Stationary

11,500

 

Prepaid or Advance {End or current year)

50,000

74,700

Amount of sports Material to be shown in income & Exp. A/C

 

1,60,900

 

Balance Sheet as at 3113|2015

Liabilities

Amount

Assets

Amount

Creditors

15,800

Advance to suppliers

Sock of Sports Material

50,000

13,200

 

Illustration: From the following information, Show the salaries items in the Income and Expenditure Account for the Year ended 31 March 2016 and in the Balance sheet as at 31st March 2015 and 31 March 2016 of Rohan Charitable Hospital Delhi

An Extract of Recipient payments Account of Rohan for the year ending 31 March 2016

 

Receipts

(Rs)

Payments

(Rs)

 

 

By Salaries

7,50,000

 

Additional Information

                                         31.03.2015 31.03.16
Salaries Outstanding       200,000 2,50,000
Salary paid in advance   1,00,000 3,00,000

Solution : An Extract of Income & Expenditure of Rohan Charitable Hospital for the year ended 31 March 2016

Expenditure

Rs

Incomes

Rs

To Safaries                     7.50,000

+o/s as on 31.03,16        250,000

 

 

 

 

 

 

 

 

6,00,000

 

 

                                        10,00,000

+ Advance as on 31.3.15  1,00,000

                                        11,00,000

- o/s as an 31.03.15         2,00,000

                                         9.00,000

-Advance as on 31.3.16    3,00,000

 

An Extract of Balance Sheet of Rohan charitable Hos pital as at 31 March 2015

 

Liabilities

Rs

Assets

Rs

Salary o/s

2,00,000

Salary Paid in Advance

10,0,000

 

An Extract of Balancesheet of Rohan charitable Hospital as at 31 March 2015

Liabilities

Rs

Assets

Rs

Salary o/s

2,00,000

Salary Paid in Advance

3,00,000

 

Illustration: Calculate the amount of sports material to be shown to the Income and Expenditure Account and Balance Sheet of Sachin Tendulkar Sports club Delhi:

1|04|15 3113|16

Stock of sports materials 5,00,000 7,50,000

Creditors for sports materials 2,00,000 3,50,000

Amount paid for sports material ? 5,00,000 during the year 15-16

Solution:

 An Extract of I & E A/c of Sachin Tendulkar Sports Club for the year ended 31.03.16

 

Expenditure

Rs

Incomes

Rs

To Sports material Stock

consumed

 

 

 

 

Stock on t.04.15

Add Amt Paid

5,00,000

5,00,000

 

 

 

 

10,00,000

 

 

 

Less creditors on

 

 

 

 

1.04.15

(20,0000)

 

 

 

Add creditors on

8,00,000

 

 

 

31.3.16

3,50,000

 

 

 

Less Stock on 31,3,16

11,50,000

(750,000)

4,00,000

 

 

 

An Extract of Balance sheet of Sachin Tendulkar Sports Club as at 1st April 2015

 

Liabilities

Rs

Assets

Rs

Creditors for sports Material

2,00,000

Stock of Sports Material

5,00,000

 

An Extract of Balance sheet of Sachin Tendulkar Sports Club as at 1st April 2015

 

liabilities

Rs

Assets

Rs

Creditors for sports Material

3,50,000

Stock of Sports Material

7,50,000

 

Illustration: From the following information show the consumption of medicine in Income & Expenditure Account for the Year ended 31 March 2016 and in the Balance Sheet as at 31st March 2015 and 31st March 2016 of Aditya Hospital Delhi.

31/03/15 31/03/16
Stock of medicines 20,00,000 13,00,000
Creditors for medicines 10,00,000 25,00,000

Advance paid for Medicines 15,00,000 22,00,000 Amount for medicines, 50,00,000 during the year 2015-16.

Solution: An Extract of I & E A/C of Aditya Hospital Delhi year ending 31 March 2016

 

Expenditure

Rs

Incomes

Rs

To medicine consumed

Stock as on 31/3/15                                    20,00,000

+ Amit paid for medicine                              30,00,000
                                                                      70,00,000 

-creditors as on 31/3/15                              (10,00,000)
                                                                     60,00,000

+ creditor as on 31/3/16                             250,00,000
                                                                   35,00,000

+ Advance paid as on 31 /3/15                    15,00,000

                                                                    1,00,00,000

Advance paid as on 31/3/16                         22,00,000
                                                                      78,00,000

- Stock as on 31/3/16                                    18,00,000

 

 

 

 

 

 

 

 

 

 

 

60,00,000

 

 

 

