Bills of Exchange — Book Keeping & Accountancy STD 12 Commerce / Arts — Question

Simple Example - Prepare Income and Expenditure Account only
From the following Receipts & Payments Account and Adjustments given below you are required to prepare Income and Expenditure Account for year ended 31st March 2020 of Venna Cultural Association, Satara.

Dr.	Receipts & Payments Accounts for the year ended 31st March 2020				Cr.
Receipts	Amount	Amount _(₹)	Payments	Amount _(₹)	Amount _(₹)
To Balance b/d			By Rent
Cash in Hand	10,000		2018-19	700
Cash at Bank	19,200	29,200	2019-20	54,300	55,000
To Subscriptions	-		By Fixed Deposit		47,000
2018-19	15,000		By Sundry Exp.		8,000
2019-20	1,00,000		By Insurance		12,000
2020-21	8,000	1,23,000	By Printing & Stationery		6,000
To Donations	-	25,000	By Picnic Expenses		18,000
(General)			By Salaries		20,000
To Entrance fees		15,000	By Traveling Expenses		13,000
To Interest on Fixed		4,800	By Advt. (2018 - 19)		7,000
Deposit			By Balance c/d
To Picnic Receipts		20,000	Cash in Hand	15,000
			Cash at Bank	16,000	31,000
		2,17,000			2,17,000

Adjustments :
1) Outstanding Rent for the current year was ₹ 7,000.
2) 60 % Entrance fees should be capitalised.
3) Outstanding subscription for the current year was ₹ 20,000.
4) Prepaid Insurance ₹ 1,000.

Dr. Abhinav Bharat started practice of Medical Practitioner on 1st April 2019, He gives you the Receipts and Payments Account for the year ended 31st March 2020 and the adjustments.
Prepare Income and Expenditure Account and Balance Sheet for the year ended 31st March
2020.

Dr.	Dr. Abhinav Bharat Receipts and Payments Account for the year ended 31st March 2020		Cr.
Receipts	Amount ₹	Payments	Amount ₹
To Cash introduced	25,000	By Furniture	8,000
To Visit fees	10,000	By Equipments	10,000
To Receipts from Dispensary	30,000	By Drugs	7,000
To Sundry Receipts	5,000	By Salaries	12,000
		By Rent	6,000
		By Conveyance	4,000
		By Stationery	500
		By Electrical Charges	5,000
		By Journals	500
		By Drawings	2,000
		By Balance c/d
	70,000		70,000

Additional Information :
1) Receipts in Arrears are Visit Fees ₹ 2,000 and Dispensary ₹ 500
2) Outstanding Expenses - Rent ₹ 500 and Salaries ₹ 1,000
3) Stock of drugs was ₹ 1,000
4) Depreciate Furniture @ 8 % p.a. and Equipments ₹ 500.
5) 40% of conveyance are for domestic purpose.

Prem, Verma, Sharma were partners sharing profits and losses in the ratio 2 : 1 : 1 Their Balance sheet as on 31st March 2019 is as follows.

Balance Sheet as on 31st March 2019
Liabilities	Amt ₹	Assets	Amt ₹
Creditors	20,000	Premises	2,40,000
Bank Loan	90,000	Debtors	2,00,000
Bill Payable	10,000	Furniture	60,000
General Reserve	64,000	Stock	1,00,000
Capital Account :		Cash	2,00,000
Prem	2,40,000
Verma	2,00,000
Sharma	1,76,000
	8,00,000		8,00,000

1. Prem died on 30th June 2019 and the following adjustments were made Prem’s share of profit is to be calculated on the average profit of the last two years.
2. Prem’s share in the Goodwill of the firm be given him. Goodwill will be valued at three times of the average profits of the last four years. The profits were.
2015-16 ₹ 1,60,000
2016-17 ₹ 1,20,000
2017-18 ₹ 80,000
2018-19 ₹ 40,000
3. Premises be valued at ₹ 2,80,000 and R.D.D. of ₹ 8,000 be created on debtors.
4. Drawing of Prem up to the date of his death were ₹ 15000 per month.
5. Interest on capital is allowed at 10% p.a. and to be charged on drawing at ₹ 4000
6. The amount due to Prem be transferred to his executors loan account.
Prepare : Prem’s Capital Account, Give working of Prem’s share in Goodwill, and Interest on capital.

