Question No.

(a) Subscriptions received during the year 2021-22 ₹ 50,000

Subscriptions outstanding at the end of 2021-22 ₹ 8,000
Subscriptions outstanding at the beginning of 2021-22 ₹ 6,000

Calculate the amount of subscriptions to be credited to Income and Expenditure Account for the year 2021-22.

(b) Subscriptions received during the year 2021-22 ₹ 50,000

Subscriptions outstanding on 31st March 2022 ₹ 8,000
Subscriptions outstanding on 31st March 2021 ₹ 6,000
Subscriptions received in advance on March 31, 2022 ₹ 5,000
Subscriptions received in advance on March 31, 2021 ₹ 4,000

Calculate the amount of subscriptions to be credited to Income and Expenditure Account for the year 2021-22.
Solution to Q.1. (a)

Subscriptions received during the year 2021-22 ₹ 50,000

Add: Subscriptions outstanding at the end ₹ 8,000
₹ 58,000
Less: Subscriptions outstanding in the beginning ₹ 6,000
₹ 52,000

Alternatively, you may prepare the Subscriptions A/c as follows:

Dr. Subscriptions A/c Cr.

Date Particulars Amount (₹) Date Particulars Amount (₹)
1.4.2021 To Outstanding Subscriptions (beg.) 6,000 2021-22 By Cash/Bank (subscriptions
50,000
received during the year)

To Income & Exp A/c (Bal. fig.) 52,000 31.3.2022 By Outstanding Subscriptions (end) 8,000

58,000 58,000

Solution to Q.1. (b)

Subscriptions received during the year 2021-22 50,000

Add: Subscriptions outstanding at the end of the year 8,000
Subscriptions recived in advance at the beginning 4,000 12,000
62,000
Less: Subscriptionsw outstanding at the beginning of the year 6,000
Subscriptions received in advance at the end of the year 5,000 11,000

51,000

Alternatively, you may prepare the Subscriptions A/c as follows:

Dr. Subscriptions A/c Cr.

Date Particulars Amount (₹) Date Particulars Amount (₹)
By Subscriptions Received in
To Outstanding Subscriptions (beg.) 6,000 4,000
advance (beg.)
To Income & Expenditure A/c By Cash/Bank (subscriptions
51,000 50,000
(balancing fig.) received during the year)
To Subscriptions Received in advance
5,000 By Outstanding Subscriptions (end) 8,000
(end)

62,000 62,000
Question No. 2

(a) The final accounts of a Sports Club are prepared annually as at 31st March. On 31st March
2021, subscriptions in arrears amounted to ₹ 8,700 and subscriptions received in advance for
the year 2021-22 amounted to ₹ 7,100. During 2021-22, ₹ 1,21,400 were received in respect of
subscriptions including ₹ 7,500 arrears for the year 2020-21 and ₹ 10,800 in advance
for the year 2022-23. On 31st March 2022, subcriptions in arrears amounted to ₹ 5,300.
Calculate the amount of subcriptions credited to the Income and Expenditure A/c by preparing
Subscription A/c for the year 2021-22.

(b) Prepare the Subscriptions A/c if the outstanding subscriptions for 2021-22 amounted to ₹
5,300, other things remaining the same. Also prepare Outstanding Subscriptions A/c and
Subscriptions Received in Advance A/c in this case.
Solution to Question No. 2(a)

Dr. Subscriptions A/c Cr.

Date Particulars Amount (₹) Date Particulars Amount (₹)
To Subscriptions Outstanding A/c By Subscriptions Received in
1.4.2021 8,700 1.4.2021 7,100
(in the beginning) Advance A/c (in the beginning)

To Income & Expenditure A/c

31.3.2022 1,14,300 2021-22 By Cash a/c 1,21,400
(bal. fig.)

To Subscriptions Received in By Subscriptions Outstanding A/c

31.3.2022 10,800 31.3.2022
Advance A/c (in the end) (at the end)
2020-21 1,200
2021-22 4,100 5,300

1,33,800 1,33,800

Solution to Question No. 2(b)

Dr. Subscriptions A/c Cr.

Date Particulars Amount (₹) Date Particulars Amount (₹)
To Subscriptions Outstanding A/c By Subscriptions Received in
1.4.2021 8,700 1.4.2021 7,100
(in the beginning) Advance A/c (in the beginning)

To Income & Expenditure A/c

31.3.2022 1,15,500 2021-22 By Cash a/c 1,21,400
(bal. fig.)

To Subscriptions Received in By Subscriptions Outstanding A/c

31.3.2022 10,800 31.3.2022
Advance A/c (in the end) (at the end)
2020-21 1,200
2021-22 5,300 6,500

1,35,000 1,35,000

Dr. Subscriptions Outstanding A/c Cr.

