OMTEX CLASSES: Dr. Shah 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:

Receipts in arrears are: Visits Rs. 1,500 and Dispensary Rs. 19,000.

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

50% of the amount spent on conveyance was for domestic use.

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

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

Solution: In the books of Dr. Shah

Income and Expenditure A/c for the year ended 31.03.08

Expenditure	Amount	Amount	Income	Amount	Amount
To Drugs	14800		By Visits	100000
(+) Outstanding	3000	17800	(+) Outstanding	1500	101500
To Salary	4000		By Receipts from Dispensary	54500
(+) Outstanding	1800	5800	(+) Outstanding	19000	73500
To Rent		6000	By Sundry Receipts		13000
To Conveyances	8000
(-) Drawings	-4000	4000
To Stationery		5600
To Lighting		10000
To Journals		1200
To Depreciation
Furniture	7500
Equipment	2000	9500
To Surplus [Income over Expenditure]		128100
		188200			188200

Balance Sheet as on 31.03.08

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