OMTEX CLASSES: Dr. Subhash Raje started practice as a medical practitioner on 1st April, 2007. He gives you the Receipts & Payments Accounts for the year 2007 – 08 and the adjustments to be made. Prepare his Income and Expenditure Account and Balance sheet for 2007 -08.

Receipts and payments account for the year ended 31^st March, 2008.

Adjustments:

1. Receipts in arrears are: Visits Rs. 11,500 and Dispensary Rs. 9,000.

2. The outstanding salaries are Rs. 1,800 and the outstanding expenses on drugs are also Rs. 3,000.

3. 40% of the amount spent on conveyance was for domestic use.

4. Stock of drugs in hand at the close of the year was worth Rs. 4,200.

5. Depreciate furniture at 5% p.a. and equipment at 10% p.a. Furniture and equipment purchased on 1^st April 2007.

Solution: In the books of Dr. Subhash Raje

Income and Expenditure A/c for the year ended 31.03.08

Expenditure	Amount	Amount	Income	Amount	Amount
To Drugs	30800		By Visits	84000
(+) Outstanding	3000	33800	(+) Outstanding	11500	95500
To Salary	24000		By Receipts from Dispensary	64000
(+) Outstanding	1800	25800	(+) Outstanding	9000	73000
To Rent		6000	By Sundry Receipts		12000
To Conveyances	18000
(-) Drawings	-7200	10800
To Stationery		5600
To Lighting		10000
To Journals		1200
To Depreciation
Furniture	2500
Equipment	4000	6500
To Surplus [Income over Expenditure]		80800
		180500			180500

Balance Sheet as on 31.03.08

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