Page 257 - ISCDEBK-XI

Non-Trading Organisation 23.5

Illustration 3 (Subscription written off).
From the following information, prepare Subscriptions Account for the year ending
31st March, 2020:
31st March, 31st March,
2019 (`) 2020 `
Subscriptions in Arrears 20,000 18,000
Subscriptions in Advance 13,000 11,000

During the year ending 31st March, 2020, subscriptions received were ` 2,10,000 (including
` 6,000 of arrears from previous year) and subscription arrears of previous years were written
off ` 4,000.

Solution:
Dr. SUBSCRIPTIONS ACCOUNT Cr.
Particulars ` Particulars `
To Subscriptions in Arrears A/c 20,000 By Subscriptions Received in Advance A/c 13,000
To Income & Expenditure A/c 2,14,000 By Bank A/c 2,10,000
(Balancing Figure) By Subscriptions written off A/c 4,000
To Subscriptions Received in Advance A/c 11,000 By Subscriptions Outstanding A/c 18,000
2,45,000 2,45,000

Illustration 4 (Calculation of Sundry Expenses).
How are the following items dealt while preparing the Income & Expenditure Account for the
year ended 31st March, 2019 and the Balancing Sheet as on that date:

Sundry Expenses paid during 2019–20 ` 40,000.
As on 1st April, 2019 As on 31st March, 2020
` `
Sundry Expenses Outstanding 5,000 9,000
Sundry Expenses Paid in Advance 8,000 7,000

Solution: INCOME & EXPENDITURE ACCOUNT (AN EXTRACT)
Dr. for the year ended 31st March, 2020 Cr.
Expenditure ` Income `
To Sundry Expenses A/c (WN) 45,000

BALANCE SHEET (AN EXTRACT)
as at 31st March, 2020
Liabilities ` Assets `

Outstanding Sundry Expenses 9,000 Prepaid Sundry Expenses 7,000

Working Note: Current Sundry Expenses = Sundry Expenses paid during the year + Outstanding Expenses
(Current Year) and Advance paid (Last Year) – Outstanding
Expenses (Last Year) and Advance Paid (Current Year)