TS Grewal Solutions for Class 12 Accountancy Vol 1 Chapter 1

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Chapter 1 Company Accounts Financial Statements of Not-for-Profit Organizations

Question 1

From the data provided below, prepare Receipts and Payments account of Buddies club, Bangalore, for the year ended March 2018.

Cash balance on 1st April 2017 – 50,000/-; Subscriptions – 4,00,000/-; Donations – 1,00,000/-; Entrance fees – 45,000/-; Rent realized from club hall – 52,500/-; Electricity charge – 34,400/-; Taxes – 5,000/-; Salaries and wages – 2,15,000/-; Honorarium to the Secretary – 50,000/-; Interest received on investments – 30,000/-; Printing and Stationery – 4,000/-; Petty expenses – 9,500/-; Insurance premium paid – 3,000/-.

Solution:

Buddies Club, Bangalore

Dr. Receipts and Payments account for the year ended 31st March 2018 Cr.
Receipts Payments
To balance b/d (cash)
To subscriptions
To donations
To entrance fees
To Rent realized from club hall
To interest on investments
50,000
4,00,000
1,00,000
45,000
52,500
30,000
By Electricity charges
By taxes
By Salaries and wages
By Printing and Stationery
By Honorarium to the Secretary
By Petty expenses
By Insurance premium paid
By balance c/d (balancing figure)
34,400
5,000
2,15,000
4,000
50,000
9,500
3,000
3,56,600
6,77,500 6,77,500

Question 2:

From the following data, prepare an Income and Expenditure account:

Particulars
Fees collected, including ₹. 80,000/- for the previous year 3,80,000
Fees outstanding for the year 10,000
Salary paid including ₹. 3,000/- for the previous year 28,000
Salary outstanding at the year end 1,000
Entertainment expenses 3,000
Tournament expenses 12,000
Meeting expenses 18,000
Traveling expenses 6,000
Purchase of books and periodicals, including ₹.19,000 for purchase of books 29,000
Rent 10,000
Postage and Telephones 15,000
Printing and Stationery 4,000
Donations received 20,000

Solution:

Dr. Income and expenditure account for the year ended… Cr.
Expenditure Income
To Salaries – 28,000 By fees 3,80,000
(+) Outstanding at the end 1,000
(+) Outstanding at the end 10,000
29,000
(-) O/S at the beginning 3,000 26,000 (-) O/S at the beginning 80,000 3,10,000
To Entertainment expenses 3,000 By Donations 20,000
To Tournament expenses 12,000
To Meeting expenses 18,000
To Rent 10,000
To Traveling expenses 6,000
To Books and Periodicals 29,000
(-) Purchase of Books 19,000 10,000
To Postage and Telephones 15,000
To Printing and stationery 4,000
To Surplus: Excess of Income over expenditure 2,26,000
3,30,000 3,30,000

Question 3:

1st April 2018, assets and liabilities of India club are mentioned below:

Assets
Land and Building
Furniture
Cash in hand
Subscriptions receivable

3,00,000
70,000
30,000
50,000
Liabilities
Bank overdraft
Outstanding salaries
30,000
20,000

Now, ascertain the capital fund as on 1st April 2018.

Solution:

Balance Sheet of India club as at 1st April 2018

Liabilities Assets
Bank overdraft
Outstanding salaries
Capital fund*(balancing figure)
30,000
20,000
4,00,000
Cash in hand
Subscriptions receivable
Land and Building
Furniture
30,000
50,000
3,00,000
70,000
4,50,000 4,50,000

*Capital fund = Total Assets – Total Liabilities

= 4,50,000-50,000

= ₹. 4,00,000

Question 4

From the following data of Receipts and Payments account and additional data, calculate the income from subscriptions for the year ended 31st March 2018 and show it in the final accounts of the club:

Dr. Receipts and Payments account for the year ended 31st March 2018 Cr.
Receipts Payments
To Subscriptions 1,00,000

 

31/03/2017
31/03/2018
Subscriptions outstanding 20,000 40,000
Subscriptions received in advance 30,000 20,000

Solution:

Dr. Income and expenditure account for the year ended 31/03/2018 Cr.
Expenditure Income
By subscriptions 1,00,000
(+) Subscription O/S on
31/3/2018 40,000
Subscription received in
Advance on 31/3/201730,000
1,70,000
(-) Subscription received in
Advance on 31/3/2018 20,000
Subscription O/S on
31/3/2017 20,000
1,30,000

Balance Sheet as on 31st March 2018

Liabilities Assets
Subscription received in Advance 20,000 Subscription O/S 40,000

Question 5

Subscriptions received during the year ended 31st March 2019 are:

Year ended March 31st, 2018 4,000
Year ended March 31st, 2019 2,20,000
Year ended March 31st, 2020 10,000 2,70,000

There are 500 members, each paying an annual subscription of ₹. 600/-. ₹. 5,000/- were in arrears for the year ended 31st March 2018 at the beginning of the year ended 31/03/2019. Compute the subscriptions to be shown in Income and Expenditure account for the year ended 31/03/2019 and also show treatment of subscriptions in the income and expenditure account and Balance sheet.

