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, 2006.

Receipt and Payment Account for the year ending 

as on December 31, 2006

Receipts

Amount

Rs

Payments

Amount

Rs

Balance b/d

 

 

General Expenses

3,200

Cash in hand

 

4,000

News paper

1,850

Cash at Bank

 

 15,550

Electricity

3,000

Subscriptions

 

 

Fixed deposit with bank

(on 31.06.2006) @ 10% p.a.

18,000

2005

1,200

 

2006

26,500

 

Books

7,000

2007

500

28,200

Salary

3,600

Sale of old newspapers

 

1,250

Rent

6,500

Govt. grant

 

12,000

Postage charges

300

Sale of old furniture (book value Rs5000)

 

 3,700

Furniture (purchased)

10,500

Interest received on FD

 

 450

Balance c/d

 

 

 

 

Cash in Hand

 3,000

 

 

 

Cash at Bank

8,200

 

 

65,150

 

65,150

 

 

 

 

 

Information:

(i)    Subscription outstanding as on 31.12.2005 Rs 2,000 and on December 31, 2006 Rs 1,500.

(ii)   On December 31, 2006 Salary outstanding Rs 600, and one month Rent paid in advance.

(iii)  On Jan. 01, 2005 organisation owned Furniture Rs 12,000, Books Rs 5,000.

Books of Adult Literacy Organisation

Income and Expenditure Account 

as on Dec. 31, 2006

Dr.

Cr.

Expenditure

Amount

Rs

Income

Amount

Rs

Loss on Sale of Old Furniture

1,300

Subscription

26,500

 

General Expenses

3,200

Add: Outstanding for 2006

1,500

28,000

Newspapers

1,850

 

 

Electricity

 

3,000

Sale of Old Newspapers

1,250

Salary

3,600

 

Government Grant

12,000

Add: Outstanding for 2006

600

4,200

Interest received on F.D.

450

 

 

 

 

Add: Accrued Interest

450

900

Rent

6,500

 

 

 

Less: Prepaid for 2007 {6,500×(1/13)}

(500)

6,000

 

 

Postages Charges

 

300

 

 

Surplus (Excess of Income over Expenditure)

22,300

 

 

 

 

 

 

 

42,150

 

42,150

 

 

 

 

             

Balance Sheet 

as on Dec. 31, 2005

Liabilities

Amount

Rs

Assets

Amount

Rs

Capital Fund on Dec. 31, 2005 (Balancing Figure)

38,550

Subscription Outstanding

2,000

 

 

Cash in Hand

4,000

 

 

Cash at Bank

15,550

 

 

Furniture

12,000

 

 

Books

5,000

 

38,550

 

38,550

 

 

 

 

 

Balance Sheet 

as on Dec. 31, 2006

Liabilities

Amount 

Rs

Assets

Amount 

Rs

Capital

38,550

 

Prepaid Rent

500

Add: Surplus

22,300

60,850

Books

5,000

 

 

 

Add: Purchases

7,000

12,000

Salary Outstanding

600

 

 

Subscription  Received in Advance for 2007

 500

Furniture

12,000

 

 


 

Add: Purchases

10,500

 

 

 

 

22,500

 

 

 

Less: Sale

(5,000)

17,500

 

 

 

 

 

 

Fixed Deposit

18,000

 

 

 

Add: Accrued Interest

450

18,450

 

 

 

 

 

 

Cash in Hand

 

3,000

 

 

Cash at Bank

 

8,200

 

 

Subscription Outstanding for 2006

1,500

 

 

 

Add: Outstanding for 2005

800

2,300

 

 

 

 

 

61,950

 

61,950

 

 

 

 

NOTE: In order to match the answer with the book, Adjustment (i) -  Subscription outstanding on 31.12.2005 Rs 2,000 has been taken as Subscription outstanding for 31.12.2005 Rs 2,000 and Subscription outstanding on December 31, 2006 Rs 1,500 has been taken as Subscription outstanding for December 31, 2006 Rs 1,500.

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