NON-PROFIT ORGANISATION

Non-Profit making organizations are those which do not buy/manufacture and sell goods
and whose primary object is not to earn profit. Their object is to do good to the society
through welfare activities, e.g., Hospitals, Schools, Universities, Clubs, Hospitals,
Libraries etc. it is also called Non Trading Concern.

Trading/Profit making Concern

All institution which main objective is to earn profit and deal in buying and selling of
goods for earning profit are called Trading concerns.

Since Non profit Organizations aim is not to earn profit, so they are not under legal
compulsion to audit their accounts and theirfor they are not maintaining proper books of
accounts.

These organizations conduct their affairs and activities and record is usually maintained
through a Cash Book.
Cash Book:
The Book in which all cash transactions are primarily recorded according to dates is called
Cash Book.

Dr. Cash Book Cr.

Date Particulars V.NO L.F. Amount Date Particulars V.NO L.F. Amount

Receipt and payment Account:

A receipt and payment account is a summarized Cash Book (cash and bank) for a given
period. Spicer and Pegler

ABC
Receipts and payments Account
For the Year ended…………………
Receipts Rs. Payments Rs.
Balance b/d ……..

All Cash Receipts of Capital …….. All Cash Payments of Capital ……..
and Revenue Nature received and Revenue Nature made
during the year during the year

……..
Balance c/d
xxxxxx xxxxxx
Characteristics:
The following are the features of Receipts and Payments Account:

1. It is an abridged form of Cash Book.

2. All cash receipts (Capital and Revenue nature) are recorded on debit and all cash
payments (Capital and Revenue nature) are recorded on credit side.
3. Only cash transactions are recorded here.
4. It will generally show Debit Balance. ( but a credit or nil balance can also be appeared).
5. Its closing balance indicates closing cash in hand and closing cash at bank.
6. It is not an account within the Double Entry System, it is a statement only.
7. It is prepared on the last day of the accounting year.

Advantages:
Following are the advantage of Receipts and Payments Account:

1. Total receipts and total payments under various heads are available at a glance.
2. The amount of opening cash and closing cash can be verified and calculated easily.
Because
The total of Debit side of Cash Book will equal to the Receipt side of Receipts and
payments account and the total of Credit side of Cash Book will agree to the Payments
side of Receipts and Payments Account.

Difference between Cash Book and Receipt and Payment Accounts

 Cash Book Receipt and Payment Accounts
1. Cash Book is mandatory and is to be It is optional and are not prepared by following
prepared by following double entry double entry system.
system.
2. Each transaction is recorded here Each transaction is not recorded here
separately in chronological (according to
separately; all the transactions are recorded at a
date) order. time at the end of accounting year in a
classified form.
3. Each entry is followed by narration. No narration is written here.
4. Ledger reference recorded here. No Ledger reference recorded here.
5. Daily cash balance can be calculated Daily cash balance cannot be calculated from
from this book. this book.
6. All concerns (non-profit-seeking & Only non-profit-seeking concerns prepare it.
profit-seeking) prepare it.

7. Whenever a cash transaction takes place, It is prepared on the last day of a year. In other
it is recorded in this book. In other words, it is a periodical account.
words, it is a Current Account.

INCOME AND EXPENDITURE ACCOUNT

 The account through which surplus or deficit of a non-profit making organization is
Calculated, is called income and expenditure Account.

Specimen
Name of Organization
Income & Expenditure Account
For the Period Ended
Expenditures Rs. Incomes Rs.

