Page 20 - DEBKVOL-1

1.10 Double Entry Book Keeping—CBSE XII
Illustration 12.
Following amounts relate to a Charitable Hospital: `
Stock of medicines on 1st April, 2017 50,000
Creditors for medicines on 1st April, 2017 1,00,000
Medicines purchased during 2017–18 1,20,000
Value of medicines of due date expired during the year 5,000
Stock of medicines on 31st March, 2018 25,000
What amount of medicines consumed during the year ended 31st March, 2018 is debited to
Income and Expenditure Account?

Solution:
`
Opening Stock of Medicines during the year 50,000
Add: Medicines purchased during the year 1,20,000
1,70,000
Less: Closing Stock of Medicines 25,000
Amount to be debited to Income and Expenditure Account 1,45,000
Note: Value of medicines due date of which expired will not be considered because stock of medicines has
already been reduced by this amount.
Illustration 13.
Following is the Receipts and Payments Account of Excellent Recreation Club for the year
ended 31st March, 2018:

Dr. RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31st March, 2018 Cr.
Receipts ` Payments `
To Cash in Hand 500 By Salaries 24,000
To Cash at Bank 5,650 By Rent 7,200
To Subscriptions 45,500 By Postage 300
(including ` 1,000 for 2016–17 and By Printing and Stationery 2,550
` 1,500 for 2018–19) By Electricity Charges 3,000
To Interest on Investments 20,000 By Meeting Expenses 1,500
To Bank Interest 250 By Library Books 10,000
To Sale of Furniture 3,000 By Investments in Bonds 10,000
By Cash in Hand 1,550
By Cash at Bank 14,800
74,900 74,900
Following additional information is also supplied to you:
(i) On 1st April, 2017, the Club had following assets and liabilities—
(a) Investments ` 4,00,000; (b) Furniture ` 30,000; (c) Library Books ` 50,000 and
(d) Liability for Rent ` 600 and for Salaries ` 2,000.
(ii) On 31st March, 2018, rent of ` 800 and salaries of ` 2,500 were in arrears.
(iii) The book value of furniture sold was ` 2,500.
Prepare Income and Expenditure Account of the Club for the year ended 31st March, 2018 and
Balance Sheet as at that date.