Illustrations - Not For Profit Organisations Notes | Study Crash Course of Accountancy - Class 12 - Commerce

Commerce: Illustrations - Not For Profit Organisations Notes | Study Crash Course of Accountancy - Class 12 - Commerce

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 Page 1


 
     
 
Add: Creditors at the End  
Add: Advance to Creditors in the Beginning ... 
Add: Opening Stock  
Less: Closing Stock  
Goods Consumed During the Year (to be shown in the Income and Expenditure Account)  
 
Ex- 
Calculate the amount that will be posted to the Income and Expenditure Account for the year ended 31
st
 December, 2014, 
if: Stock of Stationery on 1
st
 January, 2014 - Rs. 300. Creditors for Stationery on 1
st
 January, 2014 - Rs. 120. Amount paid for 
Stationery during the year 2014 - Rs. 600. Stock of Stationery on 31
st
 December, 2014 - Rs. 140. 
Solution  
Income and Expenditure Account for the year ended 31
s1
 December, 2014 
Expenditure Amt.(Rs.) Income Amt.(Rs.) 
To Stationery    
Amount Paid for Stationery 600    
Less: Opening Creditors for Stationery 120    
Add: Opening Stock of Stationery 300    
Less: Closing Stock of Stationery 140 640   
 
Whenever, the opening and closing stock of consumable goods (Say, Sports Material) is given along with opening and closing 
creditors, then: 
• First of all, Account of Creditors of Sports Material is made to ascertain value of "Purchase of Sports Material"; and 
• Then, Account of Sports Material is made to ascertain "Value of Sports Material Consumed" during the year, i.e. to ascertain 
value of Sports Material to be debited to Income and Expenditure Account. 
 
Illustration 1 
Calculate the amount that will be posted to the Income and Expenditure Account for the year ended 31
st
 December, 2014, 
if:  
Stock of Stationery on 1
st
 January, 2014 - Rs. 300.  
Creditors for Stationery on 1
st
 January, 2014 - Rs. 120.  
Amount paid for Stationery during the year 2014 - Rs. 600.  
Stock of Stationery on 31
st
 December, 2014 - Rs. 140. 
Solution: 
Income and Expenditure Account 
Expenditure Amt.(Rs.) Income Amt.(Rs.) 
To Stationery    
Amount Paid for Stationery 600    
Less: Opening Creditors for Stationery 120    
Add: Opening Stock of Stationery 300    
Less: Closing Stock of Stationery 140 640   
 
Illustration 2 
From the following information, calculate the amount of sports material to be debited to the Income and Expenditure 
Account of a Sport Club for the year ended 31
st
 March, 2015. 
Particulars Amt.(Rs.) 
Balance of Sports Material as on 1
st
 April, 2014 20,000 
Balance of Sports Material as on 31
8f
 March, 2015 15,000 
Creditors for Sports Material as on 1
st
 April, 2014 40,000 
Creditors for Sports Material as on 31
8t
 March, 2015 45,000 
Payment made to Creditors for Sports Material during the year ended 31
st
 March, 2015 2,00,000 
 
Solution: 
Income and Expenditure Account 
Expenditure  Amt.(Rs.) Income Amt. (Rs.) 
To Sports Material A/c     
Amount Paid to Creditors for Sports 
Material 
2,00,000    
Page 2


 
     
 
Add: Creditors at the End  
Add: Advance to Creditors in the Beginning ... 
Add: Opening Stock  
Less: Closing Stock  
Goods Consumed During the Year (to be shown in the Income and Expenditure Account)  
 
Ex- 
Calculate the amount that will be posted to the Income and Expenditure Account for the year ended 31
st
 December, 2014, 
if: Stock of Stationery on 1
st
 January, 2014 - Rs. 300. Creditors for Stationery on 1
st
 January, 2014 - Rs. 120. Amount paid for 
Stationery during the year 2014 - Rs. 600. Stock of Stationery on 31
st
 December, 2014 - Rs. 140. 
Solution  
Income and Expenditure Account for the year ended 31
s1
 December, 2014 
Expenditure Amt.(Rs.) Income Amt.(Rs.) 
To Stationery    
Amount Paid for Stationery 600    
Less: Opening Creditors for Stationery 120    
Add: Opening Stock of Stationery 300    
Less: Closing Stock of Stationery 140 640   
 
Whenever, the opening and closing stock of consumable goods (Say, Sports Material) is given along with opening and closing 
creditors, then: 
• First of all, Account of Creditors of Sports Material is made to ascertain value of "Purchase of Sports Material"; and 
• Then, Account of Sports Material is made to ascertain "Value of Sports Material Consumed" during the year, i.e. to ascertain 
value of Sports Material to be debited to Income and Expenditure Account. 
 
