1. Following is the Receipt and Payment A/c. of a club for the year ended 31-03-2014.

Receipt ₹ Payment ₹

To Balance b/d 75,000 By Salaries 22,000

To Subscription By office expenses 8,000

2012-13 35,000 By Sports equipment

2013-14 9,50,000 (Purchased on 1-10-2013) 6,00,000

2014-15 55,000 10,40,000 By Telephone charges 12,000

To Donation 90,000 By Electricity charges 18,000

To Entrance Fees 60,000 By Travelling Expenses 6,000

To Locker rent 20,000 By 10% Fixed Deposit

To Donation for Building 1,50,000 (made on 1-07-2013) 7,00,000

By balance c/d. 69,000

14,35,000 14,35,000

Additional information:

a) Outstanding subscription for 2013-14 ₹80,000. Outstanding salaries as on 1-04-2013 were ₹2,000 and as on 31-03-2014 were ₹4,000.

b) One third of Entrance fee to be treated as General income.

c) Locker rent rate is ₹2,000 per month.

d) Depreciation on sports equipment 10% p.a.

Prepare Income and Expenditure A/c. for the year ending 31-03-2014.

Note: The data in this question are merged together. They are therefore sorted before answering this question. See the attached pdf file for the sorted question.

The question is now answered as follows:

Question: Prepare Income and Expenditure A/c. for the year ending 31-03-2014.

Answer and explanation:

Note: See the attached excel file for the Income and Expenditure A/c. for the year ending 31-03-2014.

Both receipts and payments account and income and expenditure account are prepared by not-for-profit organizations such as charity organizations, human right campaign, clubs, etc.

Receipts and payments account is an account gives a summary of all the cash transitions, cash received and paid, that the organization engaged in during a particular period. It is similar to the cash book prepared by profit making organizations. The receipts and payments account is prepared in or to determine the balance of cash in hand or at bank or bank overdraft at the end of the period.

Income and expenditure account is an account gives a summary of all incomes and expenses of an organization during a particular period. It is similar to the trading and profit and loss account prepared by profit making organizations. The income and expenditure account is prepared in order to determine whether there is a surplus or a deficit balance during the period.