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Not for profit Organization

Extract of a Receipt and Payment Account for the year ended on March 31, 2015: Payments: Stationery Rs. 23,000 Additional Information:

Details April 1, 2014 March 31, 2015

Stock of stationery 4,000 3,000

Creditors for stationery 9,000 2,500

Details

Amount (Rs.)

Payment made for the purchase of stationery as per Receipts and Payments account

Less: Creditors in the beginning

Payment made for the year 2014-15

Add: Payment not yet made (i.e. creditors at the end)

Stationery Purchased for the year 2014-15

Add: Stock in the beginning

Stationery Available for consumption during 2014-15

Less: Stock at the end

23,000

9,000

14,000

2,500

16,500

4,000

20,500

3,000

Stationery Consumed during 2014-15 to be taken to the Expenditure side of the Income and Expenditure account

17,500

Stock of stationery

Particular

Amount

Particular

Amount

To bal b/d

To purchases

4000

16,500

By Income & expenditure account

By bal c/d

17,500

3000

20,500

Creditors of stationary

Particular

Amount

Particular

Amount

To bank

To bal c/d

23,000

2,500

By bal b/d

By stock of stationery

9,000

16,500

25,500

From the following information, calculate the amount that will be shown in the stationery account in income & expenditure account

Particular 1^st April,2019 31^st March,2020

Creditors for stationery 4,600 11,800

Stock of Stationery 15,000 30,400

During the year ended 31^st March 2020, payment made to creditors amounted to Rs. 56,800. Stationery purchased in cash during the year was 20% of the total purchases of the stationery.

Solution- Calculation of credit purchases of stationery

Creditor for Stationery Account

Particular

Amount

Particular

Amount

To bank a/c

To bal c/d

56,800

11,800

By bal b/d

By stock of stationery

4,600

64,000

68,600

Calculation of cash purchases of stationery

Let total purchases be X

Cash purchases are 20% of X

64000+ 20/100 x X = X

64000+ X/5 = X

X-X/5 = 64000

X = Rs. 80,000

Cash purchases = Total Purchases – credit purchases

= 80,000 -64000 = Rs. 16000

Cost of Stationery consumed = opening stock + purchase ( cash and credit purchases) – closing stock

=15000+ 64,000+16,000 – 30,400

= Rs. 64,600

Furniture Account

Particular

Amount

Particular

Amount

To bal b/d

To bank (Purchases)

To profit on sale

By depreciation

By loss on sale

By bank ( sale)

By bal c/d

The book value of furniture on 1st April, 2018 is 60,000. Half of this furniture is sold for 20,000 on 30th September, 2018. Depreciation is to be charged on furniture @ 10% p.a.

Calculate loss on sale of furniture. Show how the loss on sale and depreciation on furniture will be shown in the Income and Expenditure Account for the year ended 31st March, 2019.

Accounting item	Statements	Treatment
Entrance Fee/ Admission Fee	Entrance fees in receipts & payments account	Otherwise shown as an income in income & expenditure account To be capitalized as a liability if amount is huge and specified in closing balance sheet
Life membership fee	Given in receipt & payment account	To be capitalized as a liability in closing balance sheet
Special Receipts	Given in receipt & payment account	To be capitalized as a liability in closing balance sheet
Donations	If general donations- If specific donations	Income & expenditure account Shown in closing balance sheet in the balance sheet
Depreciation	10%, 15% etc Depreciation on assets	Income & expenditure account – expenses Closing balance sheet –Assets less depreciation
Legacies	Given in adjustments or receipts & payment account	Closing Balance sheet- if specified If not specified – income in income & expenditure account
Sale of used Materials	Given on receipts side	Income & expenditure account – income
sale/ purchase of fixed assets like furniture building sports equipment books investment	Given on receipts side of receipt & payment account	Profit on sale as an income and loss/ depreciation as an expenditure Purchase in asset added and book value of asset sold deducted from relevant asset
Sale of Old Newspapers	Given in Receipts & payment account	As in income in income & expenditure account
Honorarium	Given in receipts & payment account	As an expense in income & expenditure account
Subscriptions	In adjustments – If subscription account is given	Closing prepaid insurance – liability along with subscription account dr side Closing outstanding – asset – subscription account – Cr side
endowment fund	Given in Receipts & payment account	As a liabilities in closing balance sheet
upkeep of lawn, maintenance of ground, nor mal repair charges, municipal taxes, expenses on show, news paper, magazines, rent, insurance	Given in Receipts & payment account	As an expense in income & expenditure account
treatment of specific funds like sports fund, prize fund, tournament fund etc.	Given in receipt & payment account	As a liability in closing balance sheet Any expenses or incomes related to the funds are deducted or included in it If fund is less than the expenditure related to it than difference will be as an expenses
Specific fund investment like sports fund investment, prize fund investment, tournament fund investment	Given in receipt & payment account as payment	As an asset in closing as a well as opening balance sheet as per the question
Interest on specific fund investment	Interest received will be treated as capital receipt and added in the relevant fund in the balance sheet	Added in relevant fund in the balance sheet liability side
Outstanding interest on specific fund investment	Given in adjustments	Added in the fund in the liability Also shown on the asset side of the balance sheet
General fund, general fund investment, interest on general fund investment	Given in adjustments	General fund will be treated as capital receipt – balance sheet general fund investment as capital expenditure - asset side balance sheet and interest as a revenue receipt – income & expenditure account