Illustration 1 
Calculate the amount that will be posted to the Income and Expenditure Account for the year ended 31
st
 December, 2014, 
if:  
Stock of Stationery on 1
st
 January, 2014 - Rs. 300.  
Creditors for Stationery on 1
st
 January, 2014 - Rs. 120.  
Amount paid for Stationery during the year 2014 - Rs. 600.  
Stock of Stationery on 31
st
 December, 2014 - Rs. 140. 
Solution: 
Income and Expenditure Account 
Expenditure Amt.(Rs.) Income Amt.(Rs.) 
To Stationery    
Amount Paid for Stationery 600    
Less: Opening Creditors for Stationery 120    
Add: Opening Stock of Stationery 300    
Less: Closing Stock of Stationery 140 640   
 
Illustration 2 
From the following information, calculate the amount of sports material to be debited to the Income and Expenditure 
Account of a Sport Club for the year ended 31
st
 March, 2015. 
Particulars Amt.(Rs.) 
Balance of Sports Material as on 1
st
 April, 2014 20,000 
Balance of Sports Material as on 31
8f
 March, 2015 15,000 
Creditors for Sports Material as on 1
st
 April, 2014 40,000 
Creditors for Sports Material as on 31
8t
 March, 2015 45,000 
Payment made to Creditors for Sports Material during the year ended 31
st
 March, 2015 2,00,000 
 
Solution: 
Income and Expenditure Account 
Expenditure  Amt.(Rs.) Income Amt. (Rs.) 
To Sports Material A/c     
Amount Paid to Creditors for Sports 
Material 
2,00,000    
 
     
 
Add: Opening Stock of Sports Material 20,000    
Add: Closing Creditors for Sports Material 45,000    
Less: Closing Stock of Sports Material 15,000    
Less: Opening Creditors for Sports Material 40,000 2,10,000   
 
Or 
CREDITORS FOR SPORTS MATERIAL ACCOUNT 
Particulars Amt.(Rs.) Particulars Amt.(Rs.) 
To Bank A/c (Payment made during the 
year) 
2,00,000 By Balance b/d (Opening Creditors) 40,000 
To Balance c/d (Closing Creditors) 45,000 By Sports Material A/c (Bal Fig.: 
Purchase) 
2,05,000 
 2,45,000  2,45,000 
 
SPORTS MATERIAL ACCOUNT 
Particulars Amt.(Rs.) Particulars Amt.(Rs.) 
To Balance b/d (Opening Sports 
Material) 
20,000 By Income and Expenditure A/c 0F: Used 
up) 
2,10,000 
To Creditors for Sports Material A/c 
(Purchase) 
2,05,000 By Balance c/d (Closing Sports Material) 15,000 
 2,25,000  2,25,000 
Sports Material to be debited to Income and Expenditure Account = Rs. 2,10,000 
 
Illustration 3. 
On the basis of information given below, calculate the amount of medicines to be debited to the Income and Expenditure 
Account of Family Care Hospital for the year ended 31
st
 March, 2014. Also, show the relevant figures in the Balance Sheets 
as at 31.03.13 and 31.03.14. 
Particulars 01.04.13 (Rs.) 31.03.14 (Rs.) 
Stock of Medicines 10,000 8,000 
Creditors for Medicines 42,000 53,000 
Amount paid to creditors during the year ended 31.3.14 were Rs. 80,000. 
Solution: 
 CREDITORS FOR MEDICINES ACCOUNT 
Particulars Amt. 
(Rs.) 
Particulars Amt. (Rs.) 
To Bank A/c (Payment made during the 
year) 
80,000 By Balance b/d (Opening Creditors) 42,000 
To Balance c/d (Closing Creditors) 53,000 By Sports Material A/c (Bal. Fig.: 
Purchase) 
91,000 
 1,33,000  1,33,000 
 
