DK Goel Solutions Chapter 1 Financial Statements of Not for Profit Organisations

Read below DK Goel Solutions for Class 12 Chapter 1 Financial Statements of Not for Profit Organisations. These not for profit organisation class 12 solutions have been designed based on the latest Class 12 DK Goel Accountancy book used by commerce stream students issued for current year and the questions given in each chapter.

In this chapter you will be able to understand the concepts of non-profit organisations and the process of doing accounting for such organisations. Students should note that the accounting process for companies is slightly different from accounting of non profit organisations. This chapter and the questions given at the end will help the students to clearly understand the entire accounting process.

The chapter contains a lot of questions which can be very helpful for Class 12 commerce students of Accountancy and will also help build strong concepts which will be really helpful in your career. These solutions are free and will help you to prepare for Class 12 Accountancy. Just scroll down and read through the answers provided below

Financial Statements of Not for Profit Organisations (NPO) DK Goel Class 12 Accountancy Solutions

Short Answer Questions

Question 1. Give three essential features of Receipts and Payments Account.

Solution 1
Receipts and Payments Account Features:
1.) Capital and revenue: all receipts and payments are registered, whether in terms of revenue or capital.
2.) Period: Cash and bank deposits are reported without discriminating between present, recent or consecutive (next) accounting cycles.
3.) Opening and closing balance: At the beginning of the accounting period, the opening balance of this account shows cash in hand and/or at the bank and the closing balance shows cash in hand and/or at the bank at the end of the accounting period.

Question 2. Give three essential features of Income and Expenditure Account.

Solution 2
Features of the Account for Revenue and Expenditure:—
1.) Nature: It is an account of a nominal account. It is also debited with costs and liabilities and profits and gains are attributed it.
2.) Opening and closing balance: No opening balance is available. The balance is either a surplus or a loss at the p. It is moved from the balance sheet the Capital Budget.
3.) Adjustment: This account shall be prepared on an accrual accounting basis and all changes shall be rendered in respect of prepaid or outstanding costs and sales, depreciation clauses or questionable debts.

Question 3. Distinguish between Income and Expenditure Account and Receipt and Payment Account on the basis of:
(1) Nature, (ii) Nature of items, (iii) Period

Solution 3

Basis	Receipt and Payment Account	Income and Expenditure Account
Nature	A list of cash transactions showing receipts and transfers is listed under separate headings for the time.	It’s like an account of Profit and Loss.
Nature of item	This account’s debit side tracks refunds and logs transfers on the credit side.	This account’s debit side reports costs and losses, and sales and profits are reported on the credit side.
Period	If they refer the prior, present or successive year, it displays refunds and transfers over the year.	It indicates the current year’s revenue and spending alone.

Question 4. How would a not-for-profit organisation deal with the following items:
(i) Outstanding Subscriptions, (ii) Subscriptions Received in advance, (iii) urnament Fund.

Solution 4
(i) Outstanding Subscription:- Outstanding Subscription Revenue and Expense A/c of the year is reported on the debit side and is also displayed on the Assets Side of the Balance Sheet of the current year.

(ii) Subscriptions received in advance:- Subscriptions received in advance for the coming year are displayed on the balance sheet side of the liabilities.

(iii) urnament Fund:- The urnament Fund will be viewed in line with the changes on the debt side of the balance sheet.

Question 5. List the items that you will exclude from the Income and expenditure Account and in each case state briefly in a sentence or two why you excluded that item?

Solution 5

Cash/bank reserves have been omitted for opening and closing.
The payment of capital spending for the acquisition of government securities has been removed.
The number of subscriptions earned was omitted for the years 2013-14 and 2014-15.
The life membership fee is an object of receipt of capital and is therefore exempt.
Construction donation is a receipt for a particular reason and is therefore exempt.

Question 6. Explain the following terms: (i) Capital Fund; (ii) Legacy (iii) Specific Donations.

Solution 6
(i) Capital Fund:- The Capital Fund has no limitations on its use. In other words, management can, as it deems necessary, use the sums in the fund serve the reason for which the company operates.

(ii) Legacy:- Legacy is the sum earned a non-profit entity under the will of a dead citizen as a gift. Conditions for its use should or may not be specified the donor. If no condition is stated, the ‘Common Contribution’ is paid for. And it is counted as ‘Unique Donation’ if a provision is stated.

(iii) Particular gift:- If the donor states the reason for which the gift will be used, it is a specific gift. For instance, Donation received Rs. 2,00,000 for a library. It means the donation received can be used only for library, i.e. it is a specific donation.

Question 7. How will you deal with sale of old assets while preparing the financial statements of a not-for-profit organisation?

Solution 7
The selling of an asset can result in a benefit if the value of the sale is greater than the value of the book; or a loss if the value of the sale is less than the value of the book; or neither a profit nor a loss if the value of the sale is equal the value of the book. Book The value of the asset as of the date of selling shall be assessed after depreciation has been paid up the date of sale. Selling value is attributed the Asset Account, while benefit, if any, is credited the Revenue and Expense Account or loss, if any.

Question 8. How would a non-profit organisation record the following items while preparing Income & Expenditure Account and Balance Sheet
(i) Entrance Fees
(ii) Life Membership Fees
(iii) Legacy
(iv) General Donation

Solution 8
(i) Entry fees:- The payment charged an applicant at the time of becoming a member of a not-for-profit entity is the entrance fee or membership fee. A tax refund is an entry charge or entry fee which is thus paid for as an income and added the Income and Expense Account.

(ii) Life Membership Fees:- Life Membership Fees are reported on the liability side of the Balance Sheet as a Capital Receipt and added the Capital Fund. It is not counted as wages since a life member pays a one-time contribution during his life and requires resources.

(iii) Legacy:- Legacy is the sum earned a not-for-profit entity under the will of the deceased citizen as a gift. The donor may or may not specify conditions for its use. In case, no condition is specified, it is accounted as ‘General Donation’. And if a condition is specified, it is accounted as ‘Specific Donation’.

(iv) General donation:- General donation is a donation in which no requirement for its use is specified the donor. The general contribution sum is paid for as revenue and added the account of income and spending.

Question 9. How will you treat the following items while preparing Income and expenditure A/c and Balance sheet of non-profit Organisation?
(i) Donation for Building (ii) Sale of Newspapers (iii) Investment purchased.

Solution 9
(i) Donation for Construction:- Donation for Construction means that the donation received will only be used as a particular donation for construction. The same donation is capitalized and is displayed on the hand of the balance sheet’s liabilities.
(ii) Selling of publications:- The money paid for newspapers, magazines, newspapers, etc. is credited the revenue and spending budget, which is the cost of income. Thus, the Revenue and Expense Account is credited with the money realized from the selling of old newspapers, books, periodicals, etc.
(iii) Investment Purchased:- Investment investments are viewed as capital spending and are shown on the asset side of the balance sheet.

Question 10. What amount will be credited the Income and Expenditure Account for the year ending 31st March, 2019 on the basis of following information?

	01-04-2018	31-03-2019
Outstanding Subscription	15,000	18,000

Subscriptions received during the year 2018-19 were 1,80,000.

Solution 10

Income and Expenditure Account for the year ending 31^st march 2019

Class 12 Chapter 1 Financial Statements of Not for Profit Organisations

Working Note:-
Subscriptions Outstanding = Rs. 18,000 – Rs.15,000 = Rs. 3,000

Question 11. What amount will be credited the Income and Expenditure Account for the year ending 31st March, 2019 on the basis of the following information:

	01-04-2018	31-03-2019
Advance Subscription	8,000	2,000

Subscriptions received during the year 2018-19 were 2,00,000.

Solution 11
Income and Expenditure Account for the year ending 31st march 2019

Working Note:-
Advance Subscriptions = Rs. 8,000 – Rs.2,000 = Rs. 6,000

Question 12. What amount will be credited the Income and Expenditure Account for the year ending 31st March, 2019 on the basis of the following information:

	01-04-2018	31-03-2019
Outstanding Subscription	20,000	15,000
Advance Subscription	4,000	6,000

Subscriptions received during the year 2018-19 were 5,00,000.

