Income and expenditure account

How do u solve this problem. Prepare income & expenditure account?
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asked Jan 12, 2016 in Financial Statements of Not-for-Profit Organizations. by Feba Rajeev (71 points) 793 views

1 Answer

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1.  Since there is no opening balance of sports material, it means whenever sports material is purchased, that is treated as an expense and debited to Income and Expenditure A/c.   That is why when old sports material is sold, it is treated as an income.

2. Receipts on account of Tournament Fund are Rs.15000 and expenses are Rs.16000, hence the excess expenditure on account of Tournament is debited to Income and Expenditure Ac.

3. Depreciation on Furniture: (20000 + 5000) X 10% = Rs.2500

4. Depreciation on Sports Equipment (14000+6000+8000) X 10% = Rs.2800.  Billiard Table has been assumed to be a part of Sports Equipment.

5. Annual Membership is capitalised because the club has to provide service till the death or expulsion of the members holding such membership.  It will be shown on Liability side of Balance Sheet.

6 Entrance or Admission Fee is paid by the member only once in his lifetime and this income is of non-recurring nature, hence should be capitalised.  AS 9 also recommends capitalisation of Entrance Fee.  It will be shown on Liability side of Balance Sheet.

7. It is a gift received as per the will of a deceased person.  This income is also of non-recurring nature, hence capitalised and will be shown on Liability side of Balance Sheet.

answered Jan 13, 2016 by jbsclasses (3,971 points)
How to treat outstanding expenses given in adjustment without date it is just written as
1.Insurance premium outstanding rs 40
2.subscription outstanding rs 400
So where these things will be posted in income and expenditure a/c and balance sheet also pls provide whether it is outstanding at beginning or end

When information  provided is without any dates, it usually means that those information pertain to the end of the year.