MEDICINES ACCOUNT 
Particulars Amt. 
(Rs.) 
Particulars Amt. (Rs.) 
To Balance b/d (Opening Stock of 
Medicines) 
10,000 By Income and Expenditure A/c (B/F: 
Used up) 
93,000 
To Creditors for Medicines A/c 
(Purchase) 
91,000 By Balance c/d (Closing Stock of 
Medicines) 
8,000 
 1.01,000  1,01,000 
Amount of Medicines to be debited to the Income and Expenditure Account = Rs. 93,000 
An Extract of Balance Sheet as at 31
s
' March, 2013 
Liabilities Amt.(Rs.) Assets Amt. (Rs.) 
Creditors for Medicine 42,000 Stock of Medicines (Opening Stock) 10,000 
An Extract of Balance Sheet as at 31
s
' March, 2014 
Liabilities Amt. (Rs.) Assets Amt. (Rs.) 
Creditors for Medicine 53,000 J Stock of Medicines (Closing Stock) 8,000 
Page 3


 
     
 
Add: Creditors at the End  
Add: Advance to Creditors in the Beginning ... 
Add: Opening Stock  
Less: Closing Stock  
Goods Consumed During the Year (to be shown in the Income and Expenditure Account)  
 
Ex- 
Calculate the amount that will be posted to the Income and Expenditure Account for the year ended 31
st
 December, 2014, 
if: Stock of Stationery on 1
st
 January, 2014 - Rs. 300. Creditors for Stationery on 1
st
 January, 2014 - Rs. 120. Amount paid for 
Stationery during the year 2014 - Rs. 600. Stock of Stationery on 31
st
 December, 2014 - Rs. 140. 
Solution  
Income and Expenditure Account for the year ended 31
s1
 December, 2014 
Expenditure Amt.(Rs.) Income Amt.(Rs.) 
To Stationery    
Amount Paid for Stationery 600    
Less: Opening Creditors for Stationery 120    
Add: Opening Stock of Stationery 300    
Less: Closing Stock of Stationery 140 640   
 
Whenever, the opening and closing stock of consumable goods (Say, Sports Material) is given along with opening and closing 
creditors, then: 
• First of all, Account of Creditors of Sports Material is made to ascertain value of "Purchase of Sports Material"; and 
• Then, Account of Sports Material is made to ascertain "Value of Sports Material Consumed" during the year, i.e. to ascertain 
value of Sports Material to be debited to Income and Expenditure Account. 
 
Illustration 1 
Calculate the amount that will be posted to the Income and Expenditure Account for the year ended 31
st
 December, 2014, 
if:  
Stock of Stationery on 1
st
 January, 2014 - Rs. 300.  
Creditors for Stationery on 1
st
 January, 2014 - Rs. 120.  
Amount paid for Stationery during the year 2014 - Rs. 600.  
Stock of Stationery on 31
st
 December, 2014 - Rs. 140. 
Solution: 
Income and Expenditure Account 
Expenditure Amt.(Rs.) Income Amt.(Rs.) 
To Stationery    
Amount Paid for Stationery 600    
Less: Opening Creditors for Stationery 120    
Add: Opening Stock of Stationery 300    
Less: Closing Stock of Stationery 140 640   
 
Illustration 2 
From the following information, calculate the amount of sports material to be debited to the Income and Expenditure 
Account of a Sport Club for the year ended 31
st
 March, 2015. 
Particulars Amt.(Rs.) 
Balance of Sports Material as on 1
st
 April, 2014 20,000 
Balance of Sports Material as on 31
8f
 March, 2015 15,000 
Creditors for Sports Material as on 1
st
 April, 2014 40,000 
Creditors for Sports Material as on 31
8t
 March, 2015 45,000 
Payment made to Creditors for Sports Material during the year ended 31
st
 March, 2015 2,00,000 
 
Solution: 
Income and Expenditure Account 
Expenditure  Amt.(Rs.) Income Amt. (Rs.) 
To Sports Material A/c     
Amount Paid to Creditors for Sports 
Material 
2,00,000    
 
     
 
Add: Opening Stock of Sports Material 20,000    
Add: Closing Creditors for Sports Material 45,000    
Less: Closing Stock of Sports Material 15,000    
Less: Opening Creditors for Sports Material 40,000 2,10,000   
 