Solution 12
Income and Expenditure Account for the year ending 31st march 2019

Working Note:-
Subscriptions Outstanding = Rs. 6,000 – Rs.4,000 = Rs. 2,000
Advance Subscriptions = Rs. 20,000 – Rs.15,000 = Rs. 5,000

Question 13. Sports Club Ahmedabad had received in 2020-21 Rs. 80,000 as subscription. Further information is:

		Rs.
I.	Subscription due but not received on 1-4-2020	5,200
II.	Subscription received in advance on 1-4-2000	2,400
III.	Subscription due but not received on 31-3-2021	4,800
IV.	Subscription received in advance on 31-3-2021	700

What amount should be credited Income and Expenditure Account as subscriptions?
Solution 13
Income and Expenditure Account for the year ending 31^st march 2021

Question 14. How much amount will be recorded in Income and Expenditure Account if club has 400 members each paying an annual subscription of 100. Outstanding Subscription on 31st March, 2019 were 2,000.
Solution 14
Income and Expenditure Account for the year ending 31st march 2019

Question 15. How much amount will be recorded in Income and Expenditure Account if club has 500 members each paying an annual subscription of 200. On 31st March 2019, Advance Subscription is 1,000 and Outstanding Subscription is Rs. 5,000.
Solution 15
Income and Expenditure Account for the year ending 31st march 2019

Question 16. How much amount will be recorded in Income and Expenditure Account if there are 500 members, each paying an annual subscription of 100; subscriptions received during the year 46,000; subscriptions received in advance at the beginning of the year 1,200.
Solution 16
Income and Expenditure Account for the year ending 31st march 2019

Question 17. Salary paid Rotary Club for the year ended 31st March, 2019 amounted 1,20,000. How much amount will be recorded in ‘Income and Expenditure Account’ if unpaid salary was 5,000 and salary paid in advance was 1,000 on 31st March, 2019.
Solution 17
Income and Expenditure Account for the year ending 31st march 2019

Question 18. Salary paid Lions Club for the year ended 31st March, 2019 amounted 1,80,000. How much amount will be recorded in Income and Expenditure Account if outstanding salary on 31st March, 2018 was 10,000 and Outstanding salary on 31st March, 2019 was 6,000.
Solution 18
Income and Expenditure Account for the year ending 31st march 2019

Question 19. Salary paid Jaipur Sports Club for the year ended 31st March, 2019 amounted 2,00,000. How much amount will be recorded in Income and Expenditure Account in the following case :

	31-03-2018	31-03-2019
Outstanding Salary	7,000	10,000
Prepaid Salary	5,000	4,000

Solution 19
Income and Expenditure Account for the year ending 31st march 2019

Question 20. In the year 2020 – 21, salaries paid in cash amounted to Rs. 40,000. Ascertain the amount chargeable to Income and Exp. A/c for the year ending on 31st March 2021 from the following additional information:

		Rs.
I	Outstanding Salaries on 31-3-2020	3,000
II	Outstanding Salaries on 31-3-2021	4,500
III	Prepaid Salaries on 31-3-2020	1,800
IV	Prepaid Salaries on 31-3-2021	1,400

Solution 20
Income and Expenditure Account for the year ending 31^st march 2021

Working Note:-
Outstanding Salary 31^st March, 2020 = Rs. 4,500 – Rs. 3,000 = Rs. 1,500
Prepaid Salary 31^st March, 2021 = Rs. 1,800 – Rs. 1,400 = Rs. 400

Question 21. Calculate what amount will be posted to Income and Expenditure Account for the year ending 31^stMarch, 2021:
Amount paid for stationery during the year Rs.10,000; stock of stationery in hand at the beginning and end of the year RS.1,200 and Rs.1,500 respectively.
Solution 21
Income and Expenditure Account for the year ending 31^st march 2021

Question 22. How much amount will be shown in Income and Expenditure Account in the following case :

		Rs.
I	Sck of Sports Materials on 1-4-2018	3,000
II	Amount paid for sports materials purchased during 2018-19	20,000
III	Sck of sports materials on 31-3-2019	4,800

Solution 22

Question 23. How much amount will be shown in Income and Expenditure Account in the following case:

		Rs.
I	Credirs for sports materials on 1-4-2018	4,000
II	Amount paid for sports materials purchased during 2018-19	45,000
III	Credirs for sports materials on 31-3-2019	6,500

Solution 23

Question 24. How much amount will be shown in Income and Expenditure Account in the following case :

		Rs.
I.	Amount paid for stationery purchased during 2018-19	20,000
II.	Credirs for Stationery on 31-3-2019	1,800
III.	Sck of Stationery on 31-3-2019	2,000

Solution 24

Question 25. How much amount will be shown in Income and Expenditure Account in the following case :

		Rs.
I	Amount paid for stationery purchased during 2018-19	34,000
II	Credirs for Stationery on 1-4-2018	3,000
III	Credirs for Stationery on 31-3-2019	4,200
IV	Sck of Stationery on 1-4-2018	2,500
V	Sck of Stationery on 31-3-2019	2,800

Solution 25

Question 26. How much amount will be shown in Income and Expenditure Account in the following case :

	As at 01-04-2018	As at 31-03-2019
	Rs.	Rs.
Credirs for Stationery	4,000	6,200
Sck of Stationery	5,400	5,000

During 2018-19 payment made for Stationery was 40,000.
Solution 26

Question 27. Amount paid for sports materials during the year Rs. 20,000; sck of sports materials at the beginning and end of the year Rs. 3,300 and Rs. 2,900 respectively, credirs for sports materials at the beginning and end of the year Rs. 5,000 and Rs. 4,000 respectively. What amount will be recorded in Income & Expenditure Account?
Solution 27

Question 28. On the basis of following information, calculate the amount of stationery be shown in Income and Expenditure Account for the year ended 31st March, 2019.

		Rs.
I.	Sck of stationery on 1-4-2018	50,000
II.	Sck of stationery on 31-3-2019	40,000
III.	Amount paid for stationery during the year	2,00,000
IV.	Credirs for stationery on 1-4-2018	20,000
V.	Credirs for stationery on 31-3-2019	10,000

Solution 28

Question 29. From the following information, calculate the amount of stationery consumed ‘Shree Club’ for the year ended 31st March, 2018.

During the year credits were paid Rs.3,00,000.
Solution 29

Numerical Questions:-

Question 1. From the information given below, prepare Receipts and Payments Account of Modern Club, Janakpuri for the year ending on March 31, 2021:

	Rs.
Cash & Bank as on April 1, 2020	45,000
Subscriptions (including Rs. 8,000 for 2019-20 and Rs. 12,000 for 2021-22)	4,70,000
12% Investments purchased on April 1, 2020	1,50,000
Entrance fee received	15,000
Sports materials purchased	70,000
Furniture purchased	80,000
Sale of old furniture (Cost Rs.20,000)	5,000
Municipal Taxes	1,000
Printing and Stationery	24,000
Sale of old sports materials	6,000
General expenses (out of which Rs.2,000 is yet to be paid) Interest	20,000
Interest received on Investments	6,000
Tournament expenses	72,000
Salary paid	84,000
Postage and Courier	2,000

Solution 1
In the Books of Modern Club
Receipts and Payments Account
For the year ended 31^st Mar. 2021

Point of Knowledge:-
Sale of an asset may result in gain, if sale value is more than the book value; or loss, if sale value is less than the book value; or neither profit nor loss, if sale value is equal to the book value. Book Value of an asset as on the date of sale is determined after charging depreciation up to the date of sale. Sale Value is credited to the Asset Account while gain, if any, is credited or loss, if any is debited to the Income and Expenditure Account.

Question 2. From the following information, prepare Income and Expenditure A/c for the year ending on 31^st March, 2021 of an Entertainment Club:

Solution 2 In the Books Entertainment Club
Income and Expenditure Account
for the year ending 31^st march 2021

Point of Knowledge:-
Opening and Closing Balance: Opening balance of this account shows cash in hand and/or at bank in the beginning of the accounting period and closing balance shows cash in hand and/or at bank at the end of the accounting period.

Question 3. How will you deal with the Entrance Fees while preparing the final accounts for the year ended 31st March, 2017, in each of the following alternative cases:
Case 1. During the year 2016-17, Entrance Fees received Rs.1,50,000.
Case 2. During the year 2016-17, Entrance Fees received Rs.1,50,000. It is the policy of the club treat the Entrance Fees as revenue receipt.
Case 3. During the year 2016-17, Entrance Fees received Rs. 1,50,000. It is the policy of the club treat the Entrance Fees as capital receipt.
Case 4. During the year 2016-17, Entrance Fees received Rs. 1,50,000. According the policy of the club 40% of the Entrance Fees is be capitalised.
Solution 3

Point of Knowledge:-
Receipts and Payments Account is merely a summary of the transactions appearing in the Cash Book According to William Pickles, “Receipts and Payments Account” is nothing more than a summary of the cash book over a certain period, analysed and classified under suitable headings. It is the form of account most commonly adopted by the treasures of societies clubs, associations etc. when preparing the results of the year’s working.

