Following is the receipts and payment account of a recreation club for the year ended 31st March 2009

RECEIPTS AND PAYMENTS ACCOUNTS

FOR THE YEAR ENDED 31^ST MARCH, 2009

Receipts	Amount (Rs.)	Payments	Amount (Rs.)
To cash in Hand To Subscriptions To Entrance Fees To Sale of refreshments To Sale of Dance Tickets To Interests on Investments @7%	8,320 26,000 3,900 9,880 5,850 4,550	By Rent of Hall By Salaries By Purchase of Sports Equipment By Dance Expenses By Supply of Refreshment By Honorarium By Sundry Expenses By Electricity changes By Cash at Bank	3,600 5,200 16,640 4,940 6,760 1,040 3,250 1,820 15,210
Total	58,500	Total	58,500

Following additional information are also provided to you:

(i)              Following were the assets and liabilities on 31^st March, 2008:

Sports equipment Rs.6,760, subscription in arrears Rs.1,950, Furniture Rs. 12,480

Liabilities –Accrued rent Rs.780 and subscription received in advance Rs.520.

(ii)            Following were the assets and liabilities on 31^st March 2009:

Sports equipments Rs. 19,760, Subscription in arrear Rs. 1, 690, Furniture Rs. 11,180,

Liabilities – Accrued rent Rs. 390, subscription received in advance Rs. 2, 340.

(iii)          Entrance Fees is to be capitalized.

You are required to prepare income and expenditure account for the year ended 31^st March, 2009 .

Solution: 1

INCOME AND EXPENDITURE ACCOUNT OF A RECREATION CLUB

(FOR THE YEAR ENDED 31^ST MARCH, 2009)

Dr                                                                                                                    Cr.

Expenditure	Amount (Rs)	Income	Amount (Rs)
To Rent of Hall                  3,640 Add: Accrued Rent (Current Year)                    +390                                             4,030 Less: Accrued Rent (Previous Year)                   780 To Salaries To Honorarium To Sundry Expenses To Electricity charges To Supply of Refreshment To Dance expenses To Depreciation                   Rs. Furniture                            1,300 Sports Equipment              3,640 To Excess of Income  Over Expenditure (Surplus) Transferred to Capital Fund	3,250 5,200 1, 040 3,250 1,820 6,760 4, 940 4,940 13,000	By Subscription                    Rs.     26, 000 Add: Subscription in Advance in Previous Year                    520 26,520 Add: Subscription in Arrear for Current Year                     1,690 28,260 Less: Last Year’s arrear                    1,950   26,260 Less: Subscription-received in Advance for next  Year                   –2,340 By Sale of Refreshment By Sale of Dance Tickets By Interest on Investments	23,920 9,880 5,850 4,550
Total	44,200		44,200

Note:

  Value of Investment in the beginning of the year has been calculated as follow:

Interest Investment ×100/Rate of investment

4,550 X 100     = Rs. 65,000

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