Date Particulars Amount (₹) Date Particulars Amount (₹)
1.4.2021 To balance b/d 8,700 1.4.2021 By Subscriptions A/c (transfer) 8,700

31.3.2022 To Subscriptions A/c (transfer) 6,500 31.3.2022 By balance c/d 6,500

15,200 15,200

Dr. Subscriptions Received in Advance A/c Cr.

Date Particulars Amount (₹) Date Particulars Amount (₹)
1.4.2021 To Subscriptions A/c (transfer) 7,100 1.4.2021 By balance b/d 7,100

31.3.2022 To balance c/d 10,800 31.3.2022 By Subscriptions A/c (transfer) 10,800

17,900 17,900
Question No. 3

How will you deal with the following items while preparing the Income and Expenditure Account of a Sports Club for the year ended 31st
March 2024, and its Balance Sheet as on the same date.

(i) Donations received for the construction of a pavillion during the year was ₹ 20,00,000. The amount spent on the construction upto the end
of the year was ₹ 16,00,000. Estimated cost of construction of the pavillion is ₹ 25,00,000. Construction work is in progress.
(ii) Life Membership Fee received during the year was ₹ 50,000.
(iii) Prize Fund balance in the beginning of the year ₹ 50,000. Prize Fund Investments balance in the beginning of the year ₹ 50,000. Interest
received on Prize Fund Investments during the year ₹ 6,000. Interest received on other investments during the year ₹ 2,000. Prizes awarded
during the year ₹ 5,000.

Give reasons for your answer.

Solution to Question No. 3

Treatment of items (alongwith reasons):

Balance Sheet as on ….......... (Extract)
Liabilities ₹ Assets ₹
Capital Fund xxx Prize Fund Investments 50,000
(a) The donation received ₹ 20,00,000 for the construction of a pavillion is a special donation. Therefore, it is to
Add: Construction
be capitalised and shown on the liability side of the Balance Sheet. The amount spent on the construction of
of Pavillion 16,00,000
the pavillion till the end of the year ₹ 16,00,000 will be shown on the assets side of the Balance Sheet under
Add: Life Membership Fee 50,000
the heading "Pavillion Work-in-Progress". The amount of ₹ 16,00,000 spent on construction will be deducted
from the Pavillion Fund and added to the Capital Fund.
Pavillion Fund 20,00,000
After the completion of the work, Pavillion A/c will be debited (in recognition of the newly constructed asset)
Less: Construction 16,00,000 4,00,000 Pavillion Work-in-Progress 16,00,000
and Pavillion Work-in-Progress A/c will be credited (i.e. closed).

Prize Fund 50,000

Add: Interest received 6,000
Less: Prizes awarded 5,000 51,000
(b) Unless otherwise stated in the question, the entire amount of Life Membership fee will be capitalised.
Therefore, ₹ 50,000 received as Life Membership fee will be added to the Capital Fund.
Income and Expenditure A/c for the year ended …...... (Extract)
Expenditure ₹ Income ₹
By Other interest income 2,000
(c) When a special fund has been created, it will be shown on the liability side of the Balance Sheet and
investments made out of the special fund will be shown on the asset side of the Balance Sheet.
Any receipt relating to the fund will be added to the fund and expenses shall be deducted from the fund.
The interest received on other investments ₹ 2,000 will be shown on the credit side of the Income &
Expenditure A/c since it is a revenue receipt.
Question No. 4 (a)

How will you deal with the following case while preparing the final accounts for the year ended 31st March 2024?

Balance Sheet as on 1-4-2023 (extract)

Liabilities ₹ Assets ₹
Creditors for Sports Materials 6,000 Sports Materials 8,000

Receipts and Payments Account for the year ended on 31-3-2024 (extract)
Receipts ₹ Payments ₹
Sports Materials 1,40,000

Additional Information:
Sports Material on hand on 31-3-2024 was ₹ 22,000

Question No. 4 (b)

How will you deal with the following case while preparing the final accounts for the year ended 31st March 2024?