Question 4. Show how will you deal with the following items in the final accounts of Chetak Club, Jaipur as at 31st March, 2019:

	Rs.
Prize Fund on 1st April, 2018	80,000
Interest on Prize Fund Investments	6,000
Prizes given	10,000
Prize fund Investments on 1st April, 2018	60,000
Donations for Prize Fund	25,000

Solution 4

Question 5. Show how would you deal with the following items while preparing the financial statements of a ‘Not-for-Profit organisation:

	Rs.
urnament Fund	2,00,000
Contribution received for urnament	40,000
urnament expenses	80,000
Interest received on urnament fund Investments	12,000
Receipts from urnament Tickets	20,000

Solution 5

Point of Knowledge:-
The Opening balance of cash in hand and at bank appears at the start of the Dr. side of Receipt and Payment account. It should not be taken to the Income and Expenditure Account but written on the assets side of the Opening Balance Sheet.
The Closing balance of cash in hand and at bank appears at the end of the Cr. side of Receipts and payments account. It should be taken to the Assets side of the closing balance sheet.

Question 6 (new). How will the following information of Patna Sports Club be presented in the Income and Expenditure Account for the year ended 31^st March, 2021 and its Balance Sheet as at that date?

Solution 6 (new)

Question 6. How the following items for the year ended 31st March, 2018 will be presented in the financial statements of Aisko Club:

Additional Information:
Interest Accrued on urnament Fund Investments Rs. 6,000.
Solution 6

Question 7 (new). Show the following information in the Income and Expenditure Account and the Balance Sheet of Madurai Sports Club as at 31^st March, 2021:

	Rs.
General Fund as at 1^st April, 2020	50,00,000
8% General Fund Investment as at 1^st April, 2020	30,00,000
Interest on General Fund Investments	1,00,000
Tournament Fund as at 1^st April, 2020	20,00,000
7% Tournament Fund Investments as at 1^st April, 2020	15,00,000
Interest on Tournament Fund Investments	70,000
Tournament Expenses	4,00,000
Proceeds from Sale of Tournament Ticket	3,10,000
Donation Received for Tournament	2,80,000
Donation	5,00,000
Entrance Fee	1,50,000
Life Membership Fee	2,40,000

Solution 7 (new).

Question 7. Show how will you deal with the following items while preparing the fine accounts of a N.P.O. for the year ending 31^st March, 2020:

	Rs.
Building Fund as on 01.04.2019	8,00,000
Donation received for Building during the year	12,00,000
Expenditure on Construction of Building during the year	7,00,000
Capital Fund as on 01.04.2019	10,00,000
Life membership fee received	50,000

The construction work is in progress and has not yet completed.
Solution 7

Point of Knowledge:-
Example of Outstanding Expenses:-
Rent paid during the year
Add: Closing Outstanding Rent
Less: Closing Outstanding Rent
Net amount to be transferred to the Dr. side of Income and Expenditure A/c
The amount of outstanding rent at the end of the year will also be shown on the liabilities side of the Closing Balance Sheet and the outstanding rent at the beginning of the year will be shown on the liabilities side of the Opening Balance Sheet.

Question 8. As per Receipts and Payments Account for the year ended on March 31, 2017, the subscriptions received were Rs. 6,00,000. Additional Information given is as follows:

1. Subscriptions outstanding on 1-4-2016 Rs. 60,000.
2. Subscriptions outstanding on 31-3-2017 Rs. 40,000.
3. Subscriptions Received in Advance as on 1-4-2016 Rs. 32,000.
4. Subscriptions Received in Advance as on 31-3-2017 Rs. 38,000.
Ascertain the amount of income from subscriptions for the year 2016-17 and show how relevant items of subscriptions will appear in opening and closing balance sheets.
Solution 8

Point of Knowledge:-
A subscription is an annual membership fee paid by the member. Such organisations’ primary source of revenue is this.
For example, a Kolhi & club got Rs. 2,00,000 in subscriptions in 2016-17, of which Rs. 30,000 relates to 2015-16 and Rs. 20,000 to 2017-18, and Rs. 60,000 is still owed at the end of the year.

Question 9. The Chennai Sports Club received Rs. 6,50,000 way of subscriptions during the year ended on March 31, 2017.

Additional information given is as follows:	Rs.
Subscription received in advance on 31-3-2017	10,000
Subscription outstanding on 1-4-2016 (Out of which 16,000 were received during 2016-17)	20,000
Subscription received in advance on 31-3-2016	7,500
Subscription outstanding for 2016-17	25,000

Show how the subscription will appear in Income and Expenditure Account.
Solution 9

Point of Knowledge:-
When determining the current period’s subscription, the previous period’s advance subscription and the current period’s outstanding subscription are added to the current period’s subscription. On the other hand, advance subscriptions for the next accounting period obtained during the current period, as well as outstanding subscriptions from the previous period, are deducted from the current period subscription.

Question 10. From the following information calculate the amount of subscription be credited the Income and Expenditure Account for the year 2016-17:

	Rs.
Subscriptions received during the year	50,000
Subscriptions outstanding on 31st March, 2016	20,000
Subscriptions outstanding on 31st March, 2017	6,000
Subscriptions received in Advance on 31-3-2016	8,000
Subscriptions received in Advance on 31-3-2017	9,000
Subscriptions of Rs.1,500 are still in arrears for the year 2015-16

Solution 10

Question 11. From the following information related a ‘Health Club’, calculate the amount of subscriptions received during the year ended 31st March, 2018.

	Rs.
Income from subscriptions for the year ended 31st March, 2018	1,20,000
Subscriptions received in advance during the year ended 31st March, 2018	10,000
Subscriptions outstanding on 1st April, 2017	27,000
Subscriptions outstanding on 31st March, 2018	22,000
Subscriptions received in advance on 1st April, 2017	8,000

Solution 11

Point of Knowledge:-
There will be a profit if the selling price is higher than the book price; there will be no profit if the selling price is lower than the book price; and there will be no profit or loss if the selling price is equal to the book price. The book value of an asset is calculated after depreciation has been applied up to the date of sale. The sale value is credited to the Asset Account, and any benefit or loss is debited to the Income and Expenditure Account.

Question 12.
(A)
From the following particulars, calculate amount of subscriptions be credited the Income & Expenditure Account for the year ended 31st March, 2019 and show the items in the Balance Sheet as at that date.

Solution 12
(A)

Opening and Closing Balance: Opening balance of this account shows cash in hand and/or at bank in the beginning of the accounting period and closing balance shows cash in hand and/or at bank at the end of the accounting period.

Question 12.
(B)
In the year ended 31st March, 2019, subscriptions received Prince Club, Delhi were Rs. 2,50,000 including Rs. 15,000 for the year ended 31st March 2018 and Rs.13,000 for the year ended 31st March, 2020. At the end of the 31st March, 2019, subscriptions outstanding for the year ended 31st March 2019 were Rs.25,000. The subscriptions due but not received at the end of the previous, i.e., 31st March, 2018 were Rs. 21,000, while subscriptions received in advance on the same date were Rs. 16,500.
Show how the subscriptions will appear in Income and Expenditure Account for the year ended 31st March, 2019 and in the Balance Sheet as at that date.
Solution 12
(B)

When determining the current period’s subscription, the previous period’s advance subscription and the current period’s outstanding subscription are added to the current period’s subscription. On the other hand, advance subscriptions for the next accounting period obtained during the current period, as well as outstanding subscriptions from the previous period, are deducted from the current period subscription.

Question 13. From the following information calculate the amount of subscription outstanding as on 31st March, 2017:
A club has 200 members each paying an annual subscription of Rs. 1,000. The Receipts and Payments Account for the year showed a sum of Rs. 2,05,000 received as subscriptions. The following additional information is provided:
Solution 13

Point of Knowledge:-
Subscription Outstanding at the end of the current year:- It will be (i) added to the amount of subscription on the credit side of the income and expenditure account and (ii) will also be shown on the assets side of the closing balance sheet.

Question 14. Subscriptions received during the year ended March 31,2017 Hyderabad Art Club were as under:

Additional Information :
tal number of members 240.
Annual Subscription fee Rs.500.
Subscriptions Outstanding on April 1, 2016 Rs. 9,000.
Show the amount of subscription in Income and Expenditure Account for the year ended 31st March 2017 and in the Balance Sheet as at that date.
Solution 14

Working Note:-
tal subscription received during the year 2016-17 Rs. 1,20,000
Less: Amount received during the year 2016-17 Rs. 1,08,000
Outstanding subscriptions for the year 2016-17 Rs. 12,000

Question 15. From the following extract of Receipts and Payments Account and the additional information given below, compute the amount of income from subscriptions and show as how they would appear in the Income and Expenditure Account for the year ending March 31, 2017 and the Balance Sheet as at that date:

Additional Information:
Rs.

