NCERT Solutions for Class 12 Accountancy (Part 1) Not for Profit Organisation [Old Book]

NCERT
SOLUTIONS
CLASS - 12th

aglase .co

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Class : 12th

Language : English

Chapter : 1

Chapter Name : Not for profit Organisation

Q1 State the meaning of Not-for-Profit Organisations?

Answer. Not-for-Profit Organisations are those organisations which operate for the welfare of
the society or for charitable purposes and not for profit motive. These organisations are set up
by getting permission from the Central government and are generally set up to promote science,
culture, religion, education, etc.

Page : 47 , Block Name : Short Answer Questions

Q2 State the meaning of Receipt and Payment Account?

Answer. Receipt and Payment account is a summary of all cash and bank transactions. It shows
a summarized picture of all the receipts and payments of an organization for the given period,
irrespective of the fact whether they belong to current year, previous year or succeeding year
and also whether they are of revenue or capital nature. It is simply like a cash A/c which records
all cash transactions on cash basis rather than on an accrual basis.

Page : 47 , Block Name : Short Answer Questions

Q3 State the meaning of Income and Expenditure Account?

Answer. It is an account which records all the expenses and income of revenue nature of the
organisation. It records all the expenses and losses of the current period in the expenditure side
of the account and all the incomes and gains in the income side of the account. The balancing
figure shows the net operating result in the form of surplus or deficit which is transferred to the
capital fund in the balance sheet.

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Page : 47 , Block Name : Short Answer Questions

Q4 What are the features of Receipt and Payment Account?

Answer. Features of Receipt and Payment Account are-

➔ It is the summary of cash book. All the cash and bank receipts are recorded in the debit
side and all cash and bank payments are recorded in the credit side of receipt and
payment account.
➔ It shows total receipts and payments for the given period, irrespective of the fact whether
such receipts or payments belong to the previous year, current year or future years.
➔ It includes items of both revenue and capital nature.
➔ It excludes non cash items like depreciation, provisions, etc.
➔ It follows cash basis of accounting.
➔ It has an opening as well as closing balance. Opening balance represents cash in hand
or bank or overdraft in the beginning of the year and closing balance represents cash in
hand or bank or overdraft at the end of the financial year.

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Q5 What steps are taken to prepare Income and Expenditure Account from a Receipt and
Payment account?

Answer. Following are the steps taken to prepare Income and Expenditure Account from a
Receipt and Payment Account:

➔ Go through the Receipt and Payment account thoroughly.
➔ Exclude the opening and closing cash balance as they are not income or expenditures.
➔ Exclude the capital receipts and capital payments as they are not included here. They
are to be shown in the balance sheet.
➔ Consider all the revenue receipts and revenue expenses and record it in the income side
and expenditure side of the Income and Expenditure Account respectively. While
considering revenue expenses and income make necessary adjustments and exclude
the amount relating to previous or succeeding year and include only the amount relating
to the current year.
➔ Also, Consider the non cash items which were not included in the Receipt and Payment
Account such as depreciation.

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➔ At last determine the surplus or deficit of the current year which will be the balancing
figure.

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Q6 What is subscription ? How is it calculated?

Answer. The membership fees paid by the members of Not for Profit Organisation annually is
known as subscription. This is one of the main sources of income for such organisations.
Subscription received from the members is shown as receipt in the Receipt and Payment
Account and as income in the Income and Expenditure Account in a given period.

Subscription of the current year is calculated as follows:

Particulars Amount (in Rs.)

Amount of Subscription received in the current year XXX

Add​: Subscription outstanding for the current year, yet to be received. XXX

Add:​ Subscription received in advance in previous year, for the current XXX
year.

​ ubscription outstanding for the previous year, received in the
Less: S XXX
current year.

Less:​ Subscription received in advance in current year, for next year. XXX

Subscription for the given period (to be taken to Income & Expenditure XXX
Account

Page : 47 , Block Name : Short Answer Question

Q7 What is Capital Fund? How is it calculated?

Answer.The funds raised by a non profit organisation through various sources is credited to
capital fund. The excess of assets over liabilities is termed as ‘Capital Fund’ or ‘Accumulated

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Fund’ or ‘Corpus Fund’ or a ‘General Fund’ which is similar to capital account of a trading
concern. It includes life membership fees, donations, surplus etc.

Capital Fund is calculated by deducting the amount of liabilities from the value of the total
assets of the Non-Profit organization.

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Q1 Explain the statement ‘Receipt and Payment Account is a summarized version of cash
Book.'

Answer.

● Nature : Receipt and Payment Account is prepared on the basis of all the cash or bank
receipts and all the cash or bank payments made in the current year irrespective of the
fact whether they pertain to the previous year, current year or succeeding year in a
similar way like a cash book is prepared. It follows cash basis of accounting.
● Nature of transactions recorded: Both Receipt and Payments account and Cash book
records only cash items i.e. cash receipts and cash payments .It excludes all non cash
items like depreciation, provisions, etc.
● Capital and revenue items : Both receipt and payment account and cash book records
cash receipts and payment of revenue as well as capital nature.
● Purpose : The cash book help us in ascertaining the total cash receipts and payments of
a particular financial year of a profit seeking organisation. Similarly, Receipt and
Payment account is prepared to find the total of cash receipts and cash payments made
in a financial year, of a not for profit organisation.
● Opening and closing balance : Receipt and payment account as well as Cash Book has
opening as well as closing balance showing cash in hand or bank or overdraft in the
beginning and at the end of a particular financial year respectively.

Page : 48 , Block Name : Long Answer Questions

Q2 ‘Income and Expenditure Account for a Not-for Profit Organisation is a kin to profit and loss
account for a business concern.’ Explain the statement.

Answer.

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● Nature: Income and Expenditure Account is a nominal account which records the income
and expenditure to ascertain the surplus or deficit of the accounting year of a
Not-for-Profit Organisation. Similarly all the business concerns prepare Profit and Loss
Account which includes all the expenses and income of a particular year so as to
ascertain the net profit or net loss of the business for the same year.
● Basis of recording : Both Income and Expenditure account and Profit and Loss account
are prepared on the accrual basis of accounting. They include items of only revenue
nature and excludes that of capital nature. They also include non cash items like
depreciation.
● Period:Both the accounts are prepared on accrual basis .It includes items pertaining to
the current year and excludes items belonging to previous year or next year.
● Adjustments: Since both the accounts are prepared on the accrual basis, necessary
adjustments must be made, to exclude the items of previous or next year. Expenses
outstanding of the current year and paid in advance for the current year must be added
to the respective account and expenses of previous year or next year must be deducted.
In a similar manner incomes should also be adjusted.

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Q3 Distinguish between Receipt and Payment Account and Income and Expenditure Account.

Answer.

Basis of difference Receipt and Payment Income and Expenditure
Account Account

Meaning It is an account which It is an account which
includes all the cash or records all the incomes or
bank receipts and payments gains and the expenses of
of the organisation. the organization.

Nature It is a summary of cash It is similar to Profit and
book. Loss account.

Time Period It records receipts and It includes income and
payments made in the expenditure only of current
current year irrespective of year and excludes that of
the fact whether it belongs

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to the previous year, current previous or succeeding
year or future years. year.