Receipts and Payments Account for the year ended on 31-3-2024 (extract)
Receipts ₹ Payments ₹
To Sale of Sports Materials
26,000 By Creditors for Sports Materials 1,40,000
(book value ₹ 20,000)
By Cash Purchase of Sports Materials 10,000

Additional Information:
Particulars as on 1st April 2023 as on 31st March 2024
Sports Materials 20,000 25,000
Creditors for Sports Materials 7,000 15,000
Solution to Question No. 4 (a) Solution to Question No. 4 (b)

Dr. Income and Expenditure A/c (Extract) Cr. Dr. Income and Expenditure A/c (Extract) Cr.
Expenditure ₹ Income ₹ Expenditure ₹ Income ₹
To Sports Materials consumed 1,20,000 To Sports Materials Used 54,000 By Profit on Sale of Sports Materials 6,000
(See WN)

Balance Sheet as on 31st March 2016 (extract) Balance Sheet as on 31st March 2016 (extract)
Liabilities ₹ Assets ₹ Liabilities ₹ Assets ₹
Stock of Sports Materials 22,000 Creditors for Sports Materials 15,000 Stock of Sports Materials 25,000

Working Notes: Working Notes:

Dr. Creditors for Sports Materials A/c Cr. Dr. Creditors for Sports Materials A/c Cr.
Particulars ₹ Particulars ₹ Particulars ₹ Particulars ₹
To Cash a/c 1,40,000 By balance b/d 6,000 To Cash A/c (payment) 61,000 By Balance b/d 7,000
By Stock of Sports Materials 1,34,000 To Balance c/d 15,000 By Stock of Sports Materials 69,000
(credit purchases - bal. fig.) (Credit purchase - bal. fig.)
1,40,000 1,40,000 76,000 76,000

Dr. Stock of Sports Materials A/c Cr. Dr. Stock of Sports Materials A/c Cr.
Particulars ₹ Particulars ₹ Particulars ₹ Particulars ₹
By Income & Expenditure A/c
To Balance b/d 8,000 1,20,000 To Balance b/d 20,000 By Cash A/c (Sale) 26,000
(bal. fig.)
To Creditors for Sports To Creditors for Sports Materials By Income and Expenditure A/c (bal.
1,34,000 By Balance c/d 22,000 69,000 54,000
Materials (Credit purchases) (transfer) fig.)
To Income and Expenditure A/c
6000 By Balance c/d 25,000
(profit on sale)
1,42,000 1,42,000 To Cash A/c (purchases) 10,000
1,05,000 1,05,000
Question No. 5
Calculate the amount of stationery expenses to be debited to Income and Expenditure Account for the year 2021-22

Stock of stationery as on 1st April 2021 ₹ 3,000

Creditors for stationery as on 1st April 2021 ₹ 2,000
Advance paid for stationery during the year 2020-21 ₹ 200
Amount paid for stationery during the year 2021-22 ₹ 10,800
Stock of stationery as on 31st March 2022 ₹ 500
Creditors for stationery as on 31st March 2022 ₹ 4,300
Advance paid for stationery as on 31st March 2022. ₹ 1,300
 Solution to Question No. 5

WN-1 Amount paid for stationery expenses paid during the year ₹ 10,800
Add: Closing balance of creditors ₹ 4,300
Add: Adv paid in the beginning ₹ 200
₹ 15,300
Less: Opening Balance of Creditors 2,000
Less: Adv paid in the end 1,300 ₹ 3,300

Credit purchases for the year ₹ 12,000

WN-2 Opening Stock of stationery ₹ 3,000

Add: Purchases (See WN-1) ₹ 12,000
Less: Closing Stock ₹ 500

Stationery consumed during the year ₹ 14,500

Dr. Creditors for Stationery A/c Cr.

Date Particulars Amount (₹) Date Particulars Amount (₹)
To Balance b/d (Advance paid) 200 By Balance b/d (opening creditors) 2,000

By Stationery Stock A/c

To Cash A/c (amount paid to creditors) 10,800 12,000
(Credit purchases - bal. fig.)

To Balance c/d (closing creditors) 4,300 By balance c/d (adv paid) 1,300

15,300 15,300

Dr. Stationery Stock A/c Cr.

Date Particulars Amount (₹) Date Particulars Amount (₹)
To Balance b/d 3,000 By Income & Expenditure A/c (bal. fig.) 14,500

To Creditors for Stationery (credit purchases) 12,000 By Balance c/d 500

15,000 15,000
Question No. 6

You are given the Receipts and Payments Account of "Residents Welfare Association" for the year ending 31st
December 2023.