Subscriptions outstanding March 31, 2016 10,000
tal Subscriptions outstanding March 31, 2017 25,000
Subscriptions received in advance as on March 31, 2016 4,000

Solution 15

Question 16 (new). Calculate the amount of subscription to be credited to Income and Expenditure Account for the year ended 31^st March 2020:

Particulars	Amount
(a) Subscription in arrears as on 1^st April 2019 (out of which Rs. 5,000 was not recoverable)	45,000
(b) Total Subscription received during the year ended 31^st March, 2020 (including Rs. 32,000 for 2018-19, Rs. 30,000 for 2020-21, Rs. 20,000 for 2021-22 and Rs. 5,000 for 2022-23)	6,00,000
(c) Subscription received in advance as on 1^st April 2019 (including Rs. 10,000 for 2020-21)	30,000
(d) Subscription in arrears as on 31^st March, 2020	70,000

Solution 16 (new).

Question 16. Following is the Receipts and Payments Account of Star Club for the year ended 31st March, 2019:

Receipts	Rs.	Payments	Rs.
Balance b/d on 1-4-2018	4,400	Salaries	18,200
Subscriptions	46,100	Rent	15,000
Interest	2,500	Printing and Stationery	7,300
urnament Fund	12,000	Expenses on Charity Show	16,100
Donation	6000	urnament Expenses	7,500
Donation for Building extension	20,000	Investments purchased	10,000
Receipts from advertisement		Furniture	6,000
in the year book	5200	Balance c/d on 31-3-2010	16,100
	96,200		96,200

Subscriptions outstanding on 31st March, 2018 were Rs. 4,500 and on 31st March, 2019 were Rs.6,000. Rent outstanding at the beginning of the year was Rs. 1000 and in the end was Rs. 1,500. Furniture was purchased on 1st July, 2018.
On 1st April, 2018 the Club had Furniture valued Rs. 8000 and Investments valued Rs. 15,000.
Prepare Income and Expenditure A/c for the year ended 31st March, 2019 and a Balance Sheet as at that date, after depreciating furniture 10% p.a.
Solution 16

Point of Knowledge:-
Outstanding Subscription:- It will be (i) deducted from the amount of subscription on the credit side of income and expenditure account, and (ii) will also be shown on the assets side of the opening balance sheet.

Question 17. From the following Receipts and Payments account of a Club, prepare Income & Expenditure Account for the year ended 31st March 2019 and a Balance Sheet as at that date:

Subscriptions include Rs. 3,200 for the last year, rent include Rs. 900 paid for the last year. Subscriptions outstanding of the current year are Rs. 4,500. Rent outstanding for the month of March, 2019 is Rs.1,000 and a payment for stationery is also due for Rs. 250.
On 1-4-2018, Club had land valued Rs. 50,000 and furniture valued at Rs.15,000.
Solution 17

Point of Knowledge:-
A Balance Sheet is also prepared even by non-profit organisation;s to show the financial position on the last date of the accounting year. It is prepared from the balance remaining after the transfer of all revenue incomes and expenditures to the income and expenditure account.

Question 18. From the following Receipts and Payments Account of Rolaxe Club, for the year ended 31st March, 2019, prepare Income and Expenditure Account for the year ended 31st March, 2019.

Additional Information:-
(i) Depreciate furniture 15% p.a.
(ii) There were 416 Life Members on 31.3.2018 the subscription payable each member, be a life time member is Rs. 125.
(iii) Subscription outstanding on 31st March, 2018 6,000
Subscription outstanding on 31st March, 2019 7,000
Subscription received in advance on 31st March, 2018 4,000
Subscription received in advance on 31st March, 2019 5,000

Solution 18

Point of Knowledge:-
General Donation of small amount is shown on the credit side of the Income and Expenditure Account because small donations can be expected every year. Whether the amount of donation is big or small depends on the size and nature of the institution.
Question 19. Following is the Receipts and Payments Account of Rajdhani Club for the year ended 31st March, 2015 :

Depreciate furniture 20% and Sports Equipment 30%
You are required prepare an Income and Expenditure Account for the year ended 31st March, 2015 and a Balance Sheet as at that date.
Solution 19

Point of Knowledge:-
It is an income pertaining to the next year. As such, it will be (i) deducted from the amount of subscription on the credit side of Income and Expenditure Account and (ii) will also be shown on the liabilities side of the closing balance sheet

Question 20. Following is the Receipt and Payment of Chennai Sports Club for the year ended 31-3-2014:

Receipts	Rs.	Payments	Rs.
Balance b/d	5,000	Salary	12,000
Subscriptions	26,000	Furniture	10,000
Entrance Fee	4,000	Office Expenses	8,000
urnament Fund	15,000	urnament Expenses	21,000
Sale of old newspapers	2,000	Sports Equipment	20,000
Legacy	35,000	Balance c/d	16,000
	87,000		87,000

Other Information:
On 31-3-2014 subscription outstanding was Rs. 4,000 and on 31-3-2013 subscription outstanding was Rs. 3,000. Salary outstanding on 31-3-2014 was Rs. 2,000.
On 1-4-2013 the club had building Rs. 80,000, furniture Rs. 20,000, 10% investments Rs. 45,000 and sports equipment Rs. 25,000. Depreciation charged on these items including purchases was 10%.
Prepare Income and Expenditure Account of the Club for the year ended 31-3-2014 and ascertain the Capital Fund on 31-3-2013. Also prepare a Balance Sheet as at 31st March, 2014.
Solution 20

Point of Knowledge:-
Any receipt related to a specific fund or reserve is treated as capital receipt such as Charity Fund. Match Fund, Prize fund, Sports Fund, Tournament Fund, Pension Fund etc. All these reserves or fund should be shown on the liabilities side of the balance sheet after deducting the expenses in respect of these funds.

Question 21. Calculate the amount of medicines consumed be debited Income & Expenditure Account for the year ended 31st March, 2019:

Particulars	Amount
Opening Sck of Medicines	50,000
Closing Sck of Medicines	45,000 more than opening sck
Amount paid for medicines during the year	2,00,000
Opening Credirs	20,000
Closing Credirs	50% of opening credirs

Solution 21

Point of Knowledge:-
Amount paid for during the year
Add: Opening Stock
Less: Closing Stock
Less: Opening Creditors
Add: Closing Creditors
Amount during the year 2018-19

Question 22 (new). Following is the Receipts and Payments Account of Rajdhani Club for the year ended 31^st March, 2021 :

Receipts	Rs.	Payments	Rs.
To Balance b/d : (01-04-2020) Cash in hand Cash in Deposit Account Cash in Current Account	4,000 16,000 5,200	By Staff Salary By Canteen Expenses By Misc. Expenses By Insurance	35,400 3,500 800 2,000
To Subscriptions	80,000	By Telephone Expenses	4,800
To Entrance Fees	12,000	By Furniture Purchased	15,000
To Life Membership Fees	15,000	By Investments Purchased	46,000
To Newspapers (Sales) To Canteen Collections To Interest on Deposits	200 4,400 1,600	By Balance c/d (31-03-2021): Cash in hand Cash in Deposit Account Cash in Current Account	6,700 20,000 4,200
	1,38,400		1,38,400

Additional Information :	31-3-2020 Rs.	31-3-2021 Rs.
(i) Outstanding Subscriptions	7,000	5,600
(ii) Subscriptions Received in advance	2,000	2,500
(iii) Salaries Outstanding	1,200	1,800
(iv) Furniture	10,000	—
(v) Sports Equipment	20,000	—

Depreciate furniture by 20% and Sports Equipment by 30% You are required to prepare an Income and Expenditure Account for the year ended 31st March, 2021 and a Balance Sheet as at that date.

Solution 22 (new).

Question 22. On the basis of the information given below calculate the amount of Sports Materials be debited the ‘Income and Expenditure Account’ of Durga Sports Club for the year ended 31-3-2019:

Sports Materials purchased during the year ended 31-3-2019 were Rs. 4,94,000.
Solution 22

Working Note:-
Credirs for Sports Materials will be ignored because purchased of sports materials given in the question.

Question 23 (new). Following is the Receipt and Payment of Chennai Sports Club for the year ended 31-3-2021

Receipts	Rs.	Payments	Rs.
Balance b/d	5,000	Salary	12,000
Subscriptions	26,000	Furniture	10,000
Entrance Fee	4,000	Office Expenses	8,000
Tournament Fund	15,000	Tournament Expenses	21,000
Sale of old newspapers	2,000	Sports Equipment	20,000
Legacy	35,000	Balance c/d	16,000
	87,000		87,000

Other Information:

On 31-3-2021 subscription outstanding was Rs. 4,000 and on 31-3-2020 subscription outstanding was Rs. 3,000. Salary outstanding on 31-3-2021 was Rs. 2,000.
On 1-4-2020 the club had building Rs. 80,000, furniture Rs. 20,000, 10% investments Rs. 45,000 and sports equipment Rs. 25,000.
Depreciation charged on these items including purchases was 10%.
Prepare Income and Expenditure Account of the Club for the year ended 31-3-2014 and ascertain the Capital Fund on 31-3-2021. Also prepare a Balance Sheet as at 31st March, 2014.

