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Model Test Papers M.345

14. INCOME AND EXPENDITURE ACCOUNT
Dr. for the year ended 31st March, 2018 Cr.
Expenditure ` Income `

To Salaries 12,000 By Subscriptions 61,100
To Sports Equipment: Add: Due (31st March, 2018) 560
Opening (1st April, 2017) 21,800 Advance (1st April, 2017) 80
Add: Purchases 46,785 61,740
68,585 Less: Due (1st April, 2017) 480
Less: Closing (31st March, 2018) 29,700 38,885 61,260
To Stationery 1,220 Less: Advance (31st March, 2018) 40 61,220
To Maintenance of Ground 6,000 By Admission Fees 350
To Prizes 1,060 By Interest on Investments 9,000
To Depreciation on Building 4,000
To Surplus 7,405
(i.e., Excess of Income Over Expenditure)
70,570 70,570

BALANCE SHEET as at 31st March, 2018
Liabilities ` Assets `
Subscription Received in Advance 40 Cash in Hand 380
Capital Fund 2,16,550 Cash at Bank 17,355
Add: Surplus 7,405 2,23,955 Investments* 1,00,000
Subscription Due 560
Sports Equipment 29,700
Building 76,000
2,23,995 2,23,995

* Interest on investments received ` 9,000 in 2017–18 indicates there must be investment in the
beginning of 2017–18. The rate of interest is 9%.
So, the value of Investments = 100/9 × ` 9,000 = ` 1,00,000.

15.
Dr. REALISATION ACCOUNT Cr.

Particulars ` Particulars `
To Sundry Assets—Transfer: By Creditors 50,000
Goodwill 30,000 By Bank A/c—Assets Realised:
Land and Building 80,000 Goodwill 20,000
Plant and Machinery 56,000 Land and Building 1,00,000
Car 54,000 Plant and Machinery 50,000
Debtors 48,000 2,68,000 Car 28,000
To Bank A/c (Creditors Paid) 50,000 Debtors 24,000 2,22,000
To Bank A/c (Expenses) 2,000 By Loss on Realisation
transferred to:
A’s Capital A/c (2/4) 24,000
B’s Capital A/c (1/4) 12,000
C’s Capital A/c (1/4) 12,000 48,000
3,20,000 3,20,000