Receipts ₹ Payments ₹
Balance b/d 2,100 Purchase of sports material 7,000
Subscriptions (including ₹ 1,400 for 2022 Stationery 5,700
18,000
and ₹ 1,500 for 2024) Salaries 7,000
Life Membership fees 9,000 Honorarium 3,000
Legacies 2,000 Upkeep of ground 2,600
Entrance fees 4,000 Telephone charges 2,000
Donations for building fund 10,000 Refreshments 1,400
Tournament fund 8,000 Tournament expenses 6,000
Hire of club hall 5,000 Miscellaneous expenses 1,000
Sale of old bats and balls 500 10% Investment (on 1-7-2023) 12,000
Sale of old furniture 700 Furniture (part payment) 5,000
Balance c/d 6,600
59,300 59,300

Additional information:
1.1.2023 31.12.2023
₹ ₹
Subscription due 1,400 2,400
Subscription received in advance - 1,500
Audit fees outstanding - 1,000
Creditors for stationery 600 500
Stock of stationery - 800
Stock of sports material 1,100 1,500
Building 40,000 40,000

Furniture was sold on 1.1.2023 at its book value. On the same date, furniture costing ₹ 8,000 was purchased.
Depreciation is to be charged at 10% p.a. on furniture. Prepare Income and Expenditure Account for the year
ended 31.12.2023 and Balance Sheet as on that date.
Solution to Question No. 6

Dr. Income and Expenditure A/c for the year ended 31st December 2023 Cr. Working Notes
Expenditure ₹ Income ₹
To Salaries 7,000 By Subscriptions 18,000 WN-1
To Sports Materials consumed (WN-2) 6,600 Less: Outstanding for 2022 1,400 Balance Sheet as on 1st January 2023
To stationery expenses (WN-3) 4,800 Less: Advance for 2023 1,500 Liabilities ₹ Assets ₹
To Honorarium 3,000 Add: Outstanding for 2023 2,400 17,500 Capital Fund 44,700 Building 40,000
To Upkeep of ground 2,600 Furniture 700
To Telephone charges 2,000
To Refreshments 1,400 By Hire of Club Hall 5,000 Stock of Sports Material 1,100
To Miscellaneous expenses 1,000 By Sale of old bats and balls 500 Creditors for stationery 600 Subscriptions in Arrears 1,400
To Audit Fees Outstanding 1,000 600 Cash in Hand 2,100
To Depreciation on furniture 800 By Excess of Expenditure over Income 6,600 45,300 45,300

30,200 30,200
WN-2 Calculation of Sports Material Consumed

Balance Sheet as on 31st December 2023 Purchase of sports material 7,000

Liabilities ₹ Assets ₹ Add: Opening Stock 1,100 8,100
Capital Fund: Furniture 8,000 Less: Closing 1,500
Opening Balance 44,700 Less: Depreciation @ 10% 800 7,200 6,600
Add: Life Membership fee 9,000 Building 40,000
Add: Entrance Fee 4,000
Less: Deficit 6,600 51,100
Legacies 2,000 10% Investments 12,000
Donation for Building Fund 10,000 Accrued Interest on Investment 600 WN-3 Calculation of Stationery Expenses
Tournament Fund 8,000
Less: Expenses 6,000 2,000 Stock of Sports Material 1,500 Purchase of stationery 5,700
Audit fees outstanding 1,000 Closing stock of stationery 800 Add: Creditors at the end 500 6,200
Subscriptions Received in Advance 1,500 Subscriptions in arrears 2,400 Less: Creditors in the beginning 600
Creditors for Furniture (8,000 - 5,000) 3,000 Cash in Hand 6,600 5,600
Creditors for stationery 500 Less: Closing stock of stationery 800
4,800
71,100 71,100
Question No. 7
The following is the Income and Expenditure Account of Rohini Sports Club for the year ended on
31st March 2024.

Dr. Income and Expenditure Account for the year ended on 31st March 2024 Cr.
Expenditure ₹ Income ₹
To Salaries 24,000 By Subscriptions 72,000
To Rent 10,800 By Entrance Fees 8,000
To Taxes 600 By Profit on sale of Sundry Assets 1,200
To Postage 720 By interest on 5% Investments 600
To Affiliation fees to Lawn Tennis Association 1,200 By Surplus on Publication of Brochure:
To Sports Material 15,750 Income 28,000
To Electricity Charges 1,200 Less: Expenses 23,500 4,500
To Repairs and Maintenance of Tennis Court 9,600 By other incomes 225
To Depreciation on Sundry Assets at 10% of
4,800
books value at end of the year
To Surplus of Income over Expenditure 17,855
86,525 86,525

Additional Information:
As on 31.3.2023 As on 31.3.2024
(a) Sundry Assets (including sports materials) 44,000 ?
Bank Balance 4,800 ?
Subscriptions in arrears 4,750 3,500
Subscriptions received in advance 1,400 2,600
5% investments 12,000 12,000
(b) Expenses outstanding:
Salaries 600 1,200
Rent 900 1,800
Taxes Nil 600
Tennis court maintenance 780 320
(c) Outstanding for purchase of sports materials: 1,400 2,950
(d) Prize Fund 4,600 3,250
(e) The book value of Sundry Assets sold on 1.4.2023 was ₹ 4,000.
(f) Prize Fund is separately maintained. All receipts are credited to it separately and
expenditure is met out of the fund directly. During the year, credits to the account amounted
to ₹ 2,800.
(g) Interest received this year was only for two quarters.
(h) The club was admitted as a member of the All India Lawn Tennis Federation on 1.10.2023
when it paid its subscription till 30.9.2024.
(i) Advertisement charges on brochure - yet to be collected ₹ 450.
(j) A fixed deposit of ₹ 25,000 was made on 31st March 2024.