Solution 23 (new).

Question 23. Calculate what amount will be posted Income & Expenditure A/c for the year ending 31st March 2015 :

	Rs.
(i) Sck of stationery on 1st April, 2014	7,000
(ii) Credirs for stationery on 1st April, 2014	4,000
(iii) Advance paid for stationery carried forward on 1st April 2014	6,000
(iv) Sck of stationery on 31st March, 2015	3,000
(v) Credirs for stationery on 31st March, 2015	8,000
(vi) Advance paid for stationery on 31st March, 2015	1,500
(vii) Amount paid for stationery during 2014-15	42,000

Solution 23

Point of Knowledge:-
Amount paid for during the year
Add: Opening Stock
Less: Closing Stock
Less: Opening Creditors
Add: Closing Creditors
Amount Consumed during the year

Question 24. Calculate the amount that will appear against the item Stationery Account, in the Income & Expenditure Account for the year ended 31st March, 2019:

During 2018-19, the payment made these credirs amounted Rs. 1,62,000. Stationery purchased in cash during the year was 25% of the tal purchase of Stationery.
Solution 24

Calculation of Stationery consumed be Debited Income & Expenditure:-
tal Purchases 2,40,000
Add: Sck of Stationery in the beginning 30,000
Less: Sck of Stationery at the end 25,000
2,45,000

Calculation of Cash Purchase of Stationery:-
Let tal Purchases is Rs. 100
Cash Purchases will be Rs. 25
Credit Purchases Rs. 75
If Credit Purchase is Rs. 1,80,000 Cash Purchases = Rs. 1,80,000 × 25/75
Cash Purchases = Rs. 60,000
tal Purchases = Credit Purchases + Cash Purchases
tal Purchases = Rs. 1,80,000 + Rs. 60,000
tal Purchases = Rs. 2,40,000

Point of Knowledge:-
There are some items, of which the opening and closing stock is given in the question and also the payment made for such items is given in the Receipts and Payments Account. Such items are known as ‘Consumable Goods’. In other words, the items are consumed during the year such as Foodstuffs, Medicines, Sports Materials, Postage, Stationery etc. The amount to be shown in income and expenditure account in respect of such items will be calculated as follows:-

Question 25. How are the following items treated while preparing the final accounts of a club for the year ended 31st March, 2019:

Point of Knowledge:-
If the total credit side of the income and expenditure Account exceeds the debit, the difference will be termed as surplus or excess of income over expenditure and will be added to the Capital Fund on the liabilities side of the Balance Sheet. On the contrary, if the debit side of the income and expenditure account exceeds the credit, the difference is known as deficit or excess of expenditure over income and will be deducted from the Capital Fund on the liabilities side.

Question 26 (new). Calculate what amount will be posted to Income & Expenditure A/c for the year ending 31^stMarch 2021

	Rs.
(i) Stock of stationery on 1st April, 2020	7,000
(ii) Creditors for stationery on 1st April, 2020	4,000
(iii) Advance paid for stationery carried forward on 1st April 2020	6,000
(iv) Stock of stationery on 31st March, 2021	3,000
(v) Creditors for stationery on 31st March, 2021	8,000
(vi) Advance paid for stationery on 31st March, 2021	1,500
(vii) Amount paid for stationery during 2020-21	42,000

Solution 26 (new).

Question 26. The following is the Receipts and Payments Account of Shri Mahbir Sports Club for the year ended 31^st March, 2014 :

(v) The tal furniture on 1st April, 2013 was worth Rs. 20.000 and book value of furniture sold was Rs. 5,000. Charge depreciation @ 10% on closing balance of furniture.
Prepare an Income and Expenditure Account for the year ended 31st March, 2014 and a Balance Sheet as at that date.
Solution 26

Question 27. Following is the Receipts and Payments Account of Maharaja Aggarsain Club, Bhiwani for the year ended 31st March, 2015 :

Other Information :
(i) Assets on 1-4-2014 were: Land and Building Rs. 1,50,000; Sck of foodstuffs Rs. 2,200 and unused postage stamps 800.
(ii) Subscription due on 31-3-2014 was Rs. 2,400 and on 31-3-2015 (for 2014-15) was Rs. 3,500.
(iii) On 31st March, 2015 sck of foodstuffs was Rs. 3,800 and unused postage stamps were of the value of Rs. 600.
(iv) The -laws of the club provide that 60% of the Entrance fees and 20% of the surplus of any year are be transferred Reserve Fund.
Prepare an Income and Expenditure Account of the club for the year ended 31st March, 2015 and a Balance Sheet as at that date.
Solution 27

Point of Knowledge:-
In the absence of any specific instructions in the examination, entrance fees may be treated as revenue receipt and as such may be shown on the credit side of Income and Expenditure Account.
However, if an instruction is given in the question to treat it as ‘Capital Receipt’ it should be shown on the liabilities side of current year’s Balance Sheet.

Question 28. From the following Receipt and Payment Account and additional information of Ashoka Club for the year ended 31-3-2017 prepare:
(i) Income and Expenditure Account of the Club for the year ended 31-3-2017 and
(ii) Prepare the Balance Sheet as at 31-3-2017.

Additional Information:
(i) Subscriptions outstanding as on 31-3-2016 were Rs. 3,000 and on 31-3-2017 Rs. 6,000.
(ii) On 31-3-2016 salary outstanding was Rs. 900 and on 31-3-2017 salary outstanding was Rs.1,200.
(iii) The Club owned furniture Rs. 30,000 and books Rs. 14,000 on 01-04-2016.
Solution 28

Point of Knowledge:-
A Balance Sheet is also prepared even by non-profit organisations to show the financial position on the last date of the accounting year. It is prepared from the balance remaining after the transfer of all revenue incomes and expenditures to the income and expenditure account.

Question 29 A (new). From the following information, calculate the amount to be charged to Income and Expenditure Account for ‘Sports Material Consumed’ for the year 2019-20.

Particulars	Amount
Stock of Sports material (01.04.2019)	60,000
Amount paid to creditors (during 2019-20)	3,00,000
Creditors for Sports Materials (01.04.2019)	1,00,000
Creditors for Sports Materials (31.03.2020)	80,000
Sports Material sold during the year (Book Value Rs. 35,000)	15,000
Cash Purchases of Sports Material (During the year 2019-20)	1,30,000

There was zero stock at the end of financial year 2019-20.

Solution 28 A (new). Calculation of Sports Material Consumed to be Debited to Income and Expenditure A/c:-

Points of Knowledge:-
Calculation of the Cost of Consumable Goods:-

Question 29 B (new). How are the following items treated while preparing the final accounts of a club for the year ended 31^st March, 2019:

Solution 28 B (new). Calculation of Sports Material Consumed to be Debited to Income and Expenditure A/c:-

Assets side of the balance sheet stock of sports materials = Rs. 1,50,000
Liabilities side of the balance sheet creditors of sports materials = Rs. 60,000

Question 29. From the following Receipt and Payment A/c of a charitable dispensary, prepare Income and Expenditure A/c for the year ended on 31st March, 2019:

Additional Information:
(i) Subscription of Rs. 1,500 is still in arrear for the year ended 31st March, 2018.
(ii) Subscription Outstanding as at 31st March, 2019 Rs. 41,500.
(iii) Sck of medicines on 31st March, 2018 was Rs. 6,000 and on 31st March, 2019 was Rs.10,000.
(iv) One month rent is outstanding.
(v) Depreciation on Machinery be charged @ 10% p.a.
Prepare Income & Expenditure Account for the year ended 31st March, 2019.
Solution 29

Working Note:-
Outstanding Subscription = Rs. 41,500 – Rs. 1,500 = Rs. 40,000

Question 30 (new). The following is the Receipts and Payments Account of Shri Mahbir Sports Club for the year ended 31st March, 2021 :

(v) The total furniture on 1^stApril, 2020 was worth Rs. 20.000 and book value of furniture sold was Rs. 5,000. Charge depreciation @ 10% on closing balance of furniture. Prepare an Income and Expenditure Account for the year ended 31^st March, 2021 and a Balance Sheet as at that date

Solution 30 (new).

