NOTES

Distinguish Between Receipt and Payment and Income and Expenditure Account.

Notes of Financial Statements of Not-for-Profit Organizations (Old & New)

1. Distinguish Between Receipt and Payment and Income and Expenditure Account.

   
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2. The following is the Receipts and Payments Account of Lion Club for the year ended 31st March, 2016.

   Receipts	Rs.	Payments	Rs.
   Opening balance:		Salaries	1,20,000
   Cash	10,000	Creditors	15,20,000
   Bank	3,850	Printing and stationary	70,000
   Subscription received	2,02,750	Postage	40,000
   Entrance donation	1,00,000	Telephones and telex	52,000
   Interest received	58,000	Repairs and maintenance	48,000
   Sale of assets	8,000	Glass and table linen	12,000
   Miscellaneous income	9,000	Crockery and cutlery	14,000
   Receipts at Coffee room	10,70,000	Garden upkeep	8,000
   Soft drinks	5,10,000	Membership fees	4,000
   Swimming pool	80,000	Insurance	5,000
   Tennis court	1,02,000	Electricity	28,000
   		Closing balance:
   		Cash	8,000
   		Bank	2,24,000
   	21,53,600		21,53,600

    

   The assets and liabilities as on 1.4.2015 were as follows:

   	Rs.
   Fixed assets (net)	5,00,000
   Stock	3,80,000
   Investment in 12% Government securities	5,00,000
   Outstanding subscription	12,000
   Prepaid insurance	1,000
   Sundry creditors	1,12,000
   Subscription received in advance	15,000
   Entrance donation received pending membership	1,00,000
   Gratuity fund	1,50,000

    The following adjustments are to be made while drawing up the accounts:

   (i) Subscription received in advance as on 31st March, 2016 was Rs.18,000.

   (ii) Outstanding subscription as on 31st March, 2016 was Rs.7,000.

   (iii) Outstanding expenses are salaries Rs.8,000 and electricity Rs.15,000.

   (iv) 50% of the entrance donation was to be capitalized. There was no pending membership as on 31^st March, 2016.

   (v) The cost of assets sold net as on 1.4.2015 was Rs.10,000.

   (vi) Depreciation is to be provided at the rate of 10% on assets.

   (vii) A sum of Rs.20,000 received in October 2015 as entrance donation from an applicant was to be refunded as he has not fulfilled the requisite membership qualifications. The refund was made on 3.6.2016.

   (viii) Purchases made during the year amounted Rs.15,00,000.

   (ix) The value of closing stock was Rs.2,10,000.

   (x) The club as a matter of policy, charges off to income and expenditure account all purchases made on account of crockery, cutlery, glass and linen in the year of purchase.

   You are required to prepare an Income and Expenditure Account for the year ended 31st March, 2016 and the Balance Sheet as on 31st March, 2016 along with necessary workings.

   
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3. During the year ended 31st March, 2016, Sachin Cricket Club received subscriptions as follows:

   	Rs.
   For year ending 31st March, 2015	12,000
   For year ending 31st March, 2016	6,15,000
   For year ending 31st March, 2017	18,000
   Total	6,45,000

    There are 500 members and annual subscription is Rs.1,500 per member.

   On 31st March, 2016, a sum of Rs.15,000 was still in arrears for subscriptions for the year ended 31^st  March, 2015.

   Ascertain the amount of subscriptions that will appear on the credit side of Income and Expenditure Account for the year ended 31st March, 2016. Also show how the items would appear in the Balance Sheet as on 31st March, 2015 and the Balance Sheet as on 31st March, 2017.

   
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4. Summary of receipts and payments of Bombay Medical Aid society for the year ended 31.12.2016 are as follows:

   Opening cash balance in hand Rs.8,000, subscription Rs.50,000, donation Rs.15,000 (raised for meeting revenue expenditure), interest on investments @ 9% p.a. Rs.9000, payments for medicine supply Rs.30,000 Honorarium to doctor Rs.10,000, salaries Rs.28,000, sundry expenses Rs.1,000, equipment purchase Rs.15,000, charity show expenses Rs.1,500, charity show collections Rs.12,500.

   Additional information:

   	1.1.2016	31.12.2016
   Subscription due	1,500	2,200
   Subscription received in advance	1,200	700
   Stock of medicine	10,000	15,000
   Amount due for medicine supply	9,000	13,000
   Value of equipment	21,000	30,000
   Value of building	50,000	48,000

    You are required to prepare receipts and payments account and income and expenditure account for the year ended 31.12.2016 and balance sheet as on 31.12.2016.

   
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5. From the following Receipts & Payments Account of Cricket Club started pm 01^st April, 2014 and other additional information supplied to you, prepare an Income & Expenditure A/c for the year ended 31^st Mar, 13. 

   Receipts & Payments A/c for the year ended 31^st March 

   Receipts	Amt.	Payments	Amt.
   To Subscription	1,100	By Salaries	1,000
   To Bar Receipts	600	By Printing & Stationery	100
   To Interest on Securities	150	By Telephone	150
   To Cricket fees	250	By Gardening	120
   To Tennis fees	300	By Cricket	200
   To Billiard fees	250	By Insurance	100
   To Life Members fees	2,000	By Tennis	300
   To Donations	24,800	By Billiards	400
   To Entrance fees	3,000	By Bar expenses	1,200
   To Tournament Fund	1,000	By Investments	5,000
   		By Land & Buildings	20,000
   		By Tournament expenses	1,000
   		By Furniture	1,200
   		By Sports Material	1,000
   		By Current A/c Balance	1,000
   		By Cash in hand	680
   	33,450		33,450

    

   Additional Information:

   1.      Subscriptions outstanding for the year Rs. 550.

   2.      Subscriptions of Rs. 100 were received in advance.

   3.      Half of the entrance fees received was to be capitalized.

   4.      Donations and Life Member’s fees were to be capitalized.

   5.      Interest due but not received Rs. 100.

   6.      Depreciate furniture by 5% and land & building by 2 ½ %

   From the above information, prepare an Income & Expenditure A/c for the year ended 31^st Mar, 2013.
   

   
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