The Income and Expenditure Account of sweet Club for the year 2021 is as

follows.

Expenditures Rs. Income Rs.

To, Salaries 120,000 By, Subscriptions 170,000

To, Printing and Stationery 6,000 By, Entrance Fees 4,000

To, Postage 500 By, Contribution for dinner 36,000

To, Telephone 1,500

To, General Expenses 12,000

To, Interest and Bank Charges 5,500

To, Audit fees 2,500

To, Annual Dinner Exp. 25,000

To, Depreciation 7,000

To, Surplus 30,000

210,000 210,000

The account has been prepared after the following adjustments:

31.12.2020 31.12.2021

Subscription outstanding 16,000 18,000

Subscription received in advance 13,000 8,400

Salaries outstanding 6,000 8,000

Sport Equipment 52,000

The club owned a building since 2019 190,000 no depn.

At the end of the year after depreciation of Rs. 7,000 sports equipments
amounted to 63,000

In 2019 the club had raised a bank loan which is still unpaid 30,000

Cash in hand on 31.12.2021 Rs. 28,500

Audit fees for 2020 paid during 2021 Rs. 2,000 and Audit fees for 2021 not paid
Rs. 2,500

Prepare the Receipts and Payments Account of the Club for 2021 and Statement
of Financial

Position as on 31.12.2021. All workings should be part of your answers.

Solution

sweet Club

Receipts and Loss Accounts

Receipts Rs. Payments Rs.

To, Balance b/d (balancing figure) 13,600 By, Salaries (Note 3) 118,000

To, Subscriptions (Note 2) 163,400 By, Printing & Stationery 6,000

To, Entrance Fees 4,000 By, Postage 500

To, Contribution for dinner 36,000 By, Telephone 1,500

By, General Expenses 12,000

By, Audit Fees 2,000

By, Annual Dinner expenses 25,000

By, Interest and Bank charges 5,500

By, Sports Equipment (Note 4) 18,000

By, Balance c/d 28,500

 217,000 217,000

Statement of Financial Position of sweet Club as on 31.12.2021

Working Notes:

1. Opening Statement of Financial Position

Liabilities Rs. Assets rs

Bank Loan 30,000 Building 1,90,000

Creditor for Expenses: Sports Equipment 52,000

Salaries 6,000 Cash in Hand 13,600

Audit Fees 2,000 Subscription due 16,000

Subscription received in advance 13,000

Capital Fund (Balancing figure) 220,600

271,600 271,600

2. Subscription:

As per Income and Expenditure A/c 170,000

Add: Subscription outstanding 2021 16,000

 186,000

Add: Subscription received in advance for 2020 8,400

194,400

Less: Subscription received in advance on 2021 13,000

181,400

Less: Subscription outstanding for 2020 18,000

163,400

3. Salaries

As per Income and Expenditure A/c 120,000

Add: Outstanding of 2021 6,000

126,000

Less: Outstanding of 2020 8,000

118,000

4. Sports Equipment

Closing balance 63,000

Add: Depreciation for the year 7,000

70,000

Less: Opening balance 52,000

Purchases during the year 18,000