Basis of accounting It follows cash basis of It follows accrual basis of
accounting. accounting.

Nature of items It includes items of both It includes items of revenue
revenue or capital nature. nature only.

Debit and credit On the debit side, it records On the debit side, it records
all the cash receipts. On the all the expenses and on the
credit side, it records all the credit side, all the income
cash payments. and gains are recorded.

Non cash items It excludes non cash items It includes non cash items
like depreciation. like depreciation.

Opening and closing Opening balance It has no opening balance.
balance represents cash in hand or Closing balance represents
at bank in the beginning of net surplus or deficit of the
the year. Closing balance particular financial year.
represents cash in hand or
bank balance at the end of
the year.

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Q4 Explain the basic feature of Income and Expenditure Account and Receipt and Payment
Account.

Answer. Basic feature of Income and Expenditure Account are –

➔ Meaning and nature: It is a nominal account which records income and expenditure of
the not for profit organisation of a particular financial year in the credit and debit side of
the account respectively.
➔ Basis:It is prepared on the accrual basis of accounting. Thus it includes expenses and
income only of current year and excludes that of previous year or next year.

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➔ Nature of items: It includes expenses and incomes of revenue nature only and excludes
that of capital nature . It includes both cash and non cash items.
➔ Similar to profit and loss account: Income and expenditure account of a not for profit
organisation is a kin to profit and loss account of any profit seeking organisation.
➔ Adjustments are considered: Since it is prepared on accrual basis of accounting, it needs
to make certain adjustments so as to exclude items belonging to previous year or next
year and include the items outstanding or accrued of the current year.
➔ Balancing figure : It has no opening balance. Closing balance represents the net surplus
or deficit of the particular financial year which is the balancing figure.

Basic feature of Receipt and Payment Account are-

➔ Meaning: It records all the cash or bank receipts on the debit side and all the cash or
bank payments on the credit side so as to ascertain the total cash receipts and cash
payments made in a particular year of a not for profit organisation.
➔ Similar to cash book: It is the summarized form of the cash book which records all cash
and bank transactions in the particular accounting period.
➔ Basis of accounting: It records receipts and payments received in the current year
irrespective of the fact to which year it belongs. It is prepared on cash basis of
accounting.
➔ Nature of items: It includes receipts and payments of both revenue and capital nature. It
excludes non cash items like depreciation.
➔ Opening and closing balance: It has an opening as well as closing balance which
represents cash in hand or bank in the beginning and at the end of the year respectively.

Page : 48 , Block Name : Long Answer Questions

Q5 Show the treatment of the following items by a not-for-profit organization.

i) Annual Subscription

ii) Specific Donation

iii) Sale of fixed assets

iv) Sale of old periodicals

v) Sale of Sports material

vi) Life membership fee

Answer. i) Annual Subscription: Subscription received annually is shown in the receipt side of
the receipt and payment account and subscription of the particular year is shown in the Income

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and Expenditure Account. Subscription outstanding of current year is added to subscription in
the income side of income and expenditure account of the same year and is also shown in the
asset side of the closing balance sheet. Subscription outstanding of previous year is deducted
from the subscription received in the income side of the income and expenditure account and is
shown in the asset side of opening balance sheet. Similarly subscription received in advance for
the next year is deducted from the subscription received in the current year and is shown in the
liabilities side of the closing balance sheet. Subscriptions received in advance in previous year
is added to the subscription received in the current year and shown in the liabilities side of
opening balance sheet.

ii) Specific Donation: Specific Donation is capitalized and shown in the liabilities side of balance
sheet. The amount received is also shown in the receipt side of receipt and payment account.

iii) Sale of fixed assets: The receipt amount from sale of fixed assets is shown in the Receipt
column of receipt and payment account. The gain or loss are shown in the Income or
expenditure column of Income and Expenditure Account respectively. The cost of the asset sold
is deducted from the particular asset sold and the value so ascertained is recorded in the asset
side of closing balance sheet.

Iv) Sale of old periodicals: It is shown in the income side of Income and Expenditure Account.
The amount received on such sale is recorded in the receipt side of receipt and payment
account.

v) Sale of Sports Material: It is shown in the income side of Income and Expenditure Account.
The amount received from the sale of sports material is recorded in the receipt side of receipt
and payment account.

vi) Life membership: It is credited directly to the capital fund in the balance sheet. The amount of
life membership fee received is shown in the receipt side of receipt and payment account.

Page : 48 , Block Name : Long Answer Questions

Q6 Show the treatment of items of Income and Expenditure Account when there is specific fund
for those items.

Answer. There are various specific and general sources of receipts like donations,
subscriptions, government grants, etc. in a not for profit organisation. Specific sources are used
for certain specific purpose. For example, if a donation is received for construction of buildings,
then this donation is a specific donation and thereby can only be used for construction of the
building. These specific receipts are not considered as revenue income and thus we do not
record them in the Income and Expenditure Account of an NPO. These are included in the
liabilities side of the balance sheet as these amounts are received for a particular purpose and
cannot be used for any other purpose. On the other side , if we invest these amounts outside

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the organisations (in the form of shares, debentures, etc.), then these are called funds like,
match funds, prize fund, etc. Now ,If income is earned from investment on such funds, it is
added to the respective fund and if the expenses are incurred on such special purpose for which
fund is created , it is deducted from the respective special fund account. Let us understand this
with an example, if match fund is created for Rs. 1000 and there are match expenses of Rs
5000 and sale of match tickets of Rs. 6000. Here, match expenses will be deducted from the
match fund and the income earned from sale of match tickets will be added to it. The balance
amount will appear on the liabilities side of Balance Sheet as here receipts were more than
expenses. In case, if the related expenses exceed the related receipts of the fund, then the
difference is shown in the income and Expenditure Account.

Page : 48 , Block Name : Long Answer Questions

Q7 What is receipt and payment account? How is it different from Income and Expenditure
Account?

Answer. Receipt and Payment Account is an account which records all the receipts and
payments of cash or bank account made in a particular year irrespective of the fact to which
year it belongs i.e. previous year, current year or future years.

It is different from Income and Expenditure Account on the following basis:

Basis of difference Receipt and Payment Income and Expenditure
Account Account

Meaning It is an account which It is an account which
includes all the cash or records all the incomes or
bank receipts and payments gains and the expenses of
of the organisation. the organisation.

Nature It is a summary of cash It is a kin of Profit and Loss
book. account.

Time Period It records receipt and It includes income and
payments made in the expenditure only of current
current year irrespective of year and excludes that of
the fact whether it belongs previous or succeeding
year.

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to the previous year, current
year or future year.

Basis of accounting It follows cash basis of It follows accrual basis of
accounting. accounting.

Nature of items It includes items of both It includes items of only
revenue or capital nature revenue nature.

Debit and credit On debit side it records all On debit side it records all
the cash receipts. On credit the expenses and on credit
side it records all the cash side all the income and
payments. gains.

Non cash items It excludes non cash items It includes Non cash items
like depreciation. like depreciation.