Prepare the Receipts and Payments Account for the year ended on 31st March 2024, and the
Balance Sheet as on that date.
Solution to Question No. 7 Working Notes

WN-1
Receipts and Payments Account for the year ended 31st March 2024 Balance Sheet as on 31st March 2023
Receipts ₹ Payments ₹ Liabilities ₹ Assets ₹
To balance b/d 4,800 By Salaries (WN 2) 23,400 Capital Fund (bal. fig.) 55,870 Sundry assets (incl. sports materials) 44,000
To Subscriptions (WN 7) 74,450 By Rent (WN 3) 9,900 Prize Fund 4,600 5% Investments 12,000
To Entrance fees 8,000 By Taxes (WN 4) Nil Subscriptions Received in Advance 1,400 Subscriptions in arrears 4,750
To Brochure Receipts 28,000 By Postage 720 Expenses outstanding (600+900+780) 2,280 Bank 4,800
Less: Amount in arrears 450 27,550 By Affiliation Fees 1,200 Outstanding for Sports Materials 1,400
To Sale of sundry assets (WN 8) 5,200 Add: Prepaid in current year 1,200 2,400 65,550 65,550
To Interest on Investments 600 By Sports Materials (WN 5) 14,200
Less: Amount in arrears 300 300 By Electricity charges 1,200 WN-2
By Repairs and maintenance (WN 6) 10,060 Dr. Salaries A/c Cr.
To other incomes 225 By Sundry Assets (WN 8) 8,000 Particulars Amount (₹) Particulars Amount (₹)
By Prizes awarded (WN 9) 4,150 To Bank a/c (bal. fig.) 23,400 By outstanding (opening) 600
To Prize fund receipts (WN 9) 2,800 By Fixed Deposit 25,000 To outstanding (closing) 1,200 By Income & Expenditure A/c 24,000
By Brochure Expenses 23,500 24,600 24,600
By Balance c/d 795
1,23,325 1,23,325 WN-3
Dr. Rent A/c Cr.
Balance Sheet as on 31st March 2024 Particulars Amount (₹) Particulars Amount (₹)
Liabilities ₹ Assets ₹ To Bank a/c (bal. fig.) 9,900 By outstanding (opening) 900
Capital Fund 55,870 Sundry assets (incl. sports materials) To outstanding (closing) 1,800 By Income & Expenditure A/c 10,800
Add: Surplus (t/f) 17,855 73,725 Opening Balance 44,000 11,700 11,700
Less: BV of asset sold 4,000
Prize Fund 3,250 Add: Purchase 8,000 WN-4
Subscriptions Received in advance 2,600 Less: Depreciation 4,800 43,200 Dr. Taxes a/c Cr.
Expenses outstanding: 5% Investments 12,000 Particulars Amount (₹) Particulars Amount (₹)
Salaries 1,200 Fixed Deposit 25,000 To Bank a/c (bal. fig.) Nil By outstanding (opening) Nil
Rent 1,800 Interest Accrued 300 To outstanding (closing) 600 By Income & Expenditure A/c 600
Taxes 600 Advertising charges receivable 450 600 600
Tennis Court Maintenance 320 Prepaid affiliation fee 1,200
Outstanding for Sports Materials Subscriptions in arrears 3,500 WN-5
2,950 Bank 795 Dr. Outstanding for Sports Materials A/c Cr.
86,445 86,445 Particulars Amount (₹) Particulars Amount (₹)
To Bank a/c (bal. fig.) 14,200 By outstanding (opening) 1,400
WN-7 To outstanding (closing) 2,950 By Income & Expenditure A/c 15,750
Dr. Subscriptions A/c Cr. 17,150 17,150
Particulars Amount (₹) Particulars Amount (₹)
To Subscriptions in arrears (opening) 4,750 By Subscriptions in advance (opening) 1,400 WN-6
To Income & Expenditure A/c 72,000 By Bank a/c (bal. fig.) 74,450 Dr. Repairs and Maintenance for Tennis Court a/c Cr.
To Subscriptions in advance (closing) 2,600 By Subscriptions in arrears (closing) 3,500 Particulars Amount (₹) Particulars Amount (₹)
79,350 79,350 To Bank a/c (bal. fig.) 10,060 By outstanding (opening) 780
To outstanding (closing) 320 By Income & Expenditure A/c 9,600
WN-8 10,380 10,380
Dr. Sundry Assets a/c Cr.
Particulars Amount (₹) Particulars Amount (₹) WN-9
To Balance b/d 44,000 By Bank (Sales proceeds: 4,000 + 1,200) 5,200 Dr. Prize Fund A/c Cr.
To gain on sale of asset 1,200 By Depreciation A/c 4,800 Particulars Amount (₹) Particulars Amount (₹)
To Bank a/c (purchase of asset) 8,000 By Balance c/d (see explanation below) 43,200 To Bank a/c (bal. fig.) (prizes awarded) 4,150 By Balance b/d 4,600
53,200 53,200 To Balance c/d 3,250 By Bank a/c (given in add. Info.) 2,800
7,400 7,400
Depreciation charged @ 10% on closing balance is 4,800.
So closing balance before charging depreciation = 4800/10% = ₹ 48,000
Closing balance (after charging depreciation) = 48,000 - 4,800 = ₹ 43,200
Question No. 8