An Extract of Balance Sheet of Aditya Hospital Delhi as at 31 March 2015

Liabilities

Rs

Assets

Rs

Creditors for sports Material

10,00,000

Stock Medicine

Advance paid for Medicine

20,00,000

15,00,000

 

An Extract of Balance Sheet of Aditya Hospital Delhi as at 31 March 2016

Liabilities

Rs

Assets

Rs

Creditors for sports Material

2,50,000

Stock of Medicine

Advance paid tor Medicine

18,00,000

22,00,000

 

Illustration 7: Following is the Receipts and payments Accounts of women club for the year ended March 31,2015 Prepare the Income and Expenditure A/C for the year ended on March 31, 2015 and also the ba ance sheet as at the date:

Receipts

Amount

Payments

Amount

To Balance b/d

To Entrance Fees

To Subscriptions

To Donations

To interest

To Profit from Entertainment

28,260

11,040

44,000

21,220

820

1,640

By Rent & Taxes

By Salaries

By Electricity Charges

By General Expenses

By Books

By office Expenses

By Investments

By Balance c/d

17220

18,800

840

2,500

6,240

9.000

28.000

24,380

1,06,980

106980

 

Additional Information
(i) In the beginning of the year, the club had books worth Rs. 60,000 and Furniture worth Rs 11,600
(ii) Subscription in arrears on April 1,2014 were Rs, 1,200 and on March 31,2015 Rs, 1,400
(iii) Write off Rs. 1,000 as depreciation on Furniture and Rs. 6,000 on Books.
(iv) On March 31, 2015 Salaries Rs. 3,000 and Electricity Charges Rs. 4,000 were outstanding.

Solution
 Balance Sheet as at 01 st April 2014

 

Liabilities

Amount

Assets

Amount

Capital Fund (Bal. Fig)

1,01,060

Cash

Subscription Outstanding

Books

Furniture

28,260

1,200

60,000

11,600

1,01,060

1,01,060

 

Income & Expenditure A/C For the year ended on March 31, 2015

 

Expenditure

Amount

Payments

Amount

To Rent & Taxes

 

17,220

By Subscription

44,000

 

To Salases

18,800

 

Add: Ou!standing(End}

1,400

 

Add: Outstanding

3,000

21,800

45.400

 

 

To Electricity Charges

840

 

 

 

 

 

 

 

Less: Outstanding

1,240

44,200

Add: Outstanding

400

1,240

(Beginning)

 

 

To General Expenses

 

2,500

By Entrance Fees

 

11,040

To offree Expenses

 

9,000

By Donations

 

21,220

 

 

 

By Interest

 

820

To Depreciation on:

 

 

By profit from

 

1,640

Books

6,000

7,000

Entaitansnent

 

 

Furniture

1.000

20,160

 

 

 

To Surplus

 

78,920

 

 

78,920

 

Balance sheet as at 31st March 2015

 

Liabilities

 

Amount

Assets

 

Amount

Capital Fund

1,01,060

 

Cash

 

24,380

Add: Surplus

20,160

1,21,220

Subscription

 

1,400

 

 

 

Outstanding

 

 

Salaries Outstanding

 

3,000

Books

60,000

 

Electricity charges

 

400

Add: Addition

6,240

 

Outstanding

 

 

 

66,240

 

 

 

 

Less: Depreciation

6,000

60,240

 

 

 

Furniture

11,600

 

 

 

 

Less: Depreciation

Investments

1,000

10,600

28,000

 

 

1,24,620

 

 

1,24,620

 

Illustration 8: The following is the Receipts and Payments Account' of Yashoda Hospital for the year ended on March 31, 2015. You are required to prepare 'Income and Expenditure Account' for the year ended on March 31,2015 and 'Balance Sheet' as on that date.

Receipts

Amount

Payments

Amount

To Balance b/d

17,000

By Payment for Medicines

66000

To Grant

40,000

By Salaries

54,000

To Subscription

96,000

By Fees to Doctors

48,000

To Donations

30,000

By General Expenses

2,400

To Proceeds from Charily Show

24,000

By Equipments

30,000

To Interest on Investment

18,000

By Charity Show Expenses

6,000

@ 9% p.a. for 1 year

 

By Balance c/d

16,600

 

2,25,000

 

225000

 

Receipt & Payment A/C

 

Other information:-

April t, 2014

March 31,2015

(i) Subscriptions in Arrears

1,000

2,000

(ii) Subscription

3,000

2,500

(iii) Stock of Medicines

22,000

25,000

(tv) Amount due to supplier medicines

14,000

23,000

(v) Value of Equipment

54,000

68,000

(vi) Value of Building

1,36,000

1,28,000

 

