Question

From the following Receipts and Payments Account of Mumbai Theatre Club, prepare Income and Expenditure Account for the year ended 31st March, 2018 and Balance Sheet as at that date.
Additional information:
(i) Subscriptions in arrear for the year ended 31st March, 2018 – ₹ 9,000 and subscriptions in advance for the year ended 31st March, 2019 – ₹ 3,500.
(ii) Insurance Premium outstanding ₹ 400.
(iii) Miscellaneous expenses prepaid ₹ 900.
(iv) 8% interest has accured oninvestment for five months.
(v) Billiard Table costing ₹ 3,00,000 was purchased during last year and ₹ 2,20,000 were paid for it.

Answer 1

Calculation of Accrued interest:

Accrued interest= Investment amount x rate of interest x period

                           = 60000 x 8% x 5/12

                           = 2000

Answer 2

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