General expenses `××× Subscription

Salaries and wages ××× Add O/S subscription
Secretary’s salary ××× Less subscription in advance`
Rent, rates and taxes ××× Less subscription for last year `×××
Printing and stationary ××× Entrance fee / Admission fee ×××
(If no instruction is given in question)
Repairs ××× Profit on refreshment ×××
Depreciation on fixed assets ××× Locker’s rent ×××
Gas and electric light charges ××× Fee from non-members ×××
Car expenses ××× Municipal grant ×××
Diet expenses ××× Interest incomes ×××
Insurance ××× Donations ×××
Grants to members ××× Proceeds from lectures ×××
Postage and stamps `××× Sale of news papers ×××
Sundry expenses ××× Billiard receipts ×××
Office expenses ××× Dividend on shares ×××
Telephone charges Misc. sundry receipts /
××× Misc. revenue receipts (etc.) ×××
News papers ×××
Interest expenses ×××
Entertainment expenses Deficiency / Excess of expenditure
××× over income ×××
Advertisement expenses ×××
Loss on sale of fixed assets ×××
Wages ×××
Building maintenance ×××
Other revenue expenditure (etc.) ×××
Surplus / Excess of income over
expenditure
Total of Dr. Side ××× Total of Cr. Side ×××
1. Surplus:
Excess of incomes over expenditures is called surplus. (Income or more than Expense).

2. Deficit:
Excess of expenditures over incomes is called deficit. (Expense is more than Inocme).
At first, Receipts and Payments Account is prepared by analyzing the Cash book subsequently,
Income and Expenditure Account is prepared in the following manner:

HOW RECEIPT AND PAYMENT ACCOUNT IS CONVERTED

INTO INCOME AND EXPENDITURE ACCOUNT:
1) Exclude the Opening and Closing balances of Receipts and Payments Account.
2) Exclude all the capital items.
3) Exclude all revenue items relating to last or next year.
4) Include all items of Income or expenditure relating to the current year, if they are
not received or paid in the current year.
5) Charge depreciation on all assets if required.

Balance Sheet:
Balance sheet is prepared at the end of accounting period by the non profit concerns in order to
show their financial position on a particular day.

Name of organization
 Balance sheet
As on ____________

Assets Rs. Liabilities Rs.

Fixed Assets: Capital fund ×××

Add capitalized receipts ×××

Add surplus ××× ×××xxx

Long term liabilities:

Current Assets:

Current Liabilities:

×××xxx ×××xxx

Key Points:

1. Depreciation:
Gradual decrease in the value of Fixed Asset is called depreciation.

Depreciation
 Debited to Income Deduct from
&Expenditure Account Asset in B/S

Note: If the Asset is purchased during the year than Depreciation is charged from the date
when it is purchased.

If date of purchase of Asset is not mention than we assume it is purchased in the Middle of
the Asset and Depreciation is charged for 6 months.

2. Sale of an Asset:
Some time an asset is sold in the market and their arises a profit or loss on the sale
of such asset. If WDV of asset is less than sale proceeds it will be Considered as
profit on sale of an asset and if WDV of asset is more than sale proceeds it will be
considered as loss on sale of an asset.

Sale of an Asset

Profit on Sale Loss on Sale

Debited to income Credit side of B/S

& expenditure A/c. under capital Fund
Note: however if amount of Profit on sale of Fixed asset is small we can also recorded it as
income (Credit side of Income and Expenditure A/c.)

3. Purchase and Sale of News Paper:

Purchase and sale of news paper dose not regarded as acquisition of Asset, it will be
treated as Revenue item. So its treatment will be as follows:

News Paper
 Purchase of Paper Sale of Paper

Debited to income Credited to income

& expenditure A/c. & expenditure A/c.

4. Purchase and Sports Equipment:

Sports Material include Bat, Ball, Billiard and Snooker Table etc. Purchase and
sale of Sports Material dose not regarded as acquisition of Asset, it will be treated as
Revenue item. So its treatment will be as follows:
Sports Material

Purchase of Material Sale of Material

Debited to income Credited to income

& expenditure A/c. & expenditure A/c.
Note: if Depreciation is required to calculate in the question than amount of Depreciation
is recorded on debit side of Income and Expenditure account and asset Net Book Value will
be recorded on debit side of Balance sheet as an Asset.

5. Subscription:
Subscription has two types:

a) Subscription:
It is monthly or annually contribution (as per Rule) by members to non-trading concerns to
enable it to perform its functions.

b) Special Subscription:
 The additional subscription collected from members over and above the regular subscription
for some special purpose is known as special subscription . e.g. purchase of Building,
Distribution of prizes etc.

