From the following information relating to Mukta Social Club, you are required to prepare: (a) An Income and Expenditure Account (including profit…

CA Foundation · Accounting · MTP · June 2024
From the following information relating to Mukta Social Club, you are required to prepare: (a) An Income and Expenditure Account (including profit or loss on bar) for the year ended 31st March, 2011; and (b) A Balance Sheet at that date. (i) A summary of cash book for the year 2010-2011 is as follows: ₹ ₹ Bank balance 8,360 Bar supplies 1,34,610 Annual subscriptions 36,680 Bar wages 10,990 Bar takings 1,53,920 Salaries and wages 13,650 Hire of rooms 1,460 Office expenses 4,240 Income from investments 3,150 Lighting and heating 3,720 Sale of investments 3,280 Rates and insurance 2,870 Miscellaneous expenses 3,030 Investments 14,000 Furniture (purchased on 01.10.2010) 9,000 Bank balance 10,740 2,06,850 2,06,850 (ii) The balance at bank on 1st April, 2010 represented - 3,360 on current account and - 5,000 on deposit account. All the receipts shown in the above summary were paid into the Current Account except for 510deposit account interest (included in income from investment) and all payments were made from the Current Account. During 2010-2011,3,000 were transferred from the Current Account to the Deposit Account. (iii) The following items were outstanding on 31st March: 31.03.2010 31.03.2011 ₹ ₹ Subscriptions in arrears 790 980 Salaries and wages accrued 330 410 Creditors for bar supplies 12,170 13,250 Stock of stationery (included in office expenses) 560 650 Subscription in advance 140 260 Telephone bill outstanding (included in expenses) 290 370 Electricity charges unpaid 310 440 Debtors for bar sales 120 490 Outstanding repairs account (included miscellaneous expenses) 90 530 Bar wages accrued 210 230 Stock of coal 400 570 Rates and insurance prepaid 620 730 Stock of bar supplies 14,220 19,890 (iv) At March, 31,2010, the club owned the following assets which are shown at cost. On March, 31,2010, they had been in the ownership of the club for the number of years indicated: ₹ ₹ Freehold premises 60,000 12 years Furniture 10,000 12 years Furniture 8,000 5 years Investments 30,000 4 years (v) The club is providing for the depreciation on freehold premise at 2.5% per annum and on furniture at 10% per annum both rates being calculated on original cost.

Suggested Answer and Working Notes:

Bar Trading Account For the year ending on 31st March, 2011 Particulars Rs. Particulars Rs. To Bar Stock (Opening) 14,220 By Bar Sales 1,54,290 To Bar Purchases 1,35,690 By Bar Stock (closing) 19,890 To Wages 10,990 Less: O/s for09-10 (210) 10,780 Add: O/s for10.11 230 11,010 To Profit t/f to income and expenditure A/c 13,260 1,74,180 1,74,180 Income and Expenditure Account For the year ending on 31st March, 2011 Expenditure (₹) (₹) Income (₹) To salaries and wages 13,650 By Subscriptions 36,680 Less: O/s of09-10 (330) Less: O/s of09-10 (790) Add: O/s of10-11 410 13,730 Add: O/s of10-11 980 To Lighting & Heating 3,720 Add: Adv. of09-10 140 Less: O/s of09-10 (310) Less: Adv. of10-11 (260) Add: O/s of10-11 440 3,850 36,750 Add: Opening stock (coal) 400 By Room Hire 1,460 Less: Closing Stock (Coal) (570) 3,680 By Income from investments 3,150 To Rates & Insurance 2,870 By Bar Trading A/c [Profit from Bar Room] 13,260 Add: Prepaid of09-10 620 Less: Prepaid of10-11 (730) 2,760 To Miscellaneous Exp. 3,030 Less: O/s of09-10 (90) 2,940 Add: O/s of10-11 530 3,470 To Depreciation : Furniture ₹(₹ 800 +450) 1,250 Premises 1,500 To Office Expenses 4,250 Add: Opening Stock (Stationery) 560 Less: Closing Stock (Stationery) 650 4,150 Less: O/s of09 -10 (Telephone Bills) (290) Add: O/s of10 -11 (Telephone bills) 370 4,230 To Excess of income over expenditure 24,000 54,620 54,620 Balance Sheet as at 31st March, 2011 Liabilities (₹) (₹) Assets (₹) (₹) Salaries and wages due 410 Bank Balance : Creditors for bar supplies 13,250 Current A/c 2,230 Advance subscription 260 Deposit A/c (₹ 3,000+5,000+510) 8,510 10,740 Telephone bill outstanding 370 Investments 30,000 Electricity bill outstanding 440 Add: New purchases 14,000 44,000 Repairs A/c outstanding 530 Less: Sale (3, 280) 40,720 Bar wages due 230 Furniture : Capital fund : 13 years old Nil Opening balance 87,530 6 years old 8,000 Add: Surplus 24,000 1,11,530 Less: Depreciation (4, 800) 3,200 New Furniture 9,000 Less: Depreciation (450) 8,550 Outstanding 980 Stock of stationery 650 Stock of coal 570 Rates & insurance prepaid 730 Debtors for bar sales 490 Stock of bar supplies 19,890 Freehold premises 60,000 Less: Acc. dep. (19, 500) 40,500 1,27,020 1,27,020 Working Notes: (i) Creditors for Bar Purchases Account Particulars ₹ Particulars ₹ To Cash A/c 1,34,610 By Balance b/d 12,170 To Balance c/d 13,250 By Bar trading A/c (Purchases) (bal. fig.) 1,35,690 1,47,860 1,47,860 (ii) Debtors for bar taking Account Particulars ₹ Particulars ₹ To Balance b/d 120 By Cash A/c (collections from debtors) 1,53,920 To Bar Trading A/c (Sales) 1,54,290 By Balance c/d 490 1,54,410 1,54,410 (iii) Balance Sheet as at 31st March, 2010 Liabilities (₹) Assets (₹) (₹) Salaries and wages due 330 Bank Balance : Creditors for bar supplies 12,170 Current A/c 3,360 Subscription in advance 140 Deposit A/c 5,000 Outstanding: Investment 30,000 Telephone Bill 290 Stock of bar supplies 14,220 Electricity Bill 310 Furniture Repairs A/c 90 12 year old 10,000 Bar Wages 210 Less: Depreciation (10, 000) Nil Capital Fund (Bal. Fig.) 87,530 5 years old 8,000 Less: Depreciation (4, 000) 4,000 Subscriptions due 790 Stock of stationery 560 Stock of coal 400 Rates & insurance prepaid 620 Debtors for bar sales 120 Freehold Premises 60,000 Less: Acc. dep. (18, 000) 42,000 1,01,070 1,01,070

Topics: Issue, Forfeiture and Re-issue of Shares

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