Question 30. Following is the Receipts and Payments Account of Citizen Club for the year ended 31st March, 2018 :

Prepare Income and Expenditure Account for the year ending 31st March, 2018 and the Balance Sheet as at that date after considering the following information :
(i) Subscription in arrears on 31st March, 2017 were Rs. 30,000 and on 31st March 2018 were Rs. 48,000.
(ii) Sck of stationery on 31st March, 2017 was Rs. 5,000 and on 31st March, 2018 Rs. 14,000.
(iii) Insurance was paid on 1st January 2018 run for one year.
Solution 30

Question 31 (new). Following is the Receipts and Payments Account of Maharaja Aggarsain Club, Bhiwani for the year ended 31st March, 2021 :

Other Information :
(i) Assets on 1-4-2020 were: Land and Building Rs. 1,50,000; Stock of foodstuffs Rs. 2,200 and unused postage stamps 800.
(ii) Subscription due on 31-3-2020 was Rs. 2,400 and on 31-3-2015 (for 2020-21) was Rs. 3,500.
(iii) On 31st March, 2021 stock of foodstuffs was Rs. 3,800 and unused postage stamps were of the value of Rs. 600.
(iv) The By-laws of the club provide that 60% of the Entrance fees and 20% of the surplus of any year are to be transferred to Reserve Fund.
Prepare an Income and Expenditure Account of the club for the year ended 31st March, 2021 and a Balance Sheet as at that date

Solution 30 (new).

Question 31. From the following information, show the salaries item in the Income and Expenditure Account for the year ending 31^st March, 2016 and in the Balance Sheet as at 31^stMarch, 2015 and 31^st March, 2016:

Solution 31

Point of Knowledge:-
Subscription Amount during the year
Add: Received in advance in previous year
Less: Received in advance in current year
Less: Outstanding in previous year
Total Subscription

Question 32. From the following particulars relating Rama Krishna Mission Charitable Hospital, prepare Income and Expenditure account for the year ended 31^st March, 2019 and a balance sheet as at that date:

Solution 32

Working Note: –
Calculation of Investment
Investment = Interest × 100/Rate
Investment = Rs. 70,000 × 100/7
Investment = Rs. 10,00,000

Point of Knowledge:-
Sometimes, an Income and Expenditure Account is given in the question and the students are required to prepare Receipt and Payment Account with its help. It is worth repeating here that all receipts of cash whether capital or revenue and whether it is for current or previous or future period should be debited to receipts and payments account. Similarly, all expenditures whether capital or revenue or relating to the current, previous or future period should be credited to Receipts and Payments account.

Question 33. From the following Receipts and Payments Account of National Sports Club and from the given additional information, show the salaries item in the Income and Expenditure Account for the year ending 31st March, 2016 and the Balance sheet as at 31st March, 2015 and 31st March, 2016.

Solution 33

Point of Knowledge:-
Amount paid for during the year
Add: Opening
Less: Closing
Amount during the year

Question 34 (new). From the given Receipts and Payments Account and additional information of friends Club for the year ended 31^st March, 2019, prepare Income and Expenditure Account for the year ending 31^st March, 2019.

Additional Information:-
(i) On 1^st April, 2018, the Club had the following balances of assets and liabilities:
Furniture Rs. 1,00,000, Subscriptions in arrears Rs. 2,000 and Outstanding Salary Rs. 6,000.
(ii) The club had 75 members each paying an annual subscription of Rs. 1,000. (iii) Charge depreciation on furniture @ 10% p.a.

Solution 34 (new).

Working Note:-
Calculation of depreciation on furniture:-

Question 34. Following is the Receipt and Payments Account of Natraj Literary Society, Hyderabad for the year ended 31st March, 2016 :

Additional Information :
(1) There are 400 members each paying an annual subscription of Rs. 100.
(2) On 31st March, 2015, the trust owned Buildings Rs. 75,000; Furniture Rs. 10,000; Books Rs. 6,000 and 12% Bonds Rs. 10,000.
(3) Salaries of Rs. 1,500 for March, 2016 were not paid until 7th April, 2016.
(4) Journey income receivable Rs. 400.
(5) Charge depreciation @ 10% p.a. on Buildings and mowing machine and 20% p.a. on the closing balance of furniture and books.
(6) It was decided treat one-half of the amounts received on account of donations as income.
Prepare Income and Expenditure Account for the year ending 31st March, 2016 and a Balance Sheet as at that date.
Solution 34

Question 35 (new). From the following Receipt and Payment A/c of a charitable dispensary, Prepare Income and Expenditure A/c for the year ended on 31^st March, 2019:

Additional Information:
(i) Subscription of Rs. 1,500 is still in arrear for the year ended 31^st March, 2018.
(ii) Subscription Outstanding as at 31^st March, 2019 Rs. 41,500.
(iii) Stock of medicines on 31^st march, 2018 was Rs. 6,000 and on 31^st March, 2019 was Rs. 10,000.
(iv) One month rent is outstanding.
(v) Depreciation on Machinery to be charged @ 10% p.a.
Prepare Income & Expenditure Account for the year ended 31^st march, 2019.

Solution 35 (new).

Working Note:-
Calculation of depreciation:-
Machinery purchased on 01.oct.2018:-

Question 35. The following is the receipts and payment account of the Rajasthan Society for the year ending 31st March, 2020:

Additional Information :
(i) There are 600 members each paying a monthly subscription of Rs. 10; Rs. 1800 being in arrear for 2018-19 at the beginning of the year.
(ii) A donation of Rs. 2,500 was wrongly included in subscriptions of the current Year.
(iii) Entire Donation and 2/3 of Entrance fee are be capitalised.
(iv) Insurance Premium was paid in advance for three months.
(v) Interest on Investments Rs. 300 though accrued was not actually received.
(vi) A bill of medicine purchased during the year amounting Rs. 200 was outstanding.
(vii) Gujarati cultural association owed Rs. 2,000 for the use of society hall.
You are required prepare an Income and Expenditure Account for the year ended 31st March, 2020 and a Balance Sheet as at that date.
Solution 35

Question 36. Given below is the Receipts and Payments Account of ‘Old Men Association Club’ for the year ended on 31-3-2017:

Prepare Income and Expenditure Account for the year ended 31st March, 2017 and the Balance Sheet as at that date, after taking the following information in account:
(a) There are 500 members each paying an annual subscription of Rs. 50, and Rs. 500 is still in arrear for 2015-16.
(b) Rs. 1,000 for salaries is outstanding.
(c) Building stands in the books at Rs. 50,000 and it is required write off depreciation at 5% p.a.
(d) Interest on Investments is accrued for 5 months.
Solution 36

Working Note: –
tal subscriptions receivable during the year 16-17 (500 × 50) 25,000
Less: Amount received during the year 2016-17 20,500
Outstanding subscriptions for the year 2016-17 4,500
Point of Knowledge:-
Subscription Amount during the year
Add: Received in advance in previous year
Less: Received in advance in current year
Less: Outstanding in previous year
Total Subscription

Question 37. From the following Receipts and Payments A/c of Dramatic & Sports Club Ambala, prepare an Income and Expenditure A/c for the year ended 31st March, 2020 and a Balance Sheet as at that date

Information’s:
(a) The club has 600 members, each paying an annual subscription of Rs. 100. In 2018-19 ten members had paid their subscription for 2019-20 as well.
(b) Balance of sports materials on 31 March, 2020 was Rs. 3,600.
(c) The Club had buildings amounting Rs. 1,20,000 worth Rs. 1,80,000 on 1-4-2019.
Solution 37

Question 38 (new). From the following information, show the salaries item in the Income and Expenditure Account for the year ending 31st March, 2021 and in the Balance Sheet as at 31st March, 2020 and 31st March, 2021:

Additional Information;
(i) Salaries outstanding on 31st March, 2020 Rs. 15,000
(ii) Salaries outstanding on 31st March, 2021 Rs. 25,000
(iii) Salaries paid in advance on 31st March, 2020 Rs. 12,000
(iv) Salaries paid in advance on 31st March, 2021 Rs. 10,000

Solution 38 (new).

Question 38. Following is the Receipts and Payments Account of Chennai Sports Club:

Prepare Income and Expenditure Account for the year ended 31st March, 2019 and a Balance Sheet as at that date after the following adjustments:
(i) Subscriptions received during the year included Rs.10,000 from a life member and a Donation of Rs. 50,000 received for Building Fund.
(ii) Book value of Defence Bonds sold was Rs. 30,000; Rs.60,000 of Defence Bonds were still in hand.
(iii) Municipal Taxes amounted Rs. 20,000 per year is paid up 30th June.
(iv) Rent Rs. 5,000 is related the year ended 31st March 2018 and Rs. 2,500 is still owing.
(v) It was decided treat 40% of the amount received on account of Legacies and Donations as income.
(vi) On 1st April 2018, the club owned furniture Rs. 1,10,000; Furniture is valued at Rs.1,05,000 on 31st March, 2019.
Solution 38

Point of Knowledge:-
A receipt and payment account is prepared at the end of the year from the Cash Book. All receipts and payments which are entered in the cash book are also entered in the receipts and payments account, of course, in a summary form. For example, if a club received subscriptions from its members on different dates, they will be recorded in the cash book in a chronological order, whereas the Receipt and Payment Account will contain the total subscriptions received during the year. Any transaction which is not recorded in the Cash Book will not be entered in the receipt and payment account also.
If the total credit side of the income and expenditure Account exceeds the debit, the difference will be termed as surplus or excess of income over expenditure and will be added to the Capital Fund on the liabilities side of the Balance Sheet. On the contrary, if the debit side of the income and expenditure account exceeds the credit, the difference is known as deficit or excess of expenditure over income and will be deducted from the Capital Fund on the liabilities side

Question 39 (new). From the following Receipts and Payments Account of National Sports Club and from the given additional information, show the salaries item in the Income and Expenditure Account for the year ending 31st March, 2016 and the Balance sheet as at 31st March, 2015 and 31st March, 2021.

