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M.40 An Aid to Accountancy—CBSE XII

13. INCOME AND EXPENDITURE ACCOUNT
Dr. for the year ended 31st March, 2018 Cr.
Expenditure ` Income `
To General Expenses 2,160 By Subscription 6,520
Add: Outstanding 450 2,610 Add: Outstanding 1,200 7,720
To Salaries and Wages 2,200 By Entrance Fees 4,960
Add: Outstanding 800 3,000 By Interest on Investment 570
To Depreciation on Furniture 500 Add: Accrued Interest 190 760
To Rent and Taxes 2,240 By Sundry Receipts 320
To Stationery:
Opening Stock 2,000
Add: Purchases 500
2,500
Less: Closing Stock 750 1,750
To Surplus, i.e., Excess of Income
over Expenditures 3,660
13,760 13,760

Note: As per CBSE Guidelines, Entrance Fee is credited to Income and Expenditure Account.
BALANCE SHEET
as at 31st March, 2018
Liabilities ` Assets `
Outstanding Expenses: Cash in Hand 7,870
General Expenses 450 Investment 10,000
Wages 800 1,250 Furniture 3,200
Capital Fund: Less: Depreciation 500 2,700
Opening Balance (Note) 16,800 Stock of Stationery 750
Add: Surplus 3,660 Subscription Outstanding 1,200
Life Membership Fees 1,000 21,460 Accrued Interest on Investment 190
22,710 22,710

Note:
Calculation of Opening Capital Fund:
BALANCE SHEET
as at 31st March, 2017

Liabilities ` Assets `
Capital Fund (Balancing Figure) 16,800 Cash in Hand 4,800
Stock of Stationery 2,000
Investment 10,000
16,800 16,800
14. (a) As per the provisions of Section 37 of the Indian Partnership Act, 1932, Z has the
choice to get either of the following till final settlement is made:
(i) Interest @ 6% p.a. on the balance amount considered as loan to firm

6 8
= ` 1,00,000 × ¥ = ` 4,000
100 12