Or 
CREDITORS FOR SPORTS MATERIAL ACCOUNT 
Particulars Amt.(Rs.) Particulars Amt.(Rs.) 
To Bank A/c (Payment made during the 
year) 
2,00,000 By Balance b/d (Opening Creditors) 40,000 
To Balance c/d (Closing Creditors) 45,000 By Sports Material A/c (Bal Fig.: 
Purchase) 
2,05,000 
 2,45,000  2,45,000 
 
SPORTS MATERIAL ACCOUNT 
Particulars Amt.(Rs.) Particulars Amt.(Rs.) 
To Balance b/d (Opening Sports 
Material) 
20,000 By Income and Expenditure A/c 0F: Used 
up) 
2,10,000 
To Creditors for Sports Material A/c 
(Purchase) 
2,05,000 By Balance c/d (Closing Sports Material) 15,000 
 2,25,000  2,25,000 
Sports Material to be debited to Income and Expenditure Account = Rs. 2,10,000 
 
Illustration 3. 
On the basis of information given below, calculate the amount of medicines to be debited to the Income and Expenditure 
Account of Family Care Hospital for the year ended 31
st
 March, 2014. Also, show the relevant figures in the Balance Sheets 
as at 31.03.13 and 31.03.14. 
Particulars 01.04.13 (Rs.) 31.03.14 (Rs.) 
Stock of Medicines 10,000 8,000 
Creditors for Medicines 42,000 53,000 
Amount paid to creditors during the year ended 31.3.14 were Rs. 80,000. 
Solution: 
 CREDITORS FOR MEDICINES ACCOUNT 
Particulars Amt. 
(Rs.) 
Particulars Amt. (Rs.) 
To Bank A/c (Payment made during the 
year) 
80,000 By Balance b/d (Opening Creditors) 42,000 
To Balance c/d (Closing Creditors) 53,000 By Sports Material A/c (Bal. Fig.: 
Purchase) 
91,000 
 1,33,000  1,33,000 
 
MEDICINES ACCOUNT 
Particulars Amt. 
(Rs.) 
Particulars Amt. (Rs.) 
To Balance b/d (Opening Stock of 
Medicines) 
10,000 By Income and Expenditure A/c (B/F: 
Used up) 
93,000 
To Creditors for Medicines A/c 
(Purchase) 
91,000 By Balance c/d (Closing Stock of 
Medicines) 
8,000 
 1.01,000  1,01,000 
Amount of Medicines to be debited to the Income and Expenditure Account = Rs. 93,000 
An Extract of Balance Sheet as at 31
s
' March, 2013 
Liabilities Amt.(Rs.) Assets Amt. (Rs.) 
Creditors for Medicine 42,000 Stock of Medicines (Opening Stock) 10,000 
An Extract of Balance Sheet as at 31
s
' March, 2014 
Liabilities Amt. (Rs.) Assets Amt. (Rs.) 
Creditors for Medicine 53,000 J Stock of Medicines (Closing Stock) 8,000 
 
     
 
Illustration 4. 
How will you deal with the following items while preparing the Income and Expenditure Account for the ended year on 31
st
 
March, 2015 and a Balance Sheet as on that date? 
Particulars 01.04.14 (Rs.) 31.03.15 (Rs.) 
Amount due to Suppliers of Sports Material 14,000 8,000 
Advances to Suppliers of Sports Material 6,000 2,000 
Stock of Sports Material 18,000 3,000 
During 2014-15, the payment made to the Suppliers of Sports Material was Rs. 54,000. There was no cash purchase. 
 
Solution: 
SUPPLIERS OF SPORTS MATERIAL ACCOUNT 
Particulars Amt. 
(Rs.) 
Particulars Amt. 
(Rs.) 
To Balance b/d (Opening advance to 
Suppliers) 
6,000 By Balance b/d (Amount due to Suppliers 
in beg.) 
14,000 
To Bank A/c (Payment made during the 
year) 
54,000 By Sports Material A/c (Bal. Fig.: 
Purchase) 
52,000 
To Balance c/d (Amount due to Suppliers 
at end) 
8,000 By Balance c/d (Closing advance to 
Suppliers) 
2,000 
 68,000  68,000 
 
SPORTS MATERIAL ACCOUNT 
Particulars Amt. 
(Rs.) 
Particulars Amt. 
(Rs.) 
To Balance b/d (Opening Stock of Sports 
Material) 
18,000 By Income and Expenditure A/c (B/F: 
Used up) 
67,000 
To Creditors for Medicines A/c 
(Purchase) 
52,000 By Balance c/d (Closing Stock of Sports 
Material) 
3,000 
 70,000  70,000 
 