Additional Information: Rs.
(i) Salaries outstanding on 31st March, 2020 40,000
(ii) Salaries outstanding on 31st March, 2021 62,000
(iii) Salaries paid in advance on 31st March, 2020 18,000

Solution 39 (new).

Question 39. Show how would you deal with the following items in the final accounts of a Club:

Solution 39

Point of Knowledge:-
Capital Receipts are those receipts which will yield benefits to the entity in the current year as well as in future years. They are of non-recurring nature or in other words, they are not received at regular intervals.
Amount paid for during the year
Add: Opening Stock
Less: Closing Stock
Amount Consumed during the year

Question 40. Show how will you deal with the following items while preparing the Balance Sheet of a Club as at 31st March, 2018:

	Rs.
Match Fund	6,00,000
8% Match Fund Investments	5,00,000
Interest received on Match Fund Investments	30,000
Expenses on Matches	20,000
Donations for Match Fund	1,50,000
Match Prizes awarded	90,000

Solution 40

Working Note:-
Interest Accrued shown on the assets side Rs. 10,000.

Question 41. Receipts and Payments Account of Shimla Sports Club showed that Rs. 82,000 were received way of subscriptions for the year ended on March 31, 2016.
The additional information was as under:
Subscription Outstanding as on March 31, 2015 were Rs. 8,400
Subscription Outstanding as on March 31, 2016 were Rs. 9,200
Subscription received in advance as on March 31, 2015 were Rs. 3000.
Subscription received in advance as on March 31, 2016 were Rs. 5,000.
Show how the above information would appear in the final accounts for the year ended on March 31, 2016.
Solution 41

Point of Knowledge:-
Subscription Amount during the year
Add: Received in advance in previous year
Less: Received in advance in current year
Less: Outstanding in previous year
Total Subscription

Question 42. Subscriptions received during the year ended March 31, 2016 a Club were as under:
2014-15 1,500
2015-16 44,000
2016-17 4,000
49,500
The club has 100 members each paying @ Rs. 500 as annual subscription. Subscriptions outstanding as on March 31, 2015 were Rs. 2,500. Calculate the amount of subscriptions be shown as income in the Income and Expenditure Account for the year ended March 31, 2016 and show the relevant data in the Balance Sheet as at 31st March, 2015 and 2016.
Solution 42

Point of Knowledge:-
ncome and Expenditure Account is similar of a profit and loss account of a profit seeking entity and is prepared to ascertain whether the current income are in excess of current expenditure or vice-versa. In other words, it reveals the surplus or deficit arising out of the organisation’s activities during a particular period. It is prepared in the same manner in which a Trading and Profit and Loss Account is prepared in case of trading organisations.

Question 43. From the following information of Gems Club, prepare Income Expenditure Account for the year ended 31st March, 2018.

Receipts	Rs.	Payments	Rs.
Balance b/d	50,000	Furniture	1,30,000
Interest on Investments	2,400	Salaries	64,500
Donations	17,000	Miscellaneous Expenses	52,000
Subscriptions	3,00,000	Telephone Charges	12,000
Rent Received	70,000	Fax Machine	6,000
Sale of old newspapers	600	6% Investments (on 1.8.2017)	1,00,000
		Printing and Stationery	19,000
		Balance c/d	56,500
	4,40,000		4,40,000

Additional Information:
Subscriptions received included Rs. 15,000 for 2018-19. The amount of subscriptions outstanding on 31st March, 2018 were Rs. 20,000. Salaries unpaid on 31st March 2018 were Rs.8,000 and Rent receivable was Rs. 2,000. Opening sck of printing and stationery was Rs. 12,000, whereas closing sck was Rs. 15,000.
Solution 43

Question 44. The Young Association submits you its Receipts and payments Account for the year ending on 31st March, 2019. You are required prepare the Income and Expenditure Account for the year and the Balance Sheet as at that date.

The Association also gives the following information :
(i) The Association holds 6% Government Securities amounting Rs. 40,000 on 1st April, 2018
(ii) The Library Account (Books) sod at Rs. 20,000 on 1st April, 2018.
(iii) Half of the donations received is be transferred the Capital Fund.
(iv) Rent Rs. 300 is still payable.
Solution 44

Point of Knowledge:-
Income and Expenditure Account is similar of a profit and loss account of a profit seeking entity and is prepared to ascertain whether the current income are in excess of current expenditure or vice-versa. In other words, it reveals the surplus or deficit arising out of the organisation’s activities during a particular period. It is prepared in the same manner in which a Trading and Profit and Loss Account is prepared in case of trading organisations.
A Balance Sheet is also prepared even by non-profit organisations to show the financial position on the last date of the accounting year. It is prepared from the balance remaining after the transfer of all revenue incomes and expenditures to the income and expenditure account

Question 45. Calculate the amount of medicines be debited in the Income and Expenditure Account of a Hospital on the basis of the following information :

Solution 45

Question 46 (new). Receipts and Payments Account of Shimla Sports Club showed that Rs. 82,000 were received by way of subscriptions for the year ended on March 31, 2021.
The additional information was as under:
Subscription Outstanding as on March 31, 2020 were Rs. 8,400
Subscription Outstanding as on March 31, 2021 were Rs. 9,200
Subscription received in advance as on March 31, 2020 were Rs. 3000.
Subscription received in advance as on March 31, 2021 were Rs. 5,000.
Show how the above information would appear in the final accounts for the year ended on March 31, 2021.

Solution 46 (new).

Question 46. From the following information calculate the amount of medicines posted Income and Expenditure Account of Sargam Hospital for the year ending 31st March, 2018 :

Medicines purchased during the year ended 31st March, 2018 was Rs. 1,00,000.
Also, present the relevant items in the Balance Sheet of Sargam Hospital as at 31st March 2018.
Solution 46

Question 47 (new). From the following information, calculate the amount of subscription to be credited in the Income and Expenditure Account of Bharat Sports Club for the year ending 31.03.2018.

During the year, the club received Rs. 1,20,000 as subscription which included Rs. 5,000 for the year ending 31^st March, 2017.

Solution 47 (new). Calculation of Subscription credited to Income and Expenditure A/c:-

Question 47. Prepare an Income and Expenditure Account for the year ended 31st March 2016 and the Balance Sheet as at that date from the following Receipts and payments Account of a Club and from the information supplied :

Information’s:
(i) The club has 50 members, each paying annual subscription of Rs. 250.
Subscriptions outstanding on 1st April, 2015 were Rs. 3,000.
(ii) On 31st March, 2016, Salaries outstanding amounted Rs. 1,000. Salaries paid included Rs. 1,000 for the year 2014-15.
(iii) General Expenses include Insurance which is prepaid the extent of Rs. 100.
(iv) On 31st March, 2015, the club owned Land and Building valued at Rs. 1,00,000, Furniture Rs. 6,000 and Books Rs. 5,000.
(v) 40% of Entrance Fees is be capitalised.
Solution 47

Question 48. From the following information, prepare Income and Expenditure A/c for the year ending on 31st March, 2016 and a Balance Sheet as at that date, of an Entertainment Club:

The Club had 500 members, each paying an annual subscription of Rs. 100, Rs. 4,500 were outstanding subscriptions at the end of previous year and five members had paid their subscription for 2015-16 as well in the previous year itself. On 31st March, 2016 outstanding salaries were Rs.1,500 and prepaid salaries were Rs. 2,000. 50% of the Entrance fees is revenue income and Donations and Life Membership fees are be capitalized Accrued interest at the end of the year was Rs. 1,200. At the end of the year Sck of Sports Material was Rs. 5,000 and sck at the refreshment room was Rs. 1,600.
Solution 48

Question 49. Convert the following Receipts and Payment Account of the Delhi Nursing Society for the year ended 31st March, 2017 in the Income and Expenditure Account:

A donation of Rs.100 received for Building Fund was wrongly included in the subscription Account. A bill of medicines purchased during the year amount Rs.128 was outstanding.
Solution 49

Question 50 (new). Namanjyot Society showed the following position:

Additional Information:-
(i) Computers were to be depreciated @60% p.a. and furniture @ 10% p.a.
(ii) Membership subscription included Rs. 20,000 received in advance.
(iii) Electric charges outstanding Rs. 10,000.
Prepare Income and Expenditure Account for the year ended 31^st March, 2018.