Subscription

Subscription Special Subscription

Credited to income Credited to B/S

& expenditure A/c. under capital Fund

Note: (If the Subscription relates to current year ADD it and if it is not relate to current
year deduct it). Or more precisely we can say

Last year’s Subscription received this year LESS

Next year’s Subscription received this year LESS

Current year’s Subscription received last year ADD

Current year’s Subscription not yet received ADD

6. Admission Fee / Entrance Fee:

An amount which is paid by a new member at the time of admission in addition to

subscription is called admission fee. It is also called Entrance Fee.

It may be treated a revenue receipt or a capital receipt according to by-laws of the

Institution. It may also be treated as partly revenue and capital receipt. (e.g. 10% to be
recorded as revenue and 90% as capitalized).

Admission Fee
 Treated as Treated as Treated as partly
Revenue Capital Revenue & Capital

Credited to income Credited to B/S Credited to income Credited to B/S

& expenditure A/c. under Capital Fund & expenditure A/c. under Capital Fund

7. Life Membership Fee:

The amount which is paid by member’s lump sum to become a life member of organization is known
as life membership fee.

It may be treated a revenue receipt or a capital receipt according to by-laws of the

Institution. It may also be treated as partly revenue and capital receipt. (e.g. 10% to be
recorded as revenue and 90% as capitalized).

Life Membership Fee

 Treated as Treated as Treated as partly
Revenue Capital Revenue & Capital

Credited to income Credited to B/S Credited to income Credited to B/S

& expenditure A/c. under Capital Fund & expenditure A/c. under Capital Fund

8. Donation:

Amount received from members and general public by way of gift to organization is known as
Donation. Whether such donation is to be treated as Revenue or Capital depends upon the purpose
for which it is collected. If Donation is collected for some special purpose is known as special
subscription. e.g. purchase of Building, Charity Fund and Distribution of prizes etc.

Donation
 Simple Donation Special Purpose Donation
(Small Amount) (Large Amount)

Credited to income Credited to B/S

& expenditure A/c. under capital Fund

9. Legacy:

Legacy refers to money or property that is left to somebody in a will is known as legacy. It will always
treated as Capital Receipt. It will be recorded on Asset side of Balance Sheet as well as on
liabilities side of Balance Sheet under the head capital Fund.

10. Capital Fund / General Fund / Accumulated Fund:

The excess of total assets over total liabilities (external) of a concern is called capital fund. It is the
capital of Non Profit making Organizations. It is always shown on Liability Side of Balance Sheet as
Capital.

1. The following is the Receipts & Payments Account of a club for the year ended 31.12.05.

Dr. RECEIPTS AND PAYMENTS ACCOUNT Cr.

Receipts Rs. Payments Rs.
Balance b/d 5,000 Sports Equipments 7,000
Subscription: Salaries & Wages 3,000
2004 2,000 Office Expenses 400
2005 10,000 Electric Charges 600
Donation 1,000 Telephone Charges 600
Entrance Fees 2,000 Balance c/d 8,400
(to be capitalized)
20,000 20,000
 (a) In 2004 subscription for 2005 was received Rs. 1,000.
(b) Outstanding subscription Rs. 1,500.
(c) Outstanding salaries & wages Rs. 1,000.
(d) Depreciation to be charged at 20% on sports equipments.

Required:
Prepare from the above particulars the Income & Expenditure Account of the club.

Ans: Surplus: Rs. 6,500

2. From the following Receipts & Payments Account of Race Cource Club during the year
2004 and further particulars given below prepare an Income & Expenditure Account of the club
for the year ended 31st December 2004 and also a Balance Sheet as on that date.

RECEIPTS AND PAYMENTS ACCOUNT

Dr. For the year ended at 31st December, 2004 Cr.
Receipts Rs. Payments Rs.
Subscription 5,200 Salaries 1,400
Donation 300 Rent 1,300
Admission Fees 100 Printing & Stationery 100
Sale of old newspapers 60 Postage 80
Newspapers 70
Furniture 1,000
Balance c/d
Cash 150
Bank 1,560 1,710

5,660 5,660

Subscription includes Rs. 250 collected in advance for the year 2005. A sum of Rs. 400 is due by
members on account of subscription on 31.12.2004. The following expenses are outstanding on
31.12.2004, Salaries Rs. 300 and Rent Rs. 200.