Opening and closing Opening balance It has no opening balance.
balance represents cash in hand or Closing balance represents
at bank in the beginning of net surplus or deficit of the
the year. Closing balance particular financial year.
represents cash in hand or
bank balance at the end of
the year.

Page : 48 , Block Name : Long Answer Question

Q1 From the following particulars taken from the cash book of a health club, prepare Receipts
and Payment Account.

Particulars Amount

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Opening Balance :

Cash in Hand 5000

Cash at Bank 25000

Subscriptions 165000

Donations 35000

Investment Purchased 80000

Rent Paid 20000

General Expenses 21500

Postage and Stationary 2000

Courier charges 1000

Sundry Expenses 2500

Closing cash in hand 12000

Answer.

Receipts and Payments Account

Dr for the year ending.. Cr

Receipts Amount Payments Amount

To Balance b/d: By Investment A/c 80000

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Cash in Hand 5000 By Rent A/c 20000

Cash at Bank 25000 By General expenses A/c 21500

To Subscriptions A/c 165000 By Postage and 2000
stationary A/c

To Donations A/c 35000 By Courier charges A/c 1000

By Sundry expenses A/c 2500

By Balance c/d :

Cash in hand 12000

Cash at bank 91000

( balancing figure)

230000 230000

Page : 48 , Block Name : Numerical Questions

Q2 The Receipt and Payment Account of Harimohan charitable institution is given:

Dr Receipts and Payment Account for the year ending March 31,2015 Cr

Receipts Amount Payments Amount

Balance b/d : Furniture 3000

Cash at bank 22000 Investments 55000

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Cash in hand 8800 Advance for building 20000

Donations 32000 Charities 60000

Subscriptions 50200 Salaries 10400

Endowment Fund 60000 Rents and Taxes 4000

Legacies 24000 Printing 1000

Interest on Investment 3800 Postage 300

Interest on Deposits 800 Advertisements 1100

Sale of old newspapers 500 Insurance 4800

Balance c/d :

Cash at Bank 32000

Cash in hand 10500

202100 202100

Prepare Income and Expenditure Account for the year ended 31​ ​March, 2015 after considering
the following:

i) It was decided to treat fifty percent of the amount received on account of legacies and
donations as income.

ii) Liabilities to be provided for are: Rent Rs 800; Salaries Rs 1200; Advertisements Rs 200.

iii) Rs 2000 due for interest on investment was not actually received.

Answer.

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Income and Expenditure Account

Dr for the year ending 31 March,2015 Cr

Expenditure Amount Income Amount

To Rent 400 By Legacies 24000

Add: Rent Outstanding ​800 4800 - Capitalised (12000) 12000

To Salaries 10400 By Donations 32000

Add: Salaries Outstanding 11600 . - Capitalised (16000) 16000
​1200

To Advertisement 1100 By interest on investment
3800
Add: Outstanding 1300
advertisement ​ 200 Add: interest Outstanding
​2000 5800

To charities 60000 By Subscriptions 50200

To Printing 1000 By interest on deposits 800

To Postage 300 By Sale of Old Newspapers 500

To Insurance 4800

To surplus (Balancing 1500
Figure)

85300 85300

Page : 49 , Block Name : Numerical Questions

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Q3 From the following particulars, prepare Income and Expenditure Account:

Details Amount ( Rs )

Fees collected, including Rs 80000 on account of previous year 520000

Fees for the year outstanding 30000

Salary paid including Rs 5000 on account of previous year 68000

Salary outstanding at the end of the year 3000

Entertainment expenses 8000

Tournament expenses 25000

Meeting expenses 18000

Travelling expenses 7000

Purchase of books and periodicals including Rs 31000 for 40000
purchase of books

Rent 15000

Postage, telegrams and telephones 6000

Printing and Stationary 18000

Donation received 25000

Answer.

Dr Income and expenditure Account Cr.

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for the year ending…

Expenditure Amount Income Amount

To Salary 68000 By fees 520000
Less: salary Outstanding Less: fees outstanding
of Previous year : 5000 of previous year: (80000)
Add: Salary Outstanding Add: fees outstanding
of current year: ​3000 66000 for current year: ​30000 470000

To Entertainment expenses 8000 By Donation 25000

To Tournament expenses 25000

To Meeting expenses 18000

To Travelling expenses 7000

To Rent 15000

To Postage and telegram 6000

To printing and Stationary 18000

To Purchase of periodicals

9000

To Surplus ( balancing figure)

323000

495000 495000

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Page : 49 , Block Name : Numerical Questions

Q4 Following is the information given in respect of certain items of a sports club. Show these
items in the Income and Expenditure Account and Balance sheet of the club:

Amount (Rs)

Sports fund as on 1.04.2015 35000

Sports fund investment 35000

Interest on sports fund 4000

Donations for sports fund 15000

Sports prizes awarded 10000

Expenses on sports events 4000

General fund 80000

General fund investments 80000

Interest on general fund investment 8000

Answer.

Income and Expenditure A/c

For the year ending ………

Dr. Cr.

Expenditure Amount Income Amount
₹ ₹

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By interest on general fund 8000
investment

Balance Sheet

as on…

Liabilities Amount Assets Amount

Sports fund 35000 Sports Fund Investment 35000

Add: Interest 4000

Add: Donation ​15000

54000

Less: Sports prizes
awarded
(10000)

Less : Expenses (​4000) 40000

General Fund 80000 General Fund Investment 80000

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Q5 How will you deal with the following items while preparing for the Bombay Women Cricket
Club its Income and Expenditure Account for the year ending 31.03.2017 and its balance sheet
as on 31.03.2017.

Particulars Amount (Rs)

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a) Donation received during the year for the construction of
a permanent pavilion
1225000
Expenditure incurred up to 31.03.2017 on its construction
1080000
The total estimated expenditure on the construction of
Pavilion being

2500000

b) Tournament fund :

Balance as on 1.04.2016 10700

Subscription for tournament received during the year 65800

Expenditure incurred during the year 72400

c) Life membership fee received during the year 28000

​Give reasons for your answers.

Answer. a)

Donation received for the pavilion= 1225000

Less: Expenditure incurred = ​180000

Balance of pavilion fund = 145000

This balance of pavilion fund will appear on the liability side of the balance sheet as it is a
special fund created for the construction of pavilion.

b) Tournament fund:

Opening Balance= 10700

Add: Subscriptions received= 65800

Less: Expenditure incurred = ​72400

Balance of tournament fund= 4100

This balance of 4100 will be shown at the balance of tournament fund in the liability side of the
balance sheet.

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c) Life membership fee=28000

This will appear in liability side of the balance sheet as it is revenue of capital nature.

Bombay Women Cricket Club

Balance Sheet

as on 31.03.2017

Liabilities Amount Assets Amount

Pavilion fund 145000

Tournament fund 4100

Life Membership Fee 28000

Page : 50 , Block Name : Numerical Questions

Q6 From the following receipts and payments and information given below, prepare Income and
Expenditure Account and opening Balance Sheet of Adult Literacy Organisation as on
December 31, 2017.