Solution:

Subscriptions receivable for the year ended 31/03/2019

= Number of members X Annual subscription

= 500 X 600 = 3,00,000/-

Subscriptions outstanding

= Total subscriptions – Subscription received for the year-end 31/03/2019

= 3,00,000 – 2,20,000 = 80,000/-

Dr. Income and Expenditure account for the year ended 31st March 2019 Cr.
Expenditure Income
By subscription received 2,20,000
(+) Outstanding 80,000
3,00,000

Balance Sheet as at 31st March 2019

Liabilities Assets
Subscription received in advance 10,000 Subscription Outstanding:
For 2017-18 [5,000 – 4,000]
For 2018 – 19
1,000*
80,000

*Subscription in arrears for the year ended 31/03/2018 at the beginning of 2018-19 was 5,000/-, out of which 4,000/- was received in the year ended 31/03/2019.

Question 6

On the ground of the data furnished below, compute the amount of stationery to be debited to the Income and Expenditure Account of the Sports Club for the year ended 3103/2019.

Particulars 1st April 2018 (₹) 31st March 2019 (₹)
Stock of stationery 90,000 50,000
Creditors for stationery 1,00,000 1,20,000

Stationery purchased during the year ended 31/03/2019 was ₹. 5,00,000/-

Solution:

Sports Club

Dr. Income and expenditure account for the year ended 31st March 2019 Cr.
Expenditure Income
To stationery consumed (working note) 5,40,000

Working Note:

Stationery consumed (2018-2019)

Opening stock of stationery + Purchase of stationery – Closing stock of stationery

= 90,000 + 5,00,000 -50,000

= ₹. 5,40,000/-

Question 7

From the following data compute the amount that will be shown against the stationery account in the Income and Expenditure account for the year ended 31/03/2019:

Particulars 01/04/2018 (₹) 31/03/2019 (₹)
Creditors for stationery 5,000 12,000
Stock for stationery 15,000 30,000

During the year ended 31/03/2019, payment made to creditors amounted to 57,000/-. Stationery purchased in cash during the year was 20% of the total purchase of stationery.

Solution:

  • Calculation of credit purchases of stationery:
Dr. Creditors for Stationery Account Cr.
Particulars Particulars
To bank a/c
To balance c/d
57,000
12,000
By balance b/d
By stock by stationery a/c [Credit purchase] (balancing figure)
5,000
64,000
69,000 69,000
  • Calculation of cash purchases of stationery:

Let the total X be ‘x

Cash purchases would be 20% of ‘x’, i.e., ‘x’/5

Then, credit purchase = 80% of ‘x’, i.e., 4‘x’/5

x’/5 + 64,000 = ‘x

4‘x’/5 = 64,000/-

X’ = 64,000 X 5/4 = 80,000 (Total Purchase)

Cash Purchase = Total purchase – Credit purchase

= 80,000 – 64,000 = 16,000/-

  • Stationery consumed to be debited to Income and Expenditure account:

Opening stock of the stationery + Purchases [cash+credit] – Closing stock of the stationery

= 15,000 + [64,000+16,000] – 30,000

= 15,000 + 80,000 – 30,000

= 15,000 + 50,000

= ₹. 65,000/-

Question 8

From the following information, calculate the amount that will be shown against a stationery account in income and expenditure account for the year ended 31st March 2019.

Particular 1st April, 2018 (₹) 31st March, 2019 (₹)
Creditors for Stationery
Stock of Stationary
4,600
15,000
11,800
30,400

During the year ended 31st March 2019, payment made to creditors amounted to ₹56,800. Stationery purchased in cash during the year was 20%of the total purchase of stationery.

Solution:

Calculation of credit purchases of stationery:

Dr. Creditors for stationery account Cr.
Particulars Particulars
To Bank A/c
To Balance A/c
56,800
11,800
By Balance b/d
By Stock of stationer A/c (Credit Purchases)
(Balancing Figure)
4,600
64,000
68,600 68,600

Calculation of credit purchases of stationery:

Let the total purchases be X

Cash purchases will be 20% of X, i.e. X/5

Credit purchase will be 80% of X,i.e, 4X/5

X/5 + ₹64,000 = X

4X/5 = ₹64,000

X= ₹64,000 x 5/4 =  ₹ 80,000 (Total purchase)

Cash Purchases = Total Purchase – Credit Purchase

= ₹ 80,000  – ₹ 64,000 = ₹ 16,000 

Stationery consumed to be debited to Income and Expenditure Account:

= Opening Stock of Stationery + Purchase (Credit and Cash) – Closing stock of stationery

= ₹15,000 + ₹ 64,000 (Credit) + ₹ 16,000 (Cash) – ₹ 30,400 = ₹ 64,600.

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