Income & Expenditure A/C ofYashodas Hospital For the Year ended on March 31, 2015

 

Expenditure

Amount

Income

Amount

To Fees to Doctors

 

48,000

By Subscription

96,000

 

To Salaries

 

54,000

Add: Outstsnding

2,000

 

To Medicines66,000 (End)  
Aad: Opening Stock22,000    

 

 

 

Prepaid (Beginning)

3,000

 

Closing Creditors

23,000

 

 

 

 

 

1 it non

 

 

 

 

Less: Closing Stock

25,000

 

Less; Prepaid (end)

1,01,000

 

Opening Creditors

14,000

72,000

Outstanding

2,500

 

To Sundry Expenses

 

2,400

(Beginning)

1,000

97,500

To Charity Show Exp

 

8,000

By Grant in Ad

 

40,000

To Deprecation on :

 

 

By Donations

 

30,000

Equipments

16,000

 

By Interests

 

18,000

Building

6,000

24,000

By Proceeds from

 

24,000

To Surplus

 

1,100

Charity Show+

 

 

 

 

2,09,600

 

 

2,09,500

 

Note : Calculation of Depreciation 

Depreciation = Opening Bal. + Addition - Closing Bal.

Equipments = 54,000 + 30,000 - 68,000 = 16,000 

Building = 1,36,000 - 1,28,000 = 8,000

Balance Sheet of Yashoda Hospital as at 31st March 2015

 

Liabilities

Amount

Assets

Amount

Creditors for Medicines

 

23,000

Cash

16,000

Prepaid Subscriptions

 

2,500

Subscription Outstanding

2,000

Capital Fund

4.13,000

 

Investments

2,00,000

Add: Surplus

1,100

4,14,100

Equipment

68,000

 

 

 

Building

1,28,000

 

 

 

Stock of Medicines

25,000

 

 

4,39,600

 

4,39,600

 

Balance Sheet of Yashoda Hospital as at 01st April 2014

 

Liabilities

Amount

Assets

Amount

Creditors for Medicines

14,000

Cash

17,000

Prepaid Subscriptions

3,000

Subscription Outstanding

1,000

Capital Fund (Bal. Fig)

4,13,000

Investments

2,00,000

 

 

Equipment

54,000

 

 

Building

1,36,000

 

 

Stock of Medicines

22,000

 

4,30,000

 

4,30,000

 

Important points : Interest on Investments is given in the question but value of Investment is not shown in 'Receipts and Payments Account',. It means this investment was purchased before the current year and was mentioned in the Balance Sheet at the beginning of the year. Therefore the value of the investments calculated as under.
Value o f Investm ent = Chapter Notes - Not-for-Profit Organisations - Accountancy, Class 11 | EduRev Notes =  2,00,000

Illustration 9: From the following information related to Amar Nath Charitable Society, prepare Income and Expenditure Account for the year ended March 31, 2015.

Receipts & Payment A/C

 

Receipts

Amount

Payments

Amount

To Balance b/d

To Sale of old New paper

To Subscriptions

To Donations

To Rent received

To Interest on Investment

4,400

600

56.000

34.000

24.000

4,600

By Investments

By Salaries

By Miscellaneous Exp,

By Telephone Charges

By Furniture

By Printing & Stationery

By Fax Macines

By Balance c/d

30.000

29.000

400

25,800

6.000

600

12,000

19,600

1,23,600

1,23,600

 

Additional Information : Subscription received includes Rs. 1,200 for 2015-16 The amount of subscription on March 31,2015 Rs. Rs. 1,000; Salaries unpaid for the year 2014-15 Rs, 1,400; 60% of the Donations are to be capitalized. Rent receivable as on 31-02-2015 is Rs 400.
Solution:

Income & Expenditure A/C of Amarnath Charitable Society For the year ended on March 31, 2015

 

Expoidiiure

 

Amount

Inoomo

 

Amount

To Pnnting & Stationary

To Salaries

Amt : Outstanding

29.000

1,400

800

By Sub&Criplfcjfl

Add: Outstanding (End)

66,000

1rD0O

 

30,400

Leas: Prepaid (end)

By Rent Received

57,000

1,200

 

To Teie phone Charges

To Miss. Expenses

 

25.000

55,800

 

400

Add Outstanding I'Encf)

24,000

 

 

 

 

By Donations (aDti)

400

2:4,400

13,600

 

 

 

By Inte/esta on

 

 

 

 

Investments

 

4800

 

 

 

By Seln of OW Newspaper

 

600

To Surplus

 

41,600

 

 

 

 

 

99,000

 

 

99,000

 

Important Points : Only 60% Donation is to be Capitalised as clear instruction is given in Question, Remaining 40% Donation is to be treated as income.