Ans: Surplus: Rs. 2,360 B/s Rs. 3,110

3. Below is given the Receipts & Payments Account of Virgo Club. Lahore, Prepare Income
& Expenditure Account as on 31st December, 2005 and a Balance Sheet as on that date,
from it and subjoined information.

Dr. Cr.
Receipts Rs. Payments Rs.
 Balance b/d 2,476 General Expenses 1,084
Annual subscription 3,260 Salaries 1,100
Life Member Fees 500 Furniture 1,600
Entrance Fees 400 Rent 1,120
Miscellaneous Receipts 466 Printing 250
Interest 80 Repairs 300
Balance c/d 1.728

7,182 7,182

On 31st December, 2005 the annual subscriptions in arrears amounted to Rs. 700. Rs. 200 is to be
written off as depreciation on furniture.

Ans: Surplus: Rs. 902, B/s Rs. 3,828

4. The following is the Receipts & Payments Account of Young men’s Society for the year
ending 31st December, 2005. You are required to prepare Income & Expenditure Account
for the year ending 31st December, 2005 and Balance Sheet as on that date.

RECEIPTS AND PAYMNETS ACCOUNT

Receipts Rs. Payments Rs.
Balance 1.1.2005 3,485 Books 6,150
Entrance Fees 650 Printing & Stationery 465
Donations 6,000 Newspaper 1,110
Subscriptions 8,565 Sports Material Purchased 5,000
Interest on investments 200 Repairs 650
Sale of furniture (face value 1000) 685 Investments 2,000
Sale of old papers 465 Furniture 1,000
Receipts from recreations 865 Salaries 1,500
Miscellaneous receipts 125 Balance 31.2.2005 3,165

21,040 21,040

Capitalize entrance fees and donations. Sports Material valued on 31.12.2005 at Rs. 4,000.

Ans: Surplus: Rs. 5,180, B/s Rs. 15,315

4. From the particulars given below prepare the Income & Expenditure Account and the Balance
Sheet of a Music Club started on 01.04.2003 for the year ended on 31st March 2004:

Receipts Rs. Payments Rs.

Life Member’s fees 8,000 Land & Buildings 20,000
Donations 12,000 Concert Expenses 10,000
Entrance fees 6,000 Furniture 2,500
Subscriptions 6,000 Purchase of public address system 4,000
 Interest on securities 400 Salaries 800
Rent on a part of the building let out Printing & Stationery 600
Annual grant from the State 6,000 Telephone expenses 300
Government Investments 3,000
9,600 Annual award for the Musician of the
year 3,800
Cash in hand 1,000
Cash at bank 2,000

48,000 48,000

One third of the entrance fees received was to be credited to Revenue and Donations and Life
Member’s Fees are to be capitalized. Interest on securities due but not received amount to Rs.
100. Depreciate Land & Buildings, furniture by 5% and Public Address system by 2%
outstanding subscriptions for the year 2003—2004 are Rs. 200 and advance receipt of
subscriptions on account of the year 2004—2005 is Rs. 400. Salaries unpaid for the year 2003—
2004 amount to Rs. 125.

Ans: Surplus: Rs.7,070 B/s 31,595

5. The following particulars are obtained from the books of Young men’s Association, for
the year ended December 31, 2004.

Receipts and Payments Account for the year ended December 31, 2004.

Receipts Rs. Payments Rs.