Solution 50 (new).

Working Note:-
1. Calculation of Depreciation:-
Computer purchased on 01.10.2017:-

2. Calculation of Interest on investment:-

Question 50. Following is the Receipts and Payments Account of a Club for the year ended 31st March, 2020:

Additional Information:
(1) Outstanding subscription for 2019-20 Rs. 80,000.
(ii) Outstanding salaries as on 1st April, 2019 were Rs.2,000 and as at 31st March, 2020 were Rs. 4,000.
(iii) Locker Rent rate is Rs. 2,000 per month.
(iv) Depreciation on sports equipment @10% p.a.
Prepare Income and Expenditure Account of the Club for the year ended 31st March, 2020.
Solution 50

Question 51. From the following information supplied the accountant of Lions Club for the year ended 31st March 2020, prepare Income and Expenditure Account and Balance Sheet :

Additional Information:
(a) The club has 400 members each paying an annual Subscription still outstanding for 2018-19 are Rs.200
(b) Sck of stationary on 31.3.2019 Rs. 780 and on 31.3.2020 Rs.860
(c) On 1st April 2019 premises were Rs. 16,000. Depreciation on premises and furniture be charged @ 5% and 10% p.a. respectively.
Solution 51

Working Note:-

Point of Knowledge:-
When Receipts & Payment and Income & Expenditure Accounts are already given:
The items appearing on the debit side of receipts and payments accounts are compared with the items on the credit side of income and expenditure accounts. By comparing each item one by one conclusion regarding assets and liabilities are drawn and then recorded in the relevant Balance Sheet. If the amount of an item is equal in both, it will not be recorded in any of the two Balance sheets. However, if the amount is unequal it will be recorded on either of the two Balance sheets.

Question 52 (new). How will the following items be treated while preparing the financial statements of a not-for-profit organization for the year ended 31^st March, 2019?

During 2018-19, the payment made to the creditors was Rs. 4,25,000.

Solution 52 (new).

Question 52. From the following receipts and payment account of a club and from the given additional information supplied, prepare income expenditure account for the year ending 31st March 2016 and the balance sheet as at that date:

Additional information:
(1) The club has 50 members each paying an annual subscription of Rs 2,500. Subscriptions outstanding on 31st March 2015 were the extent of Rs. 30.000
(2) On 31st March 2016 salaries outstanding amounted Rs.10,000. Salaries paid in 2015-16 included Rs. 30,000 for the year 2014-15.
(3) On 1st April 2015, the club owned Building valued at Rs. 10,00,000, Furniture worth Rs. 1,00,000 and books Rs. 1,00,000.
Solution 52

Question 53. Following is the Receipts and Payments Account of Delhi Health Club for the year ended 31st December, 2018:

Additional Information:
(i) Donations for Building include 20% general donations.
(ii) During the year, the club had 600 members and each paying an annual subscription of Rs. 200.
(iii) Outstanding salaries as at January 1, 2018 were Rs. 15,000 and as on December 31, 2018 were Rs. 18,000. Prepare Income and Expenditure Account of the club for the year ended 31st December, 2018.
Solution 53

Point of Knowledge:-
Donations are credited to a separate Fund Account and are displayed on the liabilities side of the Balance Sheet. These funds’ earnings or donations are credited to their respective Fund Accounts. Expenses or payments made from these funds, on the other hand, are debited. Fund-based accounting is what it’s called when accounting is done this way.

Question 54 (new). From the following information, calculate the amount of sports material that will be debited to the ‘Income and Expenditure Account’ of Bright Sports Club for the year ended 31-3-2019.

Additional Information:
Cash purchases of sports material during the year was Rs. 2,50,000.
Rs. 1,50,000 were paid to the creditors of sports material.

Working Note:-
Calculation of Sports Material Consumed to be Debited to Income and Expenditure A/c:-

Question 54. Prepare Income & Expenditure Account for the year ended March 31, 2019 and a Balance Sheet as at that date from the following information.

The following additional information is provided you:

1. There are 1,800 members, each paying an annual subscription of Rs. 200, Rs.18,000 were in arrears for 2017- 18 as on April 1, 2018
2. On March 31, 2019 the rates were prepaid June 2019; the charge paid every year being Rs. 24,000.
3. There was an outstanding telephone bill for Rs.1,400 on March 31, 2019.
4. Outstanding sundry expenses as on March 31, 2018 talled Rs. 2,800.
5. Sck of stationery as on March 31, 2018 was Rs. 2,000; on March 31, 2019, it was Rs. 3,600.
Solution 54

Question 55 (new). From the following receipts and payment account of a club and from the given additional information supplied, prepare income expenditure account for the year ending 31^st March 2021 and the balance sheet as at that date:

Additional information:
(1) The club has 50 members each paying an annual subscription of Rs 2,500. Subscriptions outstanding on 31st March 2020 were to the extent of Rs. 30.000
(2) On 31st March 2021 salaries outstanding amounted to Rs.10,000. Salaries paid in 2020-21 included Rs. 30,000 for the year 2019-20. (3) On 1st April 2015, the club owned Building valued at Rs. 10,00,000, Furniture worth Rs. 1,00,000 and books Rs. 1,00,000

Solution 55 (new).

Question 55. From the following Receipts and Payments Account and additional information, prepare Income and Expenditure Account and Balance Sheet of Sears Club, Noida as at March 31, 2018.

Additional Information:
(i) The club has 200 members each paying an annual subscription of Rs. 1,000. Rs.60,000 were in arrears for last year and 25 members paid in advance in the last year for the current year.
(ii) Sck of stationery on 1.4.2017 was Rs.3,000 and on 31.3.2018 was Rs. 4.000.
Solution 55

Working Note:-
Calculation of Subscription: –

Point of Knowledge:-
Closing Balance Sheet may be drawn up by means of the following Procedure:- The opening balance of cash in hand and at the bank appears at the start of the Dr. side of Receipt and Payments Account. It should not be taken to the Income and Expenditure Account but written on the assets side of the Opening Balance Sheet. The Closing balance of cash in hand and at the bank appears at the end of the Cr. side of Receipts and Payments Account. It is taken to the assets side of Closing balance sheet.

DK Goel Solutions Class 12th Chapter 1 Financial Statements of Non profit Organisation

What do you mean by a not-for-profit organization?

A not-for-profit organization can be defined as an organization that does not blend out funds through profits. Instead, it supplies donations it receives from various sources to meet its objectives and goals. To stay up running and function efficiently, a not-for-profit organization depends solely upon donations. Most of these organizations are tax-exempt, i.e., they are not subjected to most of the taxes. These types of organizations are basically formed on the grounds of religion, education, public service, or any particular cause.

Explain how the not-for-profit organizations generate their funding?

Not-for-profit organizations do not earn any revenue through gains or profits. The only source of funds that keeps them running smoothly and efficiently is donations. These organizations get various types of donations from tons of sources like individual donations, paid sponsorships, government aids, membership charges, and many more.

Illustrate some of the most prominent features of a Not-For-Profit Organization?

Here are some of the important features of a Not-For-Profit Organization –
● The sole objective of a not-for-profit organization is to serve the nation. These organizations are mostly created for a public cause or on religious and educational fronts.
● The organizations receive a major part of their funding from contributions and donations from individuals, government, or sponsorships.
● The not-for-profit organizations are also quoted as separate legal entities.
● The management and administration of the organizations are supervised by elected members.

What do you mean by the final statements of a not-for-profit organization?

Financial Statements of a not-for-profit organization depict a detailed report about the financial position, clearly highlighting the organization’s assets and liabilities. These final statements are designed for those organizations whose primary aim is not to gain or distribute any profits. Therefore, these organizations are inclined toward public service and do not undergo any business activities.

What do the financial statements of a not-for-profit organization include?

The financial statements of a not-for-profit organization comprise –
● Income and Expenditure Account
● Receipts and Payments Account
● Balance Sheet

Give some features of Receipts and Payments Account ?

Here are the features of Receipts and Payments Account –
● All the receipts are registered, whether as capital or revenue.
● Cash payments are credited, and cash receipts are generally debited.
● Receipt and Payment Accounts track the cash and bank transactions only.

What do you mean by ‘Capital Funds’?

Capital funds are the amounts with no restrictions on useability. In simple words, the organization can use the funds for any purpose as long as the purpose is related to the organization.

Also refer to TS Grewal Solutions for Class 12

DK Goel Solutions

DK Goel Solutions Chapter 1 Financial Statements of Not for Profit Organisations

Financial Statements of Not for Profit Organisations (NPO) DK Goel Class 12 Accountancy Solutions

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