Account for the year was `48,000. Outstanding salary paid in the beginning of the year and the outstanding salary at the end of the year were `6,000 and `7,500 respectively. The amount of Salary to be shown in Receipts and Payments Account what will be?
Answers
Correct question:
Salary debited to the Income and Expenditure Account for the year was Rs 48,000. Outstanding salary paid in the beginning of the year and outstanding salary at the end of the year were Rs 6,000 and Rs7,500 respectively. The amount of salary to be shown in the Receipts and Payments Account will be?
Answer:
The calculation of outstanding amounts is as given below:
Salary to be shown in the Account = Salary for the year + Outstanding salary in the beginning - Outstanding salary at the end
As per the data given to us,
- Salary amount for the year = Rs 48,000
- Outstanding amount in the beginning = Rs 6,000
- Outstanding amount at the end = Rs Rs 7,500
Substituting the values in the formula,
Amount to be shown in the Account = Rs 48,000 + Rs 6,000 - Rs 7,500
Amount to be shown in the Account = Rs 46,500
Therefore, the salary to be shown in the receipts and payments account will be Rs 46,500.