Balance b/d 7,000 Salaries 3,000
Subscriptions: Printing & Stationery 300
2003 500 Postage & Telephone 1,800
2004 9,000 Municipal Taxes 1,600
2005 1,000 10,500 Cutlery Purchases 3,000
Entrance Fees 1,000 Electricity Charges 1,200
Life Membership Fees 5,000 Annual Dinner Charges 4,800
Annual Dinner 6,000 Fixed Deposit with ABL
Hall Rent 3,000 Bank 12,000
Miscellaneous Income 600 Balance c/d 5,400

33,100 33,100

 On 1st January, 2004 the Association had a building worth Rs. 2, 00,000, cutlery worth
Rs. 6,000 and kitchenware worth Rs. 8,000. There is a deposit with the Telephone
Department under the ‘Own Your Telephone Scheme’ amounting to Rs. 8,000. Entrance
Fees and Life Membership Fees are to be capitalized.
 You are required to depreciate building by 5%, cutlery by 40% and kitchenware by 25%.
The Annual Subscription of the Association Members is Rs. 10, and 100 members are in
arrears during this year.
  Municipal taxes were paid up to March 31, 2005.
You are required to prepare an Income & Expenditure Account for the year ended December 31,
2004 and a Balance Sheet as on that date, after making the necessary adjustments.

Ans: Deficit: Rs. 7,100, B/s Rs. 229,400

6. The following is the Receipts and Payments Account of a Sports Club for the year ended
31st December, 2005.

Dr. RECEIPTS AND PAYMENTS ACCOUNT Cr.

Receipts Rs. Payments Rs.
Balance 1st Jan. 2005 2,800 Secretary’s Salary 3,600
Entrance Fees 500 Upkeep of Grounds (c) 2,200
Subscription (a) 8,700 Wages to Ground Men (d) 2,500
Proceeds of concerts 1,500 Ground Rent 200
Interest of Investment (b) 500 Printing & Postage 200
Sundry Repairs 200
Balance on 31st Dec. 2005 5,100
14,000 14,000

(a) This item includes subscriptions outstanding brought over from previous year Rs. 400.
(b) This item includes Rs. 100 in respect of interest accrued in the proceedings period.
(c) This item includes Rs. 200 applicable to the previous year.
(d) This item includes Rs. 100 applicable to the previous year.

 Other ledger balances at the commencement of the accounting period were: capital fund
Rs. 40,500, Income and Expenditure Account credit balance brought forward, Rs. 8,900,
Club premises and grounds Rs. 30,000, Investments Rs. 10,000, and Sports equipment
Rs. 2,400, Furniture and Fixtures Rs. 4,000.
 Entrance fees are to be capitalized. The outstanding liabilities on 31 st December, 2005
were: Wages Rs. 200, Sundry repairs Rs. 50, Interest accrued and Outstanding on
Investment was Rs. 150. Depreciate furniture by 5% and sports equipment by 10%.
 From the above particulars prepare a Balance Sheet at the commencement of the period
and Income and Expenditure Account for the year ended 31 st December 2005, and a
Balance Sheet as on the same date.

Ans: Surplus: Rs. 1,060, B/s Rs. 51,210

7. The following was the Receipts and Payments Account of Model Town Literary Society
for the year ending 31st December, 2005.

RECEIPTS AND PAYMENTS ACCOUNT

 Rs. Rs.
Balance b/d 500 Rent & Taxes 1,000
Entrance Fees 1,500 Wages 500
Subscriptions 10,000 Lighting Charges 250
Life member’s Fees 3,000 Lectures, Fees 1,000
Donations 1,000 Books 1,500
Interest on Investments 100 Office Expenses 2,000
Receipts from Lectures 3,000 Fixed Deposits 10,000
(on 1.7.05 at 10%)
Furniture 2,000
Cash in Hand 50
Cash at Bank 800

19,100 19,100

 At the beginning of the year Society had the following assets: Books Rs. 4,000; Furniture
Rs. 1,000; Investments, Rs. 1,000.
 Subscriptions receivable at the beginning of the year was Rs. 1,000, at the end of the year
is Rs. 500. Rent was outstanding for 6 months (Rs. 500) both at the beginning and at the
end of the year. Capitalize entrance fees and life member’s fees.
 Depreciate Rs. 300 on Furniture and Rs. 100 on books. Interest on fixed deposit was not
yet received.
You are required to prepare Income and Expenditure Account for the year ending 31 st
December 2005 and a Balance Sheet as on that date.

