Question

Given below is the Receipts and Payments account of Riders Club for the year ending 31st December, 2012, which was formed on January, 2012.Receipts and Payments Accounts for the year ending 31-12-2012.

Receipts	RS.	Payments	Rs.
Subscription	5200	Salaries	3500
Donation	1600	Scholarship	1480
Life	2000	General expenses	1960
membership fees	5000	Printing and stationery	2500
legacy interest	160	Furniture	2400
		Investments, balance c/d	1780
	13960		13960

Prepare the income and expenditure account of the club for the year ended 31 st December, 2012 and its Balance Sheet as on that date, after taking into account the following information. 

a) Subcriptions outstanding as on 31-12-2012, Rs, 300.

b) Salaries outstanding, Rs. 330. 

c) 5% interest has been accrued on investments kw 6 months. 

d) Legacy and life membership fees are to be capitalized. 

e) Charge depreciation on furniture 10% p.a.

Answer 1

Income and Expenditure Account for the year ended 31-12-2012

Expenditure	Amt.	Income	Amt.
To Salaries 3,500 Add: Outstanding  330	3830	By Subscribe - option 5,200 Add: Outstanding 300	5500
To Scholarship	1480	By Donation	1600
To General Exp.	1960	By Interest 160 Add: Interest 60 (2400×5/100×6/12)	220
To Printing & Stationery	340	Excess of Expenditure over Income (Deficit)	540
To Depreciation on Furniture	250
	7,860		7,860

Balance Sheet as on 31/12/2012

Liabilities	Amt.	Assets	Amt.
Capital fund : Legacy 5,000 Life membership 2.000	7,000	Furniture 2,500 Less : Deere. 250	2250
Less : Deficit 540	6460	Subscription outstanding on 31/12/2012 300	2,400
Salary outstanding	330	Investments Interest	60
		accrued Cash	1780
	6790		6790