Following are the Receipts and Payments Account and Income and Expenditure Account of Delhi Club for
the year ended on 31st March 2024

Receipts ₹ Payments ₹
Balance b/d 1,000 Ground Maintenance 1,200
Subscriptions Salary & Honorarium (including salary of
1,800
2022-23 400 2022-23 ₹ 700)
2023-24 10,300 Water & Electricity 350
2024-25 500 11,200 Books out of Donation 3,000
Legacy 800 Fixed Deposits out of Donation 4,000
Donation for Library 7,000 Match Expenses 2,200
Match Fund 3,300 Crockery 1,000
Sale of furniture 500 Food 2,000
Entertainment 2,000
Sports Materials 2,000
Balance c/d 4,250
23,800 23,800

Dr. Income and Expenditure Account for the year ended on 31st March 2024 Cr.
Expenditure ₹ Income ₹
To Ground Maintenance 1,200 By Subscriptions 10,400
To Salary & Honorarium 1,800
To Entertainment 2,000
To Loss on sale of Furniture 300
To Electricity & Water 350
To Sports Materials used:
75% of total stock in hand during the year 2,010
Food consumed:
80% of total stock in hand 1,500
Excess of Income over Expenditure 1,240
10,400 10,400

Additional Information:
(a) Subscriptions outstanding as on 31.3.2023 ₹ 550 estimated at ₹ 500
(b) Subscriptions received in advance as on 1st April 2023 Nil
(c) Furniture as on 31st March 2023 ₹ 4,000
(d) Crockery as on 31st March 2024 ₹ 2,500

You are required to prepare the Balance Sheet as on 1st April 2023 and 31st March 2024.
Solution to Question No. 8

Balance Sheet as on 1st April 2023

Liabilities ₹ Assets ₹
Capital Fund (bal. fig.) 6,980 Furniture 4,000
Salaries and Honorariam outstanding 700 Crockery (2,500 - 1,000) 1,500
Sports Material (2,010/75% - 2000) 680
Subscriptions in arrears (500 - 50) 500
Cash in Hand 1,000

7,680 7,680

Balance Sheet as on 31st March 2024

Liabilities ₹ Assets ₹
Capital Fund: Furniture 4,000
Opening Balance 6,980 Less: Book value (500 + 300) 800 3,200
Add: Surplus 1,240 Crockery 2,500
Add: Legacy 800 9,020 Books 3,000
Fixed Deposits 4,000
Donation for Library 7,000
Closing Stock of Sports Materials 670
Match Fund 3,300
Less: Match Expenses 2,200 1,100 Prepaid for Food 125
Closing Stock of Food 375
Subscriptions in advance (WN 1) 500 Subscriptions in arrears (WN 1) 200
Salaries and Honorariam outstanding 700 Cash in Hand 4,250

18,320 18,320

Working Notes:

WN-1

Dr. Subscriptions A/c Cr.

Particulars Amount (₹) Particulars Amount (₹)
To Subscriptions in arrears (opening) 500 By Subscriptions in advance (opening) Nil
To Income & Expenditure A/c 10,400 By Bank a/c 11,200
To Subscriptions in advance (closing) 500 By Subscriptions in arrears (closing) (bal. fig.) 200
11,400 11,400

WN-2

Dr. Sports Materials A/c Cr.