Amount of Sports Material to be debited to the Income and Expenditure Account =Rs. 67,000 
Income and Expenditure Account 
Expenditure Amt. 
(Rs.) 
Income Amt. (Rs.) 
To Sports Material A/c 67,000   
 
An Extract of Balance Sheet as at 31
st
 March, 2015 
Liabilities Amt. 
(Rs.) 
Assets Amt. (Rs.) 
Amount due to Suppliers of Sports 
Material 
8,000 Advances to Suppliers of Sports 
Material Sports Material (Closing 
Stock) 
2,000 
3,000 
 
Illustration 5. 
Calculate the amount that will appear against the item Stationery Account, in the Income and Expenditure Account for the 
year ended 31
st
 March, 2015: 
Particulars 01.04.14 
(Rs.) 
31.03.15 
(Rs.) 
Creditors for Stationery 3,000 12,000 
Stock of Stationery 14,000 40,000 
During 2014-15, the payment made to these creditors amounted to Rs. 60,000. Stationery purchased in cash during the 
year was 25°/. of the total purchase of Stationery. 
 
solution: 
CREDITORS FOR STATIONERY ACCOUNT 
Particulars Amt. 
(Rs.) 
Particulars Amt. 
(Rs.) 
Page 4


 
     
 
Add: Creditors at the End  
Add: Advance to Creditors in the Beginning ... 
Add: Opening Stock  
Less: Closing Stock  
Goods Consumed During the Year (to be shown in the Income and Expenditure Account)  
 
Ex- 
Calculate the amount that will be posted to the Income and Expenditure Account for the year ended 31
st
 December, 2014, 
if: Stock of Stationery on 1
st
 January, 2014 - Rs. 300. Creditors for Stationery on 1
st
 January, 2014 - Rs. 120. Amount paid for 
Stationery during the year 2014 - Rs. 600. Stock of Stationery on 31
st
 December, 2014 - Rs. 140. 
Solution  
Income and Expenditure Account for the year ended 31
s1
 December, 2014 
Expenditure Amt.(Rs.) Income Amt.(Rs.) 
To Stationery    
Amount Paid for Stationery 600    
Less: Opening Creditors for Stationery 120    
Add: Opening Stock of Stationery 300    
Less: Closing Stock of Stationery 140 640   
 
Whenever, the opening and closing stock of consumable goods (Say, Sports Material) is given along with opening and closing 
creditors, then: 
• First of all, Account of Creditors of Sports Material is made to ascertain value of "Purchase of Sports Material"; and 
• Then, Account of Sports Material is made to ascertain "Value of Sports Material Consumed" during the year, i.e. to ascertain 
value of Sports Material to be debited to Income and Expenditure Account. 
 
Illustration 1 
Calculate the amount that will be posted to the Income and Expenditure Account for the year ended 31
st
 December, 2014, 
if:  
Stock of Stationery on 1
st
 January, 2014 - Rs. 300.  
Creditors for Stationery on 1
st
 January, 2014 - Rs. 120.  
Amount paid for Stationery during the year 2014 - Rs. 600.  
Stock of Stationery on 31
st
 December, 2014 - Rs. 140. 
Solution: 
Income and Expenditure Account 
Expenditure Amt.(Rs.) Income Amt.(Rs.) 
To Stationery    
Amount Paid for Stationery 600    
Less: Opening Creditors for Stationery 120    
Add: Opening Stock of Stationery 300    
Less: Closing Stock of Stationery 140 640   
 
Illustration 2 
From the following information, calculate the amount of sports material to be debited to the Income and Expenditure 
Account of a Sport Club for the year ended 31
st
 March, 2015. 
Particulars Amt.(Rs.) 
Balance of Sports Material as on 1
st
 April, 2014 20,000 
Balance of Sports Material as on 31
8f
 March, 2015 15,000 
Creditors for Sports Material as on 1
st
 April, 2014 40,000 
Creditors for Sports Material as on 31
8t
 March, 2015 45,000 
Payment made to Creditors for Sports Material during the year ended 31
st
 March, 2015 2,00,000 
 
