Page 18 - DEBKVOL-1

1.8 Double Entry Book Keeping—CBSE XII
Illustration 10.
From the following information, prepare Income and Expenditure Account of the Club for the
year ended 31st March, 2013 and ascertain the Capital Fund on 31st March, 2012:

Dr. RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31st March, 2013 Cr.
Receipts ` Payments `
Balance b/f 39,100 Salary 6,000
Subscriptions: Newspapers 4,100
2011–2012 2,400 Electricity Bill 2,000
2012–2013 53,000 Fixed Deposit (on 1.7.2012 @ 9% p.a.) 40,000
2013–2014 1,000 56,400 Books 21,200
Sale of Old Newspapers 2,500 Rent 13,600
Government Grants 20,000 Furniture 21,000
Sale of Old Furniture (Book value ` 8,000) 11,400 Balance c/f 22,400
Interest on Fixed Deposits 900
1,30,300 1,30,300
Additional Information:
(i) Subscriptions outstanding as on 31st March, 2012 were ` 4,000 and on 31st March, 2013
were ` 5,000.
(ii) On 31st March, 2013, Outstanding Salary was ` 1,200 and Outstanding Rent was ` 2,400.
(iii) The Club owned Furniture ` 30,000 and Books ` 14,000 on 1st April, 2012.
(MSE Chandigarh 2015)
Solution:
Dr. INCOME AND EXPENDITURE ACCOUNT for the year ended 31st March, 2013 Cr.
Expenditure ` Income `
To Salary 6,000 By Subscription (WN 1) 56,400
Add: Outstanding (31.3.2013) 1,200 7,200 By Sale of Old Newspapers 2,500
To Newspapers 4,100 By Government Grants 20,000
To Electricity Bill 2,000 By Gain (Profit) on Sale of Furniture 3,400
To Rent 13,600 By Interest on Fixed Deposits 900
Add: Outstanding (31.3.2013) 2,400 16,000 Add: Accrued Interest 1,800 2,700
To Surplus (Excess of Income over Expenditure) 55,700
85,000 85,000

Calculation of Capital Fund on 31st March, 2012:
BALANCE SHEET as at 31st March, 2012
Liabilities ` Assets `
Capital Fund (Bal. Fig.) 87,100 Bank 39,100
Subscription Due 4,000
Furniture 30,000
Books 14,000
87,100 87,100
Working Notes:
1. Dr. SUBSCRIPTION ACCOUNT Cr.
Particulars ` Particulars `
To Outstanding Subscription A/c 4,000 By Bank A/c (Total Subscription) 56,400
To Income and Expenditure A/c (Bal. Fig.) 56,400 By Outstanding Subscription A/c (at the end) 5,000
To Advance Subscription A/c (at the end) 1,000
61,400 61,400
2. Government Grants being not for specific purpose are treated as Revenue Receipts and thus, are credited to Income and
Expenditure Account.