EXERCISE
 Q.No-1 
A club has 1,000 members each paying subscription @ Rs. 50. Total subscription received during the year 2014-15 is Rs. 97,000 including Rs. 23,000 for the year 2013-14 & Rs 24,000 for the year 2015-16, 25 members paid their subscription for 2014-15 in the year 2013-14.

Show the amount of subscription in Income & Expenditure A/C for the year ended 31 st March 2015 and in the Balance Sheet as at that date.

Q.No-2 On the basis of the information given below calculate the amount of medicines to be debited to the 'Income and Expenditure A/c" of Perfect Health Club for the year ended on 31-03-2015.

 

April 1s, 2014

March 31s,2015

Stock of Machines

Creditors for Medicines

1,70,000

15,06,900

1,34,650

18,20,700

 

Medicines purchased during the year ended 31-03-2015 were Rs. 65,80,700.

Q.No-3 Subscription received during the year ended March 31,2015 by Allahabad Arts Club were as under:

Year

Amount (Rs.)

2013-14

5,000

2014-15

1,08,000

2015-16

3,000

 

1,16,000

 

Additional Information:

Total number of Members = 240

Annual Subscription Fee = Rs. 500

Subscription Outstanding as on 01-04-2014 Rs. 9,000

Show the amount of Subscription in Income & Expenditure A/C for the year ended 31st March 2015 and in the Balance Sheet as at that date.

Q.No-4 Following is the Receipt and Payment Account of Tulsi Literary Society for the ended March 31, 2015, Prepare Income and Expenditure Account forthe Year March, 31,2015

Receipt & Payment A/C for the year ended 31.3.2015

Receipts

Amount

Payments

Amount

To Balance b/d

65,000

By Honorarium to Cashier

4,000

To Sale of old New paper

30,000

By Stationary

1,000

To Subscriptions

14,000

By Books

6,000

To Sale of Old Newspaper

1,000

By Telephone Charges

2,400

To Locker Rent

1,400

By Computer

90,000

To Entrance Fees

10,000

By Repairs

2,000

 

 

By Wages

5,000

 

 

By Balance c/d

11,000

 

1,21,400

 

121,400

 

Additional Information:- On 1st April 2014 Subscription outstanding were Rs. 1200 & Subscription as on 31-03-2015 is Rs. 1400. Creditors for Stationary as on 30-03-2014 were Rs. 400 & the same as on 31-03- 2015 is Rs. 800, Bills outstanding for repairs on March 31, 2015 were 2200 & Wages outstanding were Rs. 1000. 75% of the Entrance Fees is to be Capitalized Depreciation is to be provided on computers @ 25% p.a. And books @ 10% p.a.

Q. No.:5 From the following receipts & Payments Account of Sonic Club & from the given additional information: Prepare Income & Expenditure Account for the year ending 31st March 2015 & the Balance Sheet as on that date:

Receipt & Payment A/C

 

Receipts

Amount

Payments

Amount

To Balance b;d

To Subscriptions

To Interest of Investments

@ 8% p.a. for full year

1.90.000

6.60.000

40,000

By Salaries

By Sports Equipment

By Balance c/d

3,30,000

400000

160000

8,90,000

8,90,000

 

Additional Information

(i) The club received Rs. 20,000 for subscription in 2014-15 for 2015-16.
(ii) Salaries had been paid only for 11 months.
(iii) Stock of Sports Equipment on 31st March 2014 was Rs. 3,00,000 & on 31 st March, 2015 Rs. 6,50,000.

Q. No.6: From the following Receipts and Payment o/c of Gopi Kalari club for the year ended 31st March 2016 and the Information supplied, Prepare Income and Expenditure Account for the year ended 31st March 2016 and the Balance Sheet as at that date:

Receipt and Payment o/c of Gopi Kalra Club for the year ended 31st March 2016

 

Receipts

Rs

Payments

Rs

To Balance b/d

2.00,000

By Salaries

1,00,000

To Subscription

 

By Entertainment Exp,

20,000

2014-15

5,000

By Electric Changes

20,000

2015-16

2,50,000

By General Expenses

10,000

2016-17

10,000

By Miscellaneous Exp.