Solution: 
Income and Expenditure Account 
Expenditure  Amt.(Rs.) Income Amt. (Rs.) 
To Sports Material A/c     
Amount Paid to Creditors for Sports 
Material 
2,00,000    
 
     
 
Add: Opening Stock of Sports Material 20,000    
Add: Closing Creditors for Sports Material 45,000    
Less: Closing Stock of Sports Material 15,000    
Less: Opening Creditors for Sports Material 40,000 2,10,000   
 
Or 
CREDITORS FOR SPORTS MATERIAL ACCOUNT 
Particulars Amt.(Rs.) Particulars Amt.(Rs.) 
To Bank A/c (Payment made during the 
year) 
2,00,000 By Balance b/d (Opening Creditors) 40,000 
To Balance c/d (Closing Creditors) 45,000 By Sports Material A/c (Bal Fig.: 
Purchase) 
2,05,000 
 2,45,000  2,45,000 
 
SPORTS MATERIAL ACCOUNT 
Particulars Amt.(Rs.) Particulars Amt.(Rs.) 
To Balance b/d (Opening Sports 
Material) 
20,000 By Income and Expenditure A/c 0F: Used 
up) 
2,10,000 
To Creditors for Sports Material A/c 
(Purchase) 
2,05,000 By Balance c/d (Closing Sports Material) 15,000 
 2,25,000  2,25,000 
Sports Material to be debited to Income and Expenditure Account = Rs. 2,10,000 
 
Illustration 3. 
On the basis of information given below, calculate the amount of medicines to be debited to the Income and Expenditure 
Account of Family Care Hospital for the year ended 31
st
 March, 2014. Also, show the relevant figures in the Balance Sheets 
as at 31.03.13 and 31.03.14. 
Particulars 01.04.13 (Rs.) 31.03.14 (Rs.) 
Stock of Medicines 10,000 8,000 
Creditors for Medicines 42,000 53,000 
Amount paid to creditors during the year ended 31.3.14 were Rs. 80,000. 
Solution: 
 CREDITORS FOR MEDICINES ACCOUNT 
Particulars Amt. 
(Rs.) 
Particulars Amt. (Rs.) 
To Bank A/c (Payment made during the 
year) 
80,000 By Balance b/d (Opening Creditors) 42,000 
To Balance c/d (Closing Creditors) 53,000 By Sports Material A/c (Bal. Fig.: 
Purchase) 
91,000 
 1,33,000  1,33,000 
 
MEDICINES ACCOUNT 
Particulars Amt. 
(Rs.) 
Particulars Amt. (Rs.) 
To Balance b/d (Opening Stock of 
Medicines) 
10,000 By Income and Expenditure A/c (B/F: 
Used up) 
93,000 
To Creditors for Medicines A/c 
(Purchase) 
91,000 By Balance c/d (Closing Stock of 
Medicines) 
8,000 
 1.01,000  1,01,000 
Amount of Medicines to be debited to the Income and Expenditure Account = Rs. 93,000 
An Extract of Balance Sheet as at 31
s
' March, 2013 
Liabilities Amt.(Rs.) Assets Amt. (Rs.) 
Creditors for Medicine 42,000 Stock of Medicines (Opening Stock) 10,000 
An Extract of Balance Sheet as at 31
s
' March, 2014 
Liabilities Amt. (Rs.) Assets Amt. (Rs.) 
Creditors for Medicine 53,000 J Stock of Medicines (Closing Stock) 8,000 
 
     
 
Illustration 4. 
How will you deal with the following items while preparing the Income and Expenditure Account for the ended year on 31
st
 
March, 2015 and a Balance Sheet as on that date? 
Particulars 01.04.14 (Rs.) 31.03.15 (Rs.) 
Amount due to Suppliers of Sports Material 14,000 8,000 
Advances to Suppliers of Sports Material 6,000 2,000 
Stock of Sports Material 18,000 3,000 
During 2014-15, the payment made to the Suppliers of Sports Material was Rs. 54,000. There was no cash purchase. 
 