Receipts and Payment account

as on 31 December,2017

Receipts Amount Payment Amount

Balance b/d: General expenses 3200

Cash in hand 4000

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Cash at bank 15550

Subscription: Newspaper 1850

2016: 1200

2017: 26500

2018: 500 28200

Sale of old newspapers 1250 Electricity 3000

Government grants 12000 Fixed deposit with bank on 18000
31.06.2017 @10% p.a

Sale of old furniture (book 3700 Books 7000
value 5000)

Interest received on fixed 450 Salary 3600
deposit

Rent 6500

Postage charges 300

Furniture (purchased) 10500

Balance c/d:

Cash in hand 3000

Cash at bank 8200

65150 65150

Information:

i) subscription outstanding as on 31.12.2016, Rs 2000 and on December 31,2017 Rs 1500.

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ii) On December 31,2017 Salary outstanding Rs 600 and one month rent paid in advance.

iii) On January 01 ,2016 organization owned furniture of Rs 12000 and books Rs 5000.

Answer.

Opening Balance sheet

as on 01 January ,2017

Liabilities Amount Assets Amount

Capital fund (balancing 38550 Outstanding subscription 2000
figure

Furniture 12000

Books 5000

Cash in hand 4000

Cash at bank 15550

38550 38550

Income and Expenditure Account

Dr as on 31 December ,2017 Cr

Expenditure Amount Income Amount

To salary By Subscription
3600
4200 Received for current
Add: salary outstanding ​600
year 26500

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(+) Outstanding for

current year 1500 28000

To rent 6500 By sale of old newspapers 1250

Less: prepaid rent 500 6000

To loss on sale of furniture 1300 By interest on investment 450

Add: Interest outstanding ​450 900

To general expenses 3200 By government grant 12000

To newspapers 1850

To electricity 3000

To postage charges 300

To Surplus (balancing 22300
figure)

42150 42150

Closing balance sheet

as on 31 December ,2017

Liabilities Amount Assets Amount

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Advance Subscription 500 Outstanding Subscription:
(2018)
2016: 800

2017: ​1500 2300

Outstanding salary 600 Advance rent 500

Capital fund 38550 Books : 5000

Add: Surplus ​22300 60850 Add: Purchase ​7000 12000

Furniture 17500

Outstanding Interest 450

Fixed Deposit 18000

Cash in hand 3000

Cash at bank 8200

61950 61950

Working Note:

1) Subscription A/c

Particulars Amount Particulars Amount
₹ ₹

To subscription Outstanding 2000 By cash A/c 28200
(2016) A/c By Subscription outstanding 2300
To Income and Expenditure A/c 28000 2017
To Subscription received in
advance 2017 500

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30500 30500

2)​ calculation of rent paid in advance:

Rent of 13 months is given as = 6500

Thus rent of one month (6500/13) = 500

3) ​Calculation of value of furniture on 31.12.17

furniture as on 01.1.17 = 12000

Less: Sale of furniture = ​5000

= 7000

Add: Purchase of furniture = ​10500

Thus closing value of furniture = 17500

4) Interest on fixed deposit of 18000 @10% for 6 months = 900

Less: Interest received = ​450

Outstanding interest = 450

Page : 50 , Block Name : Numerical Questions

Q7 The following is the account of cash transactions of the Nari Kalayan Samittee for the year
ended December 31, 2017:

Receipts Amount Payments Amount

Balance from last year 2270 Rent 6600

Subscription 32500 Electric charges 3200

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Life membership fees 3250 Lecturer’s fee 730

Donation 2500 Office expenses 1480

Profit from entertainment 7250 Printing and stationary 1050

Sale of old books ( book 750 Legal fees 1870
value Rs 1000)

Interest 350 Books 6500

Furniture purchased 8600

Expenses on nukkar drama 1300

Cash in hand 8040

Cash at bank 9500

48870 48870

You are required to prepare an income and expenditure account after the following adjustments:

a) Subscription still to be received are Rs 750 but subscription include Rs 500 for the year 2016.

b) In the beginning of the year the Sangh, owned building Rs 20000, furniture Rs 3000 and
books Rs 2000.

c) Provide depreciation on furniture @5% (including purchase), books @10% and building@
5%.

Answer.

Income and Expenditure Account

Dr for the year ending 31 December, 2017 Cr

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Expenditure Amount Income Amount

To depreciation: By Subscription 32750

Furniture: 580

Building: 1000

Books: ​750 2320

To loss on sale of old books By Donation 2500

250

To rent 6600 By Profit from 7250
entertainment

To electric charges 3200 By interest 350

To lecturers’ fee 730

To office expenses 1480

To Printing and stationary 1050

To legal fees 1870

To expenses on nukkar 1300
drama

To surplus ( balancing figure) 24040

42850 42850

Working Note:

1. ​Calculation of depreciation:

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Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

· Opening value of furniture = 3000

Add: Purchase = ​8600

Value of furniture =11600

Depreciation on 11600 @5% = 580

· Depreciation on building of 20000 @5% = 1000

· Value of books as on 1 January 2017 = 2000

Less: sale of books =​1000

1000

Add: Books purchased ​7500

Now,

Depreciation on 7500 @10% = 750

Page : 51 , Block Name : Numerical Questions

Q8 Following is the Receipt and Payment Account of Indian Sports club; prepare Income and
Expenditure Account, Balance Sheet as on December 31, 2015.

Receipt and Payment Account

for the year ending December 31,2015

Receipt Amount Payments Amount

Balance b/d 7890 Salary 11000

Subscriptions 52000 Electric charges 5500

Life membership fee 2200 Billiard table 17500

Entrance fee 3200 Office expenses 4100

Page 28 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Tournament fund 26000 Printing and stationary 2300

Locker rent 1250 Tournament Expenses 18500

Sale of old sports Repair of ground 2000
equipment (costing Rs
2200) 2500

Sale of old newspapers 750 Furniture purchased 7700

Legacy 37500 Sports equipment 12000

Cash in hand 12690

Cash at bank 10000

Fixed Deposit (on 30000
1.10.2017 for 10% p.a.)

133290 133290

Other information:

Subscriptions Outstanding was on December 31 2016 Rs 1200 and Rs 3200 on 31 December
2017. Locker rent outstanding on December 31,2017 Rs 250.Salary outstanding on December
31, 2017 Rs. 1000.

On January 1, 2017 club has building of 36000, furniture of 12000, sports equipment of 17500.
Depreciation charged on these items @10% (including purchase).

Answer.

Balance sheet

as on 01.1.2017

Liabilities Amount Assets Amount

Page 29 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Capital fund (balancing 74590 Outstanding Subscription 1200
figure)

Cash balance 7890

Building 36000

Furniture 12000

Sports equipment 17500

74590 74590

Dr Income and Expenditure A/c Cr.