Particulars Amount (₹) Particulars Amount (₹)
To Balance b/d 680 By Consumption 2,010
To Purchases 2,000 By Balance c/d 670

2,680 2,680

WN-3

Dr. Food A/c Cr.

Particulars Amount (₹) Particulars Amount (₹)
To Balance b/d Nil By Consumption 1,500
To Purchases 2,000 By Prepayment for Food (bal. fig.) 125
By Balance c/d 375
2,000 2,000

Food consumed during the year constitutes 80% of the total stock in hand during the year
Therefore, Stock in hand during the year = 1500/80% = ₹ 1875
Closing Stock (that part of purchases that was not consumed and is therefore, the closing stock) = 1875 x 20% = ₹ 375

Out of the purchases of ₹ 2000 made during the year, ₹ 1500 was consumed and ₹ 375 is the closing stock.
So this means, we have prepaid food expense of the amount ₹ 125.
Question No. 9
Rajasthan Club, which is also running a restaurant, provides you the following information:

1. Opening and Closing Balances

Particulars as on 01-04-2020 (₹) as on 31-03-2021 (₹)

Furniture 4,40,000 ?
Sports Equipments 4,40,000 ?
China Glass, Cutlery etc. 50,000 ?
6% Govt. Securities (Face Value ₹ 3,00,000) 5,00,000 ?
Stock of Sports Materials 6,000 1,000
Advances to Suppliers of Sports Materials 2,000 1,000
Due to Suppliers of Sports Materials 6,000 3,600
Stock of Stationery 4,000 ?
Unpresented Cheques being payment for
1,800 600
stationery
Subscription Outstanding 9,500 7,000
Subscription Received in Advance 2,800 5,200
Outstanding Miscellaneous Expenses 9,500 7,000
Miscellaneous Expenses paid in advance 2,800 5,200
Outstanding Wages 10,000 8,000
Cash Balance 20,000 60,000
Bank Balance as per Pass Book 10,00,000 ?
Stock of Provisions 60,000 7,60,000
Debtors for Provisions 60,000 80,000
Creditors for Provisions 2,00,000 1,00,000

2. Payments:
Suppliers of sports materials ₹ 21,600; Miscellaneous expenses ₹ 1,48,900; Wages ₹ 1,02,000;
stationery ₹ 3,200; Furniture (purchased on 1-10-2020) ₹ 3,00,000; Sports Equipment (purchased
on 1-10-2020) ₹ 3,00,000; RBI Tax Free Bonds (purchased on 1-1-2021) [Face Value ₹ 2,00,000]
₹ 1,58,400; Creditors for Provisions ₹ 21,00,000; Cash Purchases of Provisions 1/11th of Total
Purchases.

3. Receipts:
Subscription ₹ 1,48,900; Interest on 6% Govt. Securities (after TDS @ 10%) ₹ 16,200;Collections
from Debtors for Provisions ₹ 17,80,000; Cash Sales of Provisions 10% of Total Sales.

4. Other Information:
BV as on 1.4.2020 40000
Depreciation on China, Glass Cutlery etc. @ 20%; on Furniture @ 10% p.a.; Sports Equipment @
BV as on 31.12.2020 40000 - Depreciation for 9 months 37000
10%. The cost of boarding expenses ₹ 55,000 (including ₹ 40,000 for restaurant staff). Write off 25%
Depreciation for 9 months 3000
of stationery. Furniture (having book value of ₹ 40,000) as on 1-4-2020 was sold at a loss of 20% on
Loss on sale @ 20% 7400
31-12-2020.
Sale value of Furniture 29600

You are required to calculate:

(a) The amount of Profit/Loss as per Restaurant Trading Account for the year ending on 31st March 2021.
(b) The amount of subscription to be credited to the Income and Expenditure Account for the year ending 31st March 2021.
(c) The amount of miscellaneous expenses to be debited to the Income and Expenditure Account for the year ending 31st March 2021.
(d) The sports materials consumed to be debited to the Income and Expenditure Account for the year ending 31st March 2021.
(e) The stationery consumed to be debited to the Income and Expenditure Account for the year ending 31st March 2021.
(f) The Bank Balance to be shown in the closing Balance Sheet as at 31st March 2021.
Solution to Question No. 9 (a)

Dr. Restaurant Trading Account Cr.