Solution: 
SUPPLIERS OF SPORTS MATERIAL ACCOUNT 
Particulars Amt. 
(Rs.) 
Particulars Amt. 
(Rs.) 
To Balance b/d (Opening advance to 
Suppliers) 
6,000 By Balance b/d (Amount due to Suppliers 
in beg.) 
14,000 
To Bank A/c (Payment made during the 
year) 
54,000 By Sports Material A/c (Bal. Fig.: 
Purchase) 
52,000 
To Balance c/d (Amount due to Suppliers 
at end) 
8,000 By Balance c/d (Closing advance to 
Suppliers) 
2,000 
 68,000  68,000 
 
SPORTS MATERIAL ACCOUNT 
Particulars Amt. 
(Rs.) 
Particulars Amt. 
(Rs.) 
To Balance b/d (Opening Stock of Sports 
Material) 
18,000 By Income and Expenditure A/c (B/F: 
Used up) 
67,000 
To Creditors for Medicines A/c 
(Purchase) 
52,000 By Balance c/d (Closing Stock of Sports 
Material) 
3,000 
 70,000  70,000 
 
Amount of Sports Material to be debited to the Income and Expenditure Account =Rs. 67,000 
Income and Expenditure Account 
Expenditure Amt. 
(Rs.) 
Income Amt. (Rs.) 
To Sports Material A/c 67,000   
 
An Extract of Balance Sheet as at 31
st
 March, 2015 
Liabilities Amt. 
(Rs.) 
Assets Amt. (Rs.) 
Amount due to Suppliers of Sports 
Material 
8,000 Advances to Suppliers of Sports 
Material Sports Material (Closing 
Stock) 
2,000 
3,000 
 
Illustration 5. 
Calculate the amount that will appear against the item Stationery Account, in the Income and Expenditure Account for the 
year ended 31
st
 March, 2015: 
Particulars 01.04.14 
(Rs.) 
31.03.15 
(Rs.) 
Creditors for Stationery 3,000 12,000 
Stock of Stationery 14,000 40,000 
During 2014-15, the payment made to these creditors amounted to Rs. 60,000. Stationery purchased in cash during the 
year was 25°/. of the total purchase of Stationery. 
 
solution: 
CREDITORS FOR STATIONERY ACCOUNT 
Particulars Amt. 
(Rs.) 
Particulars Amt. 
(Rs.) 
 
     
 
To Bank A/c (Payment made during 
the year) 
60,000 By Balance b/d (Opening Creditors) 3,000 
To Balance c/d (Closing Creditors) 12,000 By Stationery A/c (Bal. Fig.: 
Purchase) 
69,000 
 72,000  72,000 
 
STATIONERY ACCOUNT  
Particulars Amt. 
(Rs.) 
Particulars Am; 
To Balance b/d (Opening 
Stationery) 
14,000 By Income and Expenditure A/c (B/R 
Used up) 
66,000 
To Creditors for Stationery A/c 
(Purchase) 
69,000 By Balance c/d (Closing Stationery) 40,000 
To Bank A/c 
(WN :1)
 23,000   
 1,06,00
0 
 1,06,000 
 
Stationery to be debited to Income and Expenditure Account = Rs. 66,000 
Working Note: 
1. Calculation of Cash Purchase of Stationery: 
Credit Purchase of Stationery = Rs. 69,000 
Let Total Purchase of Stationery = x 
It means, Cash Purchase of Stationery = 25% of x = 0.25x 
Credit Purchase of Stationery = Total Purchase of Stationery - Cash Purchase of Stationery 
Rs. 69,000 = X-0.25X 
x or Total Purchase of Stationery = Rs. 92,000 
Cash Purchase of Stationery = 0.25 x Rs. 92,000 = Rs. 23,000 
 
Determination of Value of Fixed Assets: 
Fixed Assets appearing in the Opening Balance Sheet or Previous Year's Balance Sheet should be adjusted for assets 
purchased, sold and depreciation charged during the year. The adjustment is made in the following manner: a  
Add Purchase of Fixed Assets:  
If some new asset has been purchased during the year, then it is added to previous year's asset. Payment for such asset is 
reflected on the credit side of the Receipts and Payments Account. 
Deduct Sale of Fixed Assets:  
If an asset has been sold during the year, then the book value of such asset is deducted from the concerned 
asset.Receipts from sale of such asset is reflected on the debit side of the Receipts and 
Payments Account. 
The difference between book value and sale proceeds is shown as Profit or Loss in the Income and Expenditure Account. 
 
Deduct Depreciation Charged: 
 The depreciation charged on the asset during the year must be deducted from the concerned asset. 
 
 
  
 
 
 
 
 
  
 
  
 
 
 
  
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