Accounting for Not for Profit Organisation Chapter Notes | SSC CGL Tier 2 - Study Material, Online Tests, Previous Year PDF Download
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 | 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
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 |
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 -creditors as on 31/3/15 (10,00,000) + creditor as on 31/3/16 250,00,000 + Advance paid as on 31 /3/15 15,00,000 1,00,00,000 Advance paid as on 31/3/16 22,00,000 - 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 Medicines | 66,000 | (End) | |||
| Aad: Opening Stock | 22,000 | ||||
|
|
| 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 = 
= 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 
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 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 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 2015-16 300,000/-
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 70,000 subscription received in advance as on 31st March 2015, 25,000, including5,000 for 2016-17
Case 2: Subscription o/s for the year 2014-15 were 70,000 and for theyear2015-16 50,000 Subscription received in advance in the year 2014-15 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 2015-16 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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