10,000

To Entertainment Receipts

50,000

By Investment

1,00,000

To sale of oW Furniture

8,000

(@ 10% Purchased re 1.1.16)

 

(Costing 710,006)

 

By Printing & Stationary

30,000

To Sales of Newspapers

2,000

By News Papers

10,000

 

 

By Furniture

50,000

 

 

By Balance c/d

1,75.000

 

5.25,000

 

5,25,000

 

1) The club has 300 members each paying an annual subscription of Rs. 1000. Subscription o/s in year 2014-15 were 7000 and 10 members had not paid their subscription for 2015-16 as well.
2) Salaries includes 10,000 for the year 2014-15 and 20,000 for the year 2015-17 and Chapter Notes - Not-for-Profit Organisations - Accountancy, Class 11 | EduRev Notes 15,000 are stills o/s for the year 2015-16.
3) Opening stock of stationary 10,000 and closing stock of stationary 15.000.
4) On 1.4.15 the club owned office and Ground value of at Rs. 10.00. 000, furniture valued 2,00,000 and car of Rs. 3,00,000.
5) Give any two values involved in above Question.

Q. No.7: Following is the receipt and payment A/C of Era Dance Acadamy Delhi for the year ended 31st March 2016. Who owned a Dance theater valued 10,00,000, furniture 2,00,000 and Dance equipments Chapter Notes - Not-for-Profit Organisations - Accountancy, Class 11 | EduRev Notes 3,00,000 Dance competition fund 2,00,000

Receipt and Payment o/c of Era Dance Academy Delhi

 

Receipts

Rs

Payments

Rs

Balance b/d

50,000

Dance Compitition Exp

3,00,000

Subscription

 

Salaries

1,00,000

2014-15

10,000

General Expenses

9,000

2015-16

1,00,000

Misculleneous Exp

4,000

2016-17

20,000

Newspaper

1,000

Compitition receipts

2,00,000

Electric Charges

3,000

Govt. Grant for compitition

1,00,000

Dance Equipments

20,000

Govt Grant

50,000

Furniture

10,000

Interest on Investment

 

Water Expenses

2,000

(@ 10% p.a, for 9 months)

9,000

Advertisement Exp

10,000

 

 

Balance c/d

80.000

 

3,39,000

 

5.39000

 

1) Subscription for the year 2014-15 of Rs. 10,000 and for the year 2015-16 of Rs. 20,000 are still in arrear, subscription of Rs. 10,000 in 2014-15 were received in advance for 2015-16 and Chapter Notes - Not-for-Profit Organisations - Accountancy, Class 11 | EduRev Notes 5000 for the year20016-17
                                                   2014-15    2015-16

2) General expenses o/s              2000       3000

General expenses Advance for  2015-16    2016-17
                                                      1000        4000

3) Any two values involved in the Question.

Q. No.8: How much amount will be shown in Income and Expenditure Account for the year ended 31st March 2016 and Balance Sheet as at 31 st March 2015 and 31 st March 2016.                        2014-15     2015-16
Stock of medicines              2,00,000     1,50,000

Creditors for medicines        50,000       2,50,000

Advance paid for Medicines 25,000      75,000

Amount paid during the year 2015-16 Chapter Notes - Not-for-Profit Organisations - Accountancy, Class 11 | EduRev Notes 300,000/-

Q. No.9: Show the following information in appropriate Account and Balance Sheets.
                                   2014-15    2015-16    2016-17 
Subscription Received 50,000    5,00,000     20,000

Case'll Subscription o/s as on 31st March 2016 were Chapter Notes - Not-for-Profit Organisations - Accountancy, Class 11 | EduRev Notes 70,000 subscription received in advance as on 31st March 2015, Chapter Notes - Not-for-Profit Organisations - Accountancy, Class 11 | EduRev Notes25,000, includingChapter Notes - Not-for-Profit Organisations - Accountancy, Class 11 | EduRev Notes5,000 for 2016-17

Case 2: Subscription o/s for the year 2014-15 were Chapter Notes - Not-for-Profit Organisations - Accountancy, Class 11 | EduRev Notes 70,000 and for theyear2015-16 Chapter Notes - Not-for-Profit Organisations - Accountancy, Class 11 | EduRev Notes 50,000 Subscription received in advance in the year 2014-15 Chapter Notes - Not-for-Profit Organisations - Accountancy, Class 11 | EduRev Notes 25000 for the year 2016-17.

Q. No.10: Show the following Information in appropriate Accounts and Balance Sheets.
Amount paid for Salary during the year 2015-16Chapter Notes - Not-for-Profit Organisations - Accountancy, Class 11 | EduRev Notes 2,50,000.

 

2014-15

2015-16

Salary still to be pay

5,000

20,000

Salary paid in advance

10,000

30,000

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