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M.216 An Aid to Accountancy—CBSE XII

13. AN EXTRACT OF INCOME AND EXPENDITURE ACCOUNT
Dr. for the year ended 31st March, 2018 Cr.
Expenditure ` Income `
To Sports Material Consumed (WN 3) 78,750 By Subscription A/c (WN 1) 1,80,000
To Salaries A/c (WN 2) 62,500

AN EXTRACT OF BALANCE SHEET
as at 31st March, 2018
Liabilities ` Assets `

Advance Subscription 6,500 Outstanding Subscription 8,750
Creditors for Sports Material 11,250 Advance to Suppliers of Sports Material 3,750
Outstanding Salaries 11,250 Stock of Sports Materials 8,750
Prepaid Salaries 3,750

Working Notes:
1. Dr. SUBSCRIPTION ACCOUNT Cr.
Particulars ` Particulars `
To Outstanding Subscription 11,875 By Advance Subscription A/c 3,500
(in the beginning) (in the beginning)
To Income and Expenditure A/c 1,80,000 By Bank A/c (received during the year) 1,86,125
(Balancing Figure) By Outstanding Subscription A/c 8,750
To Advance Subscription A/c (at the end) 6,500 (at the end)
1,98,375 1,98,375

Alternate Method: Subscription Income to be credited to Income and Expenditure Account can be determined by preparing
the following statement:
` `
Subscription received during the year 1,86,125
Add: Outstanding (31.3.2018) 8,750
Advance (1.4.2017) 3,500 12,250
1,98,375
Less: Outstanding (1.4.2017) 11,875
Advance (31.3.2018) 6,500 18,375
Subscription Income to be credited to Income and Expenditure Account 1,80,000

2. Dr. SALARIES ACCOUNT Cr.
Particulars ` Particulars `
To Prepaid Salaries A/c 6,250 By Outstanding Salaries A/c 18,750
(in the beginning) (in the beginning)
To Bank A/c 67,500 By Income and Expenditure A/c 62,500
To Outstanding Salaries A/c (at the End) 11,250 (Balancing Figure)
By Prepaid Salaries A/c (at the end) 3,750
85,000 85,000