Ans: Surplus: Rs. 8,950, B/s: Rs. 20,950

8. From the following Receipts & Payments Account of the LIBERTY Club prepare an
Income & Expenditure Account for the year ended 31 st December, 2004 and the Balance
Sheet as at that date.

RECEIPTS AND PAYMENTS ACCOUNT

Dr. For the year ended 31st December, 2004 Cr.
Receipts Rs. Payments Rs.
Balance b/d 130 Rates 2,500
Entrance Fees 210 Stationery 340
Subscriptions: General Expenses 3,610
2003 70 Capital Expenditure 2,500
2004 10,520 Repairs 300
2005 420 Mortgage Interest 1,600
Locker Rent 300 Balance c/d 2,460
Miscellaneous 1,660
 13,310 13,310

The following further information is available:

1. Locker rent Rs. 20 referred to the previous year and Rs. 30 is still owing.
2. Rates Rs. 620 referred to the previous year and Rs. 620 is still owing.
3. Subscription unpaid for the current year Rs. 210.
4. The capital expenditure of building up to 31st December, 2003 was Rs. 67,500 on which
there was a mortgage of Rs. 40,000 at 6% p.a.
5. Depreciation is to be provided on building including additions at 5%.

Ans: Surplus: Rs. 260, B/s: Rs. 69,200

9. Given below is the Receipts and Payments Account of Eagle Club for the year ending 31 st
December 2004:

Rs. Rs.
Balance b/d 10,250 Salaries 6,000
Subscriptions: General Expenses 750
2003 400 Drama Expenses 4,500
2004 20,500 Newspaper etc 1,500
2005 600 Municipal Taxes 400
Donations for Prize Fund 5,400 Charity 3,500
Proceeds of Drama Tickets 9,500 Investments 20,000
Sale of Waste Paper 450 Electricity Charges 1,450
Balance c/d 9,000

47,100 47,100

Prepare the Club’s Income & Expenditure Account for the year ended 31st December, 2004 and
its Balance Sheet as on that date, after taking the following information into account:
(a) There are 500 members, each paying an annual subscription of Rs. 50, Rs. 500 being in
arrears for 2003.
(b) Municipal taxes amounting to Rs. 400 per annum have been paid up to 31 st March 2005,
and Rs. 500 for salaries is outstanding.
(c) Buildings stood in the books at Rs. 50,000 and it is required to write off depreciation at
5%.
(d) 3% interest has accrued on investments for 5 months.

Ans: Surplus: Rs. 14,200, B/s Rs. 81,450

10. The following is the statement of Receipts and Payments of Mumtaz Hospital for the
year ending 31st December 2005:

Receipts Rs. Payments Rs.

Opening Balance Furniture Purchased 100
 Cash 500 Salaries 23,000
Bank 8,000 Instruments Purchased 500
Govt. Securities 1,80,000 Diet Expenses 2,000
Receipts: Surgery & Dispensary 1,000
Subscriptions 25,000 Rent & Taxes 500
Interest 9,000 Insurance 200
Donations for charity fund 4,000 Office Expenses 700
Miscellaneous 300 Miscellaneous Expenses 100
Closing Balances:
Bank 18,000
Cash 700
Govt. Securities 1,80,000

2,26,800 2,26,800

You are asked to prepare the Income & Expenditure Account for the year and the Balance Sheet
as on 31st December 2005. The other assets on 1st January 2005 were:
 Furniture Rs. 2,000; Land, Rs. 50,000; Building Rs. 1, 50,000; Instruments, Rs. 3,500.
The Govt. Securities of the face value of Rs. 2, 00,000 (cost Rs. 1, 80,000) represent
investments of the 2004 Endowment Fund.
 The subscriptions received include Rs. 10,000 for the year 2004 but Rs. 7,000 is
outstanding for 2005.
 Salaries paid include Rs. 1,000 for 2004 but Rs. 1,500 is payable for 2005. I
 nterest received includes Rs. 2,000 for 2004 but Rs. 2,300 is outstanding for 2005.