Ajay, Sanjay and Vijay were partners sharing profits and losses in the proportion to their capital. Their Balance Sheet as on 31st March 2019 was as follows.

Balance Sheet as on 31st March 2019
Liabilities	Amt ₹	Assets		Amt ₹
Capital Account :		Land & Building		80,000
Ajay	60,000	Motor Lorry		40,000
Sanjay	40,000	Debtors	32,000
Vijay	20,000	Less: R. D. D.	4,000	28,000
Creditors	50,000	Furniture		36,000
Outstanding Salary	6,000	Bank		28,000
Reserve Fund	36,000
	2,12,000			2,12,000

Vijay died on 1 st August 2019 and the following adjustments were made.
1. Assets to be revalued as under Land & Building ₹ 88,000, Motor Lorry ₹ 36,000 and Furniture ₹ 34,000
2. All Debtors were good.
3. Goodwill of the firm valued at two times the average profit of the last 4 years profit.
4. Vijay’s share of profit to be calculated on the basis of average profit of last three years.
5. Profit for 4 years were 1st year ₹ 12,000, 2nd year ₹ 24,000, 3rd year ₹ 14,000, 4th year ₹ 22,000
Prepare : 1. Vijay’s Capital Account, showing amount payable to his executor.
2. Give working of Vijay’s share of Goodwill and profit upto the date of his death.

Outstanding Expenses and Prepaid Expenses of the current year and previous year Balance Sheet as on 31st March 2018

Dr.	Balance Sheet as on 31st March 2018				Cr.
Liabilities	Amount ₹	Amount ₹	Assets	Amount ₹	Amount ₹
			Prepaid Salaries (for 2018-19)		2,000

Dr.	Receipts & Payments Account for the year ended 31st March 2019				Cr.
Receipts	Amount ₹	Amount ₹	Payments	Amount ₹	Amount ₹
			By Salaries
			2018-19	30,000
			2019-20	1,000	31,000

Adjustment : Outstanding Salaries for the current year was ₹ 5,500, show the presentation of Salaries in the Final Accounts of a concern for the year 2018 - 19.

For considering adjustments relating to subscription only

Receipts and Payments Account
for the year ended 31st March 2018

Dr.					Cr.
Receipts	Amount ₹	Amount ₹	Payments	Amount ₹	Amount ₹
To Subscription
2016-17	1,500
2017-18	80,000
2018-19	3,500	85,000

Adjustments :
1) Subscription outstanding for current year was ₹ 7,000
2) Outstanding subscription for 2016 - 17 was ₹ 2,000 Subscription received in advance during
last year was ₹ 8,000.
With the help of above information show the effects in final account.

From the following Receipts and Payments Account of Bahurao Patil Polytechnic College, Nagpur for the year ending 31st March 2019 and additional information. Prepare Income and Expenditure Account for the year ended 31st March 2019 and a Balance Sheet as on that date.

Dr.	Receipts & Payments Account for the year ended 31st March 2019		Cr.
Receipts	Amount ₹	Payments	Amount ₹
To Balance b/d		By Salaries to teaching staff	15,00,000
Cash	12,000	Office Staff	8,55,000
Bank	2,00,000	By Printing & Stationery	27,000
To Interest	60,000	By Books	88,000
To Donations	7,00,000	By Furniture	78,000
To Tution fees	15,00,000	(Purchased on 1-1-2019)
To Admission fees	65,000	By Drama Expenses	90,000
To Term fees	4,00,000	By Postage	7,000
To Drama Receipts	1,00,000	By Telephone Charges	6,000
To Rent from use of hall	6,000	By Electricity	61,000
To Legacies (capital)	60,000	By Magazines and Newspaper	6,000
		By Balance c/d
		Cash	62,000
		Bank	3,23,000
	31,03,000		31,03,000

Additional Information :
1)

Particulars	1/4/2018(₹)	31/3/2019(₹)
Books	9,00,000	8,88,000
Furniture	3,26,000	3,00,000
Building Fund	8,27,000	?
Capital Fund	6,11,000	?

2) 60 % Donations are for Building Fund and balance is to be treated as revenue income.
3) Outstanding office staff Salaries ₹ 70,000.