For the year ended 31.12.2017

Expenditure Amount Assets Amount

To salary 11000 By subscriptions 54000

Add: salary outstanding ​1000 12000

To depreciation: By locker rent 1250 1500

Building 3600 Add: Outstanding rent ​250

Furniture 1970

Sports equipment ​2730 8300

To electric charges 5500 By interest on fixed 750
deposits @10 %

To office expenses 4100 By profit on sale of 300
equipment

Page 30 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

To printing and stationary 2300 By sale of old newspaper 750

To repair of ground 2000 By entrance fees 3200

To surplus (balancing figure) 26300

60500 60500

Balance Sheet

as on 31.12.2017

Liabilities Amount Assets Amount

Outstanding salary 1000 Outstanding subscription 3200

Tournament Fund 26000 Outstanding locker rent 250

Less: Tournament expenses 7500
​18500

Capital fund 74590 Building 36000

Less: Depreciation: ​3600 32400

Add: Life membership fee Furniture 19700
2200
Less: Depreciation ​1970 17730

Add: Legacy 37500 Sports equipment 27300

Less: Depreciation ​2730 24570

Add: Surplus 26300 140590 Billiard Table 17500

Page 31 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Fixed Deposit 30000

Add: Interest ​ 750 30750

Cash in hand 12690

Cash at bank 10000

149090 149090

Working Note:

1. Calculation of subscription for the year 2017:

Subscription received during the year = 5200

Less: Outstanding subscription of previous year = 1200

Add: Outstanding subscription of the year 2017 = ​3200

Subscription of the year = 54000

2. Calculation of depreciation

· Building of 36000@ 10% = 3600

· Value of furniture as on 31.12.17 = 12000+ 7700= 19700

Depreciation on furniture @ 10% = 1970

· Sports equipment as on 1.1.17 = 17500

Less: Sale of equipment = 2200

Add: Purchase of equipment = ​12000

= 27300

depreciation @10% on 27300 = 2730

3. Interest on fixed deposit of 30000 @10% for 3 months= 750

Page 32 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Page : 52 , Block Name : Numerical Questions

Q9 From the following receipt and payment Account of Jan Kalyan Club, prepare Income and
Expenditure Account and Balance Sheet for the year ending March 31,2017.

Receipt and Payment Account

Dr for the year ending March 31,2017 Cr

Receipts Amount Payments Amount

Cash in hand as on 1.4.16 6800 Salaries 24000

Subscriptions 60200 Travelling expenses 6000

Donations 3000 Stationary 2300

Sale of furniture ( Book 4000 Rent 16000
value 6000)

Entrance fees 800 Repair 700

Life membership fees 7000 Books purchased 6000

Interest on investment 5000 Building purchased 30000
@5% for full year

Cash in hand as on 1800
31.3.2017

86800 86800

Additional information:

Page 33 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

As on 01.04.2016 As on 31.03.2017

Subscriptions received in advance 1000 3200

Outstanding subscription 2000 3700

Stock of stationary 1200 800

Books 13500 16500

Furniture 16000 8000

Outstanding rent 1000 2000

Answer.

Balance Sheet

as on 01.04.2016

Liabilities Amount Assets Amount

Advance subscription 1000 Outstanding Subscription 2000

Outstanding rent 1000 Stock of Stationary 1200

Capital fund ( balancing 37500 Books 13500
figure)

Furniture 16000

Cash in hand 6800

Page 34 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

39500 39500

Income and Expenditure Account

Dr. For the year ending 31.03.2017 Cr.

Expenditure Amount Income Amount

To loss of stationary By Subscription 59700

To depreciation on books By donation 3000

To depreciation on furniture By entrance fees 800

To rent 16000 By interest on investment 5000

Add: outstanding rent

As on 31.3.2017 2000

Less: Outstanding rent

As on 1.4.2016 ​1000 17000

To salaries 24000

To travelling expenses 6000

To repair 700

To loss on sale of furniture 2000

To surplus (balancing figure) 11100

68500 68500

Page 35 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Balance Sheet

as on 31.03.2017

Liabilities Amount Assets Amount

Advance subscription 3200 Outstanding 3700
Subscriptions

Outstanding rent 2000 Stock of Stationary 800

Capital fund 37500 Books 16500

Add: Life membership fee Furniture 8000
7000

Add: Surplus 11100
55600

Building 30000

Cash in hand 1800

60800 60800

Working Note:

1. Calculation of subscription for the year:

Subscription received during the year = 60200

Add: Subscription in advance as on 1.4.2016 = 1000

Add: Subscription outstanding on 31.3.2017 = ​3700

64900

Less: Subscription in advance as on 31.3.2017 = 3200

Less : Subscription as on 1.4.2016 = ​2000

Page 36 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

59700

2. Opening stock of stationary = 1200

Add: Purchases = 2300

Less: Closing Stock = ​800

Loss of stationary = 2700

3. Depreciation on books:

Value of books as on 1.4.2016 = 13500

Add: Purchase of books = 6000

Less: Books as on 31.03.3017 = ​16500

Depreciation = 3000

4. Depreciation on furniture:

Value of furniture as on 1.04.2016 = 16000

Less : Sale of furniture = 6000

Less: Value as on 31.03.2017 = ​8000

Depreciation = 2000

Page : 52 , Block Name : Numerical Questions

Q10 Receipt and Payment Account of Shankar Sports club is given below for the year ending
March 31, 2017.

Receipt and Payment Account

for the year ending March 31, 2017

Page 37 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Receipt Amount Payment Amount

Opening cash in hand 2600 Rent 18000

Entrance fees 3200 Wages 7000

Donation for building 23000 Billiard table 14000

Locker Rent 1200 Furniture 10000

Life Membership fee 7000 Interest 2000

Profit from entertainment 3000 Postage 1000

Subscription 40000 Salary 24000

Cash in Hand 4000

80000 80000

Prepare Income and Expenditure Account and balance sheet with the help of following
Information:

Subscription outstanding on March 31,2016 is Rs 1200 and Rs 2300 on March 31,2017.
Opening Stock of postage stamps is Rs 300 and closing stock is Rs 200, Rent Rs 1500 related
to 2015 and Rs 1500 is still unpaid. On April 1,2016 the club owned furniture of 15000, furniture
valued at Rs. 22500 on March 31, 2017. The club has a loan of 20000 @ 10% p.a in 2017.

Answer.

Balance Sheet

as on 1.4.2016

Liabilities Amount Assets Amount

Outstanding rent 1500 Outstanding subscriptions 1200

Page 38 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Loan 20000 Postage stamps 300

Furniture 15000

Cash in hand 2600

Capital fund (balancing 2400
figure)

21500 21500

Income and Expenditure Account

Dr for the year ending 31 March,2017 Cr

Expenditure Amount Income Amount

To postage stamps 1100 By Subscriptions 41100

To rent 18000 By entrance fees 3200

Less: Outstanding rent of
2015 1500

Add: Outstanding rent of 2017
​1500

18000

To depreciation on furniture 2500 By locker rent 1200

To interest on loan 2000 By profit from 3000
entertainment

To wages 7000 By deficit ( balancing 6100
figure)

Page 39 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

To salary 24000

54600 54600

Balance Sheet

as on 31 March, 2017

Liabilities Amount Assets Amount

Outstanding rent 1500 Outstanding Subscription 2300

Loan 20000 Postage stamp 200

Capital fund (2400) Furniture 22500

Add: Donation for building Billiard table 14000
23000

Add: Life membership fees Cash in hand 4000
7000

Less: Deficit ​6100 21500

43000 43000

Working Note:

