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1.4 Double Entry Book Keeping—CBSE XII
Solution:
Case 1.
INCOME AND EXPENDITURE ACCOUNT
Dr. for the year ended 31st March, 2019 Cr.
Expenditure ` Income `
To Prize Awarded 12,000
Case 2.
BALANCE SHEET as at 31st March, 2019
Liabilities ` Assets `
Prize Fund—Opening Balance 25,000
Less: Prize Awarded 12,000 13,000
Case 3.
BALANCE SHEET as at 31st March, 2019
Liabilities ` Assets `
Prize Fund—Opening Balance 25,000 10% Prize Fund Investment 25,000
Add: Donation Received 10,000
Int. on Prize Fund Investment 2,500
37,500
Less: Prize Awarded 12,000 25,500
Note: When a specific fund has been created, it is shown in the liabilities side and investment out of specific
fund is shown in the assets side of the Balance Sheet. Any receipt relating to fund is added to the fund
and related expenses are deducted from the fund.
Illustration 4.
Show the following information in the Balance Sheet of the Cosmos Club as on 31st March, 2019:

Particulars Dr. (`) Cr. (`)
Tournament Fund 1,50,000
Tournament Fund Investment 1,50,000
Income from Tournament Fund Investment 18,000
Tournament Expenses 12,000
Additional Information: Interest Accrued on Tournament Fund Investment ` 6,000.
(CBSE Sample Paper 2008, Modified)
Solution: Cosmos Club
BALANCE SHEET as at 31st March, 2019
Liabilities ` Assets `
Tournament Fund 1,50,000 Tournament Fund Investment 1,50,000
Add: Income from Tournament Accrued Interest on Tournament Fund
Fund Investment 18,000 Investment 6,000
Accrued Interest on
Tournament Fund Investment 6,000
1,74,000
Less: Tournament Expenses 12,000 1,62,000

Notes:
1. All incomes pertaining to Tournament Fund are added and expenses are deducted from Tournament Fund.
2. Accrued interest on Tournament Fund Investment will be added to fund and also shown as an asset.