From the following Reciepts and Payments Accounts of Cricket Club and the
additional information given, prepare the Income and Expenditure Account for the
Year ending 31-12-2018 and Balance sheet as on that date:
RECEIPTS AND PAYMENTS ACCOUNT
for the year ending 31-12-2018
answer for To bal. b/d Rs. Rs. -Cash 3520 By Maintenance 6820 -Bank 27380 By Crockery Purchased 2650 -Fixed Deposit @ 6% 30000 By Match Expenses 13240 To Subscription (including Rs. 6000 for 2017) 40000 By Salaries 11000 TO Entrance fees 2750 By Conveyance 820 To Donation 5010 By Upkeep of Lawns 4240 To Interest on Fixed Deposits 900 By postage stamps 1050 To Tournament Fund 20000 By Purchase Of cricket goods 9720 To Sale of Crockery(book value Rs. 1200) 2000 By Sundry expenses 2000 By Investments 5700 By Tournament Expenses 18800 By balance c/d: -Cash 2200 -Bank 23320 Fixed Deposits 30000 131560 131560 Additional Information: i. Salary outstanding is Rs. 1000. ii. Opening Balance of Stock of Postage and Sationery and Cricket gods is Rs. 750 and Rs. 3210 respectively. Closing stock of the same is Rs. 900 and Rs. 2800 respectively. iii. Outstanding subscription for 2017 and 2018 is Rs. 6600 and Rs. 8000 respectively.
Answers
Answer:
Here we detail about the four steps involved in preparation of receipts and payments account.
Steps in the Preparation of Receipts and Payments Account:
Step 1:
Take opening balance of cash in hand and cash at bank from the Cash Book and enter on the debit side of Receipts and Payments Accounts as its first item. Credit Balance, if any, of bank balance (i.e., Bank Overdraft) shall be shown on the credit side of Receipts and Payments Account as its first item.
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Step 2:
Take item wise aggregate of various receipts and enter on the debit side irrespective of their nature (i.e., capital or revenue) and ignoring the period (past, current or future) to which these receipts pertain.
Step 3:
Take item wise aggregate of various payments and enter on the credit side irrespective of their nature (i.e., capital or revenue) and ignoring the period (past, current or future) to which these payments pertain.
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Step 4:
Compute the difference between the total of debit side and total of credit side of the Receipts and Payments Account and put the difference on the side which is short.
Let us take an example through which we will explain how Receipts and Payments Account can be prepared from the given cash book.
Example:
Cash Book
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Step 1:
Put opening balance of bank and cash on the debit side of the Receipts and Payments Account as its first item.
Step 2:
Now we shall move to take item wise aggregate of various receipts.
Item wise aggregate of various receipts
Interest on Government Bonds
Step 3:
Take aggregate of various payments and put them on the payments side of Receipts and Payments Account.
Receipts and Payments Account
Receipts and Payments Account
Step 4:
Compute the difference between debit side and credit side of the Receipts and Payments Account and put the same on the side which is short. Receipts and Payments AccountPreparation of Receipts and Payments AccountPreparation of Receipts and Payments Account