1. Calculation of subscription of the year

Subscription received in 2017 = 40000

Less: Outstanding Subscription of 2016 = 1200

Add: Subscription outstanding of 2017 = ​2300

Page 40 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Subscription of 2017= 41100

2. Opening stock of Postage stamp = 300

Add: Purchase of stamps = 1000

Less: Closing Stock of stamps = ​200

Loss of stamps = 1100

3. Value of furniture on 1.4.2016 = 15000

Add: Purchase of furniture = 10000

Less: Value of furniture as on 31.3.2017 = ​22500

Thus depreciation = 2500

Page : 53 , Block Name : Numerical Questions

Q11 Prepare Income and Expenditure Account and balance sheet for the year ending March 31,
2016 from the following receipt and payment Account and Balance sheet of culture club:

Receipt and Payment Account

for the year ended March 31, 2016

Receipts Amount Payments Amount

Opening cash balance 12000 Furniture

Subscription: Telephone expenses

2014-15 2000

2015-16 ​ 22000 24000

Entrance fees 2800 Salary:

Page 41 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Locker Rent 1000 2014-15 1000

Life membership fee 1200 2015-16 4000

Government Grant 11000 Newspapers 700

Sundry Expenses 1000

Defense bonds 18000

Land 20000

Closing cash balance 2500

52000 52000

Opening Balance Sheet

for year ending March 31,2016.

Liabilities Amount Assets Amount

Advance locker rent 200 Cash in hand 12000

Subscription in advance 1000 Outstanding subscription 3000

Outstanding salary 2000 Building 35000

Loan 10000

Capital fund 36800

50000 50000

Page 42 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Answer.

Income and Expenditure

Dr for the year ending March 31,2016 Cr

Expenditure Amount Income Amount

To telephone expenses 800 By subscriptions 23000

To salary 4000 By entrance fees 2800

To newspapers 700 By Locker rent 1000

Add: Advance rent ​200 1200

To sundry expenses 1000 By government grant 11000

To Surplus (balancing 31500
figure)

38000 38000

Balance Sheet

for the year ending March 31, 2016

Liabilities Amount Assets Amount

Loan 10000 Furniture 4000

Outstanding salary 1000 Outstanding furniture 1000
(2000-1000) (3000-2000)

Page 43 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Capital fund 36800 Land 20000

Add: Life membership fee Building 35000
1200

Add: Surplus 31500 69500 Defense bonds 18000

Cash in hand 2500

80500 80500

Working Note:

1. Calculation of subscription of 2016:

Subscription received in 2016. = 22000

Add: Subscriptions received in advance = ​1000

Subscription of 2016 = 23000

Page : 54 , Block Name : Numerical Questions

Q12 From the following Receipt and Payment Account prepare final accounts of a Unity Club for
the year ended March 31, 2017.

Receipts and Payments Account

Dr for the year ending March 31,2017 Cr

Receipts Amount Payments Amount

Balance b/d 15000 Furniture 18000

Sale of old furniture Library Books 10000

(Costing Rs 6000) 4000

Page 44 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Subscriptions: Salaries 72000

2015-16 18000 General expenses 18000

2016-17 60000 Electric charges 12000

2017-18 ​12000 90000 Newspapers 33800

Sale of old newspapers 10800 Postage 3000

Profit from entertainment 44000 Stationary 40000

Rent 84000 Audit fee 8000

Balance c/d 33000

247800 247800

Balance Sheet

as on March 31, 2017

Liabilities Amount Assets Amount

Outstanding Salary 6000 Cash 15000

Capital fund 694000 Outstanding Subscriptions 18000

Library Books 30000

Furniture 37000

Land and building 600000

Page 45 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

700000 700000

Additional information:

1. The club had 500 members each paying an annual subscription of Rs 150

2. On 31.3.2016 salaries outstanding amounted to Rs 1200 and salaries paid included Rs 6000
for the year 2015-2016.

3.Provide 5% depreciation on land and building.

Answer.

Income and Expenditure A/c

Dr for the year ending March 31,2017 Cr

Expenditure Amount Income Amount

To salary 67200 By Subscription 75000

To depreciation @5% on 30000 By sale of newspapers 10800
land and building

To loss on sale of furniture 2000 By profit from entertainment 44000

To general expenses 18000 By Rent 84000

To electric charges 12000 By Deficit ( balancing figure) 200

To newspapers 33800

To stationary 3000

To postage 40000

To audit fee 8000

214000 214000

Page 46 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Closing balance sheet

For the year ending March 31,2017

Liabilities Amount Assets Amount

Advance Subscription 12000 Outstanding Subscription 15000

Outstanding Salary 1200 Land and building 600000

Less: Depreciation 30000 570000

Capital fund 694000 Furniture 49000

Less: Deficit ​200 693800 Library books 40000

Cash in hand 33000

707000 707000

Working note:

1. Annual subscription = = 75000

Subscription received in 2017. = ​60000

Outstanding subscription = 15000

2. Salary paid in 2017 = 72000

Less: Outstanding salary of 2016 = 6000

Add: Outstanding salary of 2017 = ​1200

Salary of 2017 = 67200

Page 47 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

3. Opening value of furniture = 37000

Less: Sale of furniture = 6000

Add: Purchase of furniture = ​18000

Closing value of furniture = 49000

4. Opening Value of library books = 30000

Add: Purchase of Library books = ​10000

Closing Value of library books = 40000

Page : 55 , Block Name : Numerical Questions

Q13 Following is the information in respect of certain items of a sports club. You are required to
show them in the income and expenditure account and the balance sheet.

Details Amount

Sports Fund as on April 1, 2016 80000

Sports Fund investments 80000

Interest on Sports Fund Investments 8000

Donations for Sports Fund 30000

Sports Prizes awarded 16000

Expenses on Sports events 7000

General Fund 200000

Page 48 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

General Fund Investment 200000

Interest on General Fund Investments 20000

Answer.

Balance Sheet

As on.......

Liabilities Amount Assets Amount

Sports fund 80000 Sports fund investment 80000

Add: Interest 8000

Add: Donation 30000

Less: Sports Prizes awarded
16000

Less: Expenses ​ 7000 95000

General fund 200000 General fund investment 200000

Add: Interest on general

Fund investment ​20000 220000

Page : 55 , Block Name : Numerical Questions

Q14 Receipt and payment Account of Maitrey Sports Club showed that Rs 68500 were received
by way of subscriptions for the year ended on March 31,2017.

Page 49 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

The additional information was as under:

1. Subscription outstanding as on March, 31 2016 were 6500.

2. Subscription received in advance as on March 31, 2016 were Rs 4100

3. Subscription outstanding as on March 31, 2017 were Rs 5400

4. Subscription received in advance as on March 31,2017 were Rs. 2500.

Show how the above information would appear in the final accounts for the year ended on
March 31, 2017 of Maitrey Sports Club.

Answer.

Calculation of subscription of the year ending 31 March, 2017:

Details Amount

Subscription received during the year 68500

Less: Subscription outstanding as on March 31,2016 6500

Less: Subscription in advance as on March 31, 2017 2500

Add: Subscription in advance as on March 31,2016 4100

Add: Subscription outstanding as on March 31,2017 5400

69000

Balance Sheet

as on 31.03.2016

Liabilities Amount Assets Amount

Page 50 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Advance subscription 4100 Outstanding subscription 6500

Income and Expenditure A/c

Dr. For the year ending 31.03.2017​ ​Cr.