Expenditure ₹ Income ₹
To Opening Stock of Provisions 60,000 By Sales of Provisions:
Cash Sales 2,00,000
To Purchases of Provisions: Credit Sales 18,00,000 20,00,000
Cash purchases 2,00,000
Credit purchases 20,00,000 22,00,000 By cost of boarding expenses (total) 55,000

To Boarding Expenses (restaurant staff) 40,000 By Closing Stock of Provisions 7,60,000

To Wages 1,02,000
Add:Outstanding at the end 8,000
Less: Outstanding in the beg. 10,000 1,00,000

To Depreciation on China Glass & Cutlery 10,000

To Profit (bal. fig.) 4,05,000

28,15,000 28,15,000

Working notes

WN-1
Dr. Debtors for Provisions Account Cr.
Particulars Amount (₹) Particulars Amount (₹)
To balance b/d 60,000 By Cash/Bank A/c 17,80,000
To Credit Sales (bal. fig.) 18,00,000 By balance c/d 80,000
18,60,000 18,60,000

Cash sales are 10% of total sales

Credit Sales are 90% of total sales
Total Sales = ₹ 18,00,000 / 90% = ₹ 20,00,000
Cash Sales = 10% of ₹ 20,00,000 = ₹ 2,00,000

WN-2
Dr. Creditors for Provisions Account Cr.
Particulars Amount (₹) Particulars Amount (₹)
To Cash/Bank A/c 21,00,000 By balance b/d 2,00,000
To balance c/d 1,00,000 By Credit Purchases (bal. fig.) 20,00,000
22,00,000 22,00,000

Cash purchases are 1/11 of total purchases. This means Credit purchases are 10/11 of total purchases.
So total purchases = 20,00,000 *11/10 = ₹ 22,00,000
Cash Purchases = 1/11 * 22,00,000 = ₹ 2,00,000

Solution to Question No. 9 (b)

Dr. Subscription Account Cr.

Particulars Amount (₹) Particulars Amount (₹)
To Subscription Outstanding (beg.) 9,500 By Subscriptions Received in Advance (beg.) 2,800
To Income & Expenditure A/c (bal fig.) 1,44,000 By Cash/Bank A/c 1,48,900
To Subscriptions Received in Advance (end) 5,200 By Subscriptions Outstanding (end) 7,000
1,58,700 1,58,700
Solution to Question No. 9 (c)

Dr. Miscellaneous Expense Account Cr.

Particulars Amount (₹) Particulars Amount (₹)
To Misc. Exp. Paid in advance (beg.) 2,800 By Outstanding Misc. Exp. (beg.) 9,500
To Cash/Bank A/c 1,48,900 By Income & Expenditure A/c (bal. fig.) 1,44,000
To Outstanding Misc. Exp. (end) 7,000 By Misc. Exp. Paid in advance (end) 5,200
1,58,700 1,58,700

Solution to Question No. 9 (d)

Dr. Creditors for Sports Materials Account Cr.

Particulars Amount (₹) Particulars Amount (₹)
To Advances to Suppliers (beg.) 2,000 By Due to Suppliers (beg.) 6,000
To Cash/Bank A/c 21,600 By Credit Purchases of Sports Materials (bal. fig.) 20,200
To Due to Suppliers (end) 3,600 By Advances to Suppliers (end) 1,000
27,200 27,200

Dr. Stock of Sports Materials Account Cr.

Particulars Amount (₹) Particulars Amount (₹)
To Balance b/d 6,000 By Sports Materials Consumed (bal. fig.) 25,200
To Credit Purchases of Sports Materials 20,200 By Balance c/d 1,000
26,200 26,200

Solution to Question No. 9 (e)

Stationery Purchases = ₹ 3,200 as per Pass Book + ₹ 600 - ₹ 1,800 = ₹ 2,000

Stationery Consumed = 25% of (₹ 4,000 + ₹ 2,000) = ₹ 1,500

Solution to Question No. 9 (f)

Dr. Cash and Bank Account Cr.

Particulars Amount (₹) Particulars Amount (₹)
To Balance b/d: By Creditors for Provisions A/c 21,00,000
Cash 20,000 By Wages A/c 1,02,000
Bank (10,00,000 - 1,800) 9,98,200 By Suppliers of Sports Materials 21,600
By Furniture A/c 3,00,000
To Debtors for Provisions A/c 17,80,000 By Miscellaneous Expenses A/c 1,48,900
To Interest on Government Securities A/c 16,200 By Sports Equipments A/c 3,00,000
To Subscription A/c 1,48,900 By Stationery A/c 3,200
To Cash Sales of Provisions A/c 2,00,000 By Cash Purchase of Provisions A/c 2,00,000
To Furniture A/c 29,600 By 8% RBI Tax Free Bonds A/c 1,58,400

To Balance c/d: By Balance c/d:

Bank Overdraft 2,01,200 Cash 60,000

33,94,100 33,94,100