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 31.3.2007 and its Balance Sheet as on 31.3.2007:

 

Rs

(a)

Donation received during the year for the construction of a permanent Pavilion

12,25,000

 

Expenditure incurred up to 31.3.2007 on its construction

10,80,000

 

The total estimated expenditure on construction of Pavilion being

25,00,000

 

 

 

(b)

Tournament Fund:

 

 

Balance as on 1.4.2006

10,700

 

Subscriptions for tournament received during the year

65,800

 

Expenditure incurred during the year on conducting tournaments

72,400

 

 

 

(c)

Life Membership fee received during the year

28,000

Give reasons for your answers

(a)

Books of Bombay Women Cricket Club

Balance Sheet 

as on March 31, 2007

Liabilities

Amount

Rs

Assets

Amount

Rs

Donation for Pavilion

12,25,000

 

Construction of Pavilion in Progress

10,80,000

Less: Exp. On construction of Pavilion

(10,80,000)

1,45,000

 

 

 

 

 

 

Capital 

 

 

 

Add: Pavilion Construction

10,80,000

10,80,000

 

 

 

 

 

 

Reason

Donation for construction of Pavilion is a donation for specific purpose.

Expenses on construction on Pavilion is a capital expenditure.

(b)

Balance Sheet 

as on March 31, 2007

Liabilities

Amount

Rs

Assets

Amount

Rs

Tournament Fund

10,700

 

 

 

Add: Subscription for Tournament

65,800

 

 

 

76,500

 

 

 

Less: Tournament Expenses

(72,400)

4,100

 

 

 

 

 

 

Reason

All funds received are treated as capital receipts and expenses related to any fund are deduced from the concerned funds.

(c)

Balance Sheet 

as on March 31, 2007

Liabilities

Amount

Rs

Assets

Amount

Rs

Life Membership Fees

28,000

 

 

 

 

 

 

Reason

Life Membership Fees are considered as capital receipts and are shown on the Liabilities side of the Balance Sheet, if nothing is specified about its treatment. But if it is to be treated as revenue item, then it is shown on the credit side of the Income and Expenditure Account.

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