Expenditure Amount Assets Amount

By Subscriptions 68500

Balance sheet

as on 31.03.2017

Liabilities Amount Assets Amount

Advance subscription 2500 Outstanding Subscription 5400

Page : 56​ , Block Name : Numerical Questions

Q15 Following is the receipt and payment account of Rohatgi Trust:

Receipt and Payment Account

Dr for the year ending December 31,2017 Cr

Receipts Amount Payments Amount

Cash in hand 14000 Rent 6000

Page 51 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Cash in bank 60000 Salary 12000

Subscriptions: Postage 300

2016: 5000 Electricity charges 6000

2017: 83000 Purchase of furniture 20000

2018: 3000 91000 Books 3000

Sale of investments 90000 Defense Bonds 150000

Interest on investments 2000 Help to needy students 22000

Sale of furniture (book value 3200 Cash in hand 10900
Rs 3000)

Cash at bank 30000

260200 260200

Prepare income and expenditure a/c for the year ended December 31,2017 and a balance
sheet as on that date after following adjustments: Subscription for 2017, still owing Rs7000/-.
Interest due on defense bonds was 7000/-. Rent still owing was 1000/-. The book value of
investment sold was 80,000/- , Rs 30,000/- investment was still in hand. Subscription received
in 2017 included Rs 400/- from a life member. The total furniture on January 1, 2017 was worth
Rs 12000/-. Salary paid for the year 2018 is Rs 2000/-

Answer.

Opening balance Sheet

As on Dec 31,2017

Page 52 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Liabilities Amount Assets Amount

Capital fund(balancing fig) 201000 Outstanding subscription 5000

Investment 110000

Furniture 12000

Cash in hand 14000

Cash at bank 60000

201000 201000

Income and Expenditure A/c

Dr for the year ending Dec 31, 2017 Cr

Expenditure Amount Income Amount

To rent 6000 By Subscription 83000

Add: o/s rent ​1000 7000 Add: Outstanding subscription
7000

Less: Subscription of a life
member ​400 89600

To salary 12000 By outstanding interest on 7000
defense bonds
Less: advance salary

​ 2000 10000

To Postage 300 By interest on investment 2000

Page 53 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

To electric charges 6000 By profit on Sale of investment 10000

To help to needy 22000 By profit on sale of furniture 200

To surplus balancing 63500
figure)

108800 108800

Closing Balance sheet

for the year ending Dec 31,2017

Liabilities Amount Assets Amount

Capital fund 201000 Outstanding subscription 7000

Add: Surplus 63500 264500 Investment 30000

Subscription from member 400 Furniture 29000

Prepaid Subscription 3000 Advance salary 2000

Outstanding rent 1000 Outstanding interest on 7000
defense bonds

Books 3000

Defense bonds 150000

Cash in hand 10900

Cash at bank 30000

Page 54 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

268900 268900

Working Note:

1. Value of Investment sold =80000

Closing Value of investment= ​30000

Opening Value of investment = 110000

Page : 56 , Block Name : Numerical Questions

Q16 Following receipt and payment account was prepared from the cash book of Delhi
Charitable Trust for the year ending December 31, 2017.

Receipt and payment Account

Dr for the year ending December 31,2017 Cr

Receipts Amount Payments Amount

Balance b/d Charity 11500

Cash in hand 11500 Rent and taxes 3200

Cash in bank 12600 Salary 6000

Donations 9000 Printing 600

Subscriptions 42800 Postage 300

Legacies 18000 Advertisements 4500

Interest on Investments 4500 Insurances 2000

Page 55 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Sale of old newspapers 200 Furniture 21600

Investments 23000

Balance c/d

Cash in hand 9900

Cash at bank 16000

98600 98600

Prepare Income and Expenditure account for the year ended December 31, 2017 and a balance
sheet as on that date after the following adjustments:

(a) It was decided to treat one third of the amount received on account of donation as income.

(b) Insurance premium was paid in advance for three months.

(c) Interest on investments Rs 1100 accrued was not received.

(d) Rent Rs 600: salary Rs 900 and advertisement expenses Rs 1000 outstanding as on
December 31, 2017.

Answer.

Opening balance sheet

for the year ending December 31, 2017

Liabilities Amount Assets Amount

Capital fund (balancing fig) 24100 Cash in hand 11500

Cash at bank 12600

24100 24100

Page 56 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Income and Expenditure A/c

Dr for the year ending Dec 31, 2017 Cr

Expenditure Amount Income Amount

To Insurance premium Donation 3000
2000
Less: Prepaid insurance 1600
​400

To salary 6000 By interest on investment
4500
Add: salary O/s ​900 6900 5600
Add: Outstanding interest
1100

To Rents and taxes 3200 By subscriptions 42800

Add: Outstanding rent ​600 3800

To advertisement 4500 By sale of old newspapers 200

Add: Outstanding 1000 5500

To charity 11500

To printing 600

To postage 300

To surplus 21400

51600 51600

Page 57 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Closing Balance sheet

for the year ending Dec 31,2017

Liabilities Amount Assets Amount

Legacies 18000 Prepaid insurance premium 400

Outstanding rent 600 Outstanding interest on 1100
investments

Outstanding salary 900 Furniture 21600

Outstanding advertisements 1000 Investment 23000

Capital fund 24100 Cash in hand 9900

Add: Donation 6000 Cash at bank 16000

Add: Surplus 21400 51500

72000 72000

Working Note:

1. Insurance premium of 15 months given as 2000

thus, insurance premium of 3 months is 400.

Page : 57 , Block Name : Numerical Questions

Q17 From the following Receipt and Payment Account of a club, prepare Income and
Expenditure Account for the year ended March 31,2017 and balance sheet as on that date.

Receipt and payment Account

Page 58 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Dr for the year ending March 31, 2017 Cr

Receipts Amount Payments Amount

Balance b/d 3500 General expenses 900

Subscription: Salary 16000

2015-2016 2000 Postage 1300

2016-2017 70000 Electricity charges 7800

2017-2018 3000 75000 Furniture 26500

Sale of old books (costing 2000 Books 13000
Rs 3200)

Rent from use of hall 17000 Newspapers 600

Sale of newspapers 400 Meeting expenses 7200

Profit from entertainment 7300 T.V. set 16000

Balance c/d 15900

105200 105200

Additional information:

(a) The club has 100 members each paying an annual subscription Rs 900. Subscription
outstanding on March 31, 2016 were Rs 3600

(b) On March 31, 2017 salary outstanding amounted to Rs 1000, salary paid included Rs 1000
for the year 2016.

(c) On April 1, 2017 the club owned land and building Rs 25000, furniture Rs 2600 and books
Rs 6200.

Page 59 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Answer.