Ans: Surplus: Rs. 3,600, B/s: Rs. 414,100

11. Below given was the Receipts & Payments Account of Crescent Club for the year ending
30thSeptember, 2005.

Receipts Rs. Payments Rs.

Balance b/d: Secretary’s Honorarium 4,800
Cash in hand 150 Rates & Taxes 1,260
Cash at bank 8,230 8,380 Printing & Stationery 470
Subscriptions 10,710 Sundry Expenses 1,530
Receipts for Dinner 2,400 Wages 840
Net Receipts for Recreation 4,270 Dinner Expenses 2,390
Bank Interest 230 Bar stock Purchased 5,770
Bar Receipts 7,450 Repairs 320
Cash paid in excess than the Car Purchased
 balance 20 (excluding Rs. 3,000 received
from the sale of an old car) 12,600
Balance as per Pass Book c/d 3,480

33,460 33,460

Additional information was as follows:

1.10.2004 30.9.2005
Subscriptions Receivable 1,200 980
Cheques issued for printing not presented for payment 90 30
Club Building (Cost) 29,000
Depreciation on Buildings 18,800
Car purchases price 12,190
Depreciation on car 10,290
Value on Bar Stock 710 870
Amount payable in connection with Bar stock 590 430

Cash paid in excess than the balance, Rs. 20 relates to Secretary’s Honorarium. Due to lack of
money in the club, secretary not collected the amount. But Rs. 4,800 includes the full
Honorarium for the year 2004—2005.
Depreciate club buildings at 5% under written down value method and car at 15% for the
complete year.
After adjusting Bank balance as per cash book prepare club’s Income and Expenditure Account
for the year ending 30th September 2005 and a Balance Sheet as on that date.

Ans:[Surplus: Rs. 6,090, B/s: Rs. 28,250

12. From the following prepare an Income & Expenditure Account for the year ended 31 st
March, 2005 and the Balance Sheet for the same date:

Rs. Rs.
April 12004 March 31 2005
Balance: Salaries 3,600
Cash at bank 455 Rent 600
Cash in office 55 Printing & Stationery 145
2005 Postage 25
March 31 Bicycle (purchase) 95
Subscription 3,000 Prize Bond 680
(including Rs. 200 for 2005—06)
Interest on Investments 1,500 Balance:
 (cost of investments Rs. 30,000) Cash in Office 12
Bank Interests 10 Cash at Bank 113
Sale of Scooter 250

5,270 5,270

Subscriptions include Rs. 120 for 2003—2004. Also rent includes Rs. 50 paid for March 2004.
Subscriptions amounting to Rs. 150 have still to be collected for the year 2004—05). Rent for
March 2005 has still to be paid and Rs. 25 is outstanding against a stationery bill. The book value
of the scooter was Rs. 320.

Ans: Deficit: Rs. 125, B/s: Rs. 31,050

13. Following is the Receipts & Payments Account of an Officer’s Club for the year ended,
31st December 2003.

Rs. Rs.
Opening Balance: 8,000 Salaries 3,600
Subscription: Stationery 350
2002 2,000 Telephone Charges 400
2003 18,000 Insurance 1,200
2004 1,500 Miscellaneous Expenditure 480
Entrance Fees 1,300 Subscriptions to newspaper 640
Sale of old Magazines 50 Purchase of Sports Material 6,000
Interest on Investments 500 Closing Balance 19,480
Other Receipts 800

32,150 32,150

2002 December 31st ---- Balances of investments Rs. 10,000, Furniture Rs. 5,000, Buildings Rs.
25,000; Subscriptions due Rs. 3,000, Subscriptions received in advance of 2003 Rs. 2,000; Stock
of sports material Rs. 4,000; stock of stationery Rs. 200. The Balance as on 31 st December 2003
are ---- subscriptions due Rs. 2,500; stock of sports material Rs. 3,000; stock of stationery Rs.
150. Depreciate Furniture by 10% and Building by 5%. Interest due on investment Rs. 500.
Prepare an Income & Expenditure Account and Balance sheet.

Ans: Surplus: Rs. 10,180, B/s Rs. 64,880