Question

From the following information given by Modern Dance Academy, calculate the amount of Subscription received during the year 2020- 21. 

(i) Subscription credited to Income & Expenditure A/c for the year ending 31st March ,2021 amounted to ₹3,00,000 and each member is required to pay an annual subscription of ₹ 3,000. 

(ii)Subscription in arrears as on 1st April 2020 amounted to ₹ 16,000. 

(iii) During the year 2020-21, 10 members made partial payment of ₹26,000 towards subscription, 8 members failed to pay the subscription amount and 5 members paid the subscription amount for the year2021-22. 

(iv) During the year 2019-20, 12 members paid the subscription amount for the year 2020-21.

OR 

Following information is given by Alchemy Medical College, Library department for the year 2020-21.

Particulars	Amount (₹)
Books and Journals Fund as on 1.4.2020	4,50,000
7% Books and Journals Fund Investments as on 1.4.2020	4,00,000
Interest on Books and Journals Fund Investments	13,000
Donations for Books and Journals	20,000
Books Purchased	70,000
General Fund as on 1.4.2020	10,00,000

Show the accounting treatment of the above-mentioned items in the Balance Sheet of the Alchemy Medical College as at 31st March,2021.

Answer 1

Calculation of amount of Subscription received during the year 2020-21

Particulars		Amount(₹)
Subscription credited to Income & Expenditure A/c		3,00,000
Add : Outstanding for 2019-20		16,000
Less : Outstanding for 2020-21
For 10 members (10 x 3000 – 26,000)	4,000
For 8 members (8 x3000)	24,000	(28,000)
Less : Advance during 2019-20		(36,000)
Add : Advance during 2020-21		15,000
Amount of subscription Received During the Year		2,67,000

OR

An Extract of Balance Sheet as of 31st March, 2021

Liabilities			₹	Assets	₹
General Fund		10,00,000		7% Books & Journals Fund investment	4,00,000 (1/2)
Add: Books and Journals Fund		70,000	10,70,000 (1/2)	Accrued Interest on Books and Journals Fund Investment	15,000 (1/2)
Books & Journals Fund		4,50,000		Books	70,000 (1/2)
Add: Donations for Books & Journals		20,000
Interest in Books & Journals
Investment	13,000
Accrued Interest	15,000	28,000
Less: Books purchased		70,000	4,28,000 (1)

Working Note:

1. Interest on Books and Journals Investments

= 4,00,000 x \(\frac 7{100}\)

= 28,000

2. Accrued Interest

= 28,000 – 13,000

= 15,000

Answer 2

Calculation of amount of Subscription received during the year 2020-21

OR

Working Note:

Interest on Books and Journals Investments = 4,00,000 x 7/100 = 28,000 

Accrued Interest = 28,000 – 13,000= 15,000