Opening balance sheet

for year ending March 31,2017

Liabilities Amount Assets Amount

Capital fund(balancing fig) 40900 Outstanding subscription 3600

Land and Building 25000

Furniture 2600

Books 6200

Cash 3500

40900 40900

Income and Expenditure A/c

Dr for the year ending Dec 31, 2017 Cr

Expenditure Amount Income Amount

To salary 16000 By Subscription 90000

Add: salary o/s 1000

Less: salary of 2016 1000 16000

To loss on sale of books 1200 By rent 17000

To general expenses 900 By sale of newspapers 400

To postage 1300 By profit from entertainment 7300

Page 60 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

To electric charges 7800

To newspaper 600

To meeting expenses 7200

To Surplus 79700

114700 114700

Closing Balance sheet

As on Dec 31,2017

Liabilities Amount Assets Amount

Advance subscription 3000 Outstanding subscription 21600

2016 1600

2017 ​ 20000

Capital fund 40900 Land and Building 25000

Add: Surplus ​79700 120600

Furniture 29100

Books 16000

TV Set 16000

Cash in hand 15900

123600 123600

Page 61 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Page : 57 , Block Name : Numerical Questions

Q18 Following is the Receipt and Payment Account of Women’s Welfare Club for the year
ended December 31, 2017:

Receipt and Payment Account

Dr for the year ending December 31, 2017 Cr

Receipts Amount (Rs.) Payments Amount (Rs.)

Balance b/d 7250 Salary 12500

Subscriptions 81750 Stationary 1700

Donations 3000 Electricity Charges 9550

Grant from Government 15000 Insurance 7500

Sale of newspapers 300 Equipment’s 30000

Proceeds of charity show 16500 Petty Expenses 500

Interest on Investments 7000 Expenses on charity 12900
shows
@ 10% for full year

Sundries income 400 Newspapers 1000

Lectures fee 16000

Honorarium to Secretary 12000

Balance c/d 27050

Page 62 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

131200 131200

Additional Information:

01.01.2017 (Rs.) 31.12.2017 (Rs.)

Outstanding Salaries 1200 1800

Insurance Period 700 300

Subscription Outstanding 3750 2500

Subscription received in advance 1750 1000

Electricity charges outstanding - 1250

Stock in stationary 2250 700

Equipment’s 25600 50200

Building 120000 114000

Prepare Income and Expenditure Account for the year ended December 31, 2017 and Balance
Sheet as on date.

Answer.

Opening balance sheet

as on Dec 31,2017

Liabilities Amount Assets Amount

Outstanding salaries 1200 Outstanding subscription 700

Page 63 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Advance Subscription 1750 Insurance prepaid 3750

Capital Fund (balancing 226600 Stationary 2250
figure)

Equipment 25600

Building 120000

Cash 7250

Investments 70000

229550 229550

Income and Expenditure A/c

Dr for the year ending Dec 31, 2017 Cr

Expenditure Amount Income Amount

To salary 12500 By Subscription 81250
Add: salary outstanding
1800
Less: salary outstanding as on
1.01.2017 ​ 1200 13100

To insurance 7900 By donation 3000

To electric charges 9550 By grant from government 15000

Add: Outstanding 1250 10800

To stationary 3250 By sale of newspapers 300

Page 64 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

To depreciation of equipment 5400 By Profits from charity show 3600

To depreciation of building 6000 By interest on investments 7000

To petty expenses 500 By sundries income 400

To newspapers 1000

To lecturers fee 16500

To Honorarium to secretary 12000

To Surplus (Balancing Figure) 34100

110550 110550

Closing Balance sheet

As on Dec 31,2017

Liabilities Amount Assets Amount

Advance subscription 1000 Outstanding subscription 2500

Outstanding salaries 1800 Insurance Prepaid 300

Capital fund 226600 Stationary 700

Add: Surplus 34100 260700 Equipment 50200

Otsd. Electricity Charges 1250 Building 114000

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Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Cash in hand 27050

Investments 70000

264750 264750

Working note:

1. Subscription received = 81,750/-

Less outstanding subscription = 3,750/-

Less: prepaid subscription = 1,000/-

Add: outstanding subscription = 2,500/-

Add: prepaid subscription = ​1,750/-

Subscription of the year = 81,250/-

2. Opening stationary = 2250/-

Add: purchases = 1700/-

Less: closing stationary = ​700/-

Loss of stationary = 3250/-

3. Opening equipment = 25600/-

Add: purchases = 30000/-

Less: closing equipment = ​50200/-

Depreciation on equipment = 5400/-

4. Insurance paid = 7500/-

Add: prepaid insurance = 700/-

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Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Less: prepaid insurance = ​300/-

Therefore insurance paid = 7900/-

Page : 58 , Block Name : Numerical Questions

Q19 As at march 31, 2015 the following balances have been extracted from the books of an
Indian Chartered Accountants Recreation Club and you are asked to prepare (1) Trading
Account for ascertaining gross profit delivered from running restaurant and dining room and (2)
Income and Expenditure Account for the year ended March 31, 2017 (3) and a Balance Sheet
as at that date.

Debit Balances Amount Credit Balances Amount
(Rs.) (Rs.)

Stock-in-hand 1170 Receipts Dining Room 87660

Purchases 24660 Subscriptions 9450

Dining Room 32370 Billiard’s Receipts 7300

Rent 10470 Interest on Fixed Deposits 410

Wages 18690 Sundry Creditors 270

Repairs and Renewals 5400 Grant form Institute 5370

Fuel and Light 5280 (permanent) 42000

Misc. Expenses 4050 Income and Exp. A/c. 1380

Cash in Hand 560

Cash at Bank 2760

Fixed Deposit 8500

Page 67 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Sundry Debtors 2250

China glass, cutlery & linen 600

Billiard Table 2070

Fixtures and Fittings 870

Furniture 4140

Club Premises 30000

153840 153840

Answer.

Trading account

for the year ending Mar 31, 2017

Particulars Amount Particulars Amount

To opening stock 1170 By closing stock 960

To purchases 24660 By receipts dining room 87660

To wages 18690

To gross profit (balancing 44100
figure)

88560 88560

Income and Expenditure A/c

Page 68 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Dr. for the year ending March 31, 2017 Cr

Expenditure Amount Income Amount

To depreciation: By Subscription 9450

Fixtures and Fittings 60

Billiard table 390

Furniture ​ 560 1010

To rent 10470 By billiard receipt 7300

To repairs and renewals 5400 By sundry receipts 410

To fuel and light 5280 By interest on fixed deposits 270

To miscellaneous expense 4050 By gross profit c/d 44100

To dining room 32370

To surplus 2950

61530 61530

Closing Balance sheet

As on March 31,2017

Liabilities Amount Assets Amount

Sundry creditors 5370 Closing stock 960

Government grant 42000 Fixtures and fittings 870

Page 69 of 70

Book : Accountancy Part-I Ncert Solutions | Chapter - 1 Accountancy

Less: depreciation ​60 810

Add: Surplus 2950 Billiard table 2070

Less: depreciation ​390 1680

Income and expenditure A/c 1380 Furniture 4140

Less: depreciation ​560 3580

Fixed deposits 8500

Sundry debtors 2250

Club premises 30000

China glass, cutlery & linen 600

Cash in hand 560

Cash at bank 2760

Total 51700 Total 51700

Page : 59 , Block Name : Numerical Questions

Page 70 of 70