Question

From the given receipts and payments account and additional information of friends club for the year ended 31st march,2019.prepare income and expenditure a/c for the year ending 31st march,2019:

Answer 1

sale of old material will be shown in income side

Answer 2

Answer:

The income and expenditure account is prepared by the non-trading entities to define surplus or deficit of income over expenditures for a certain time frame.

Explanation:

Characteristics of Income and Expenditure Account

• Non-trading situations prepare this account.
• Its nature is equal to the Profit and Loss Account as created by the for-profit concerns.
• Though it is prepared at the end of the year, it does not represent that it establishes a record of a whole year.
• It defines the surplus or deficit of income over expenditures
• The concern prepares this account by strictly observing the Double Entry System.

WN1 Computation of Depreciation

Depreciation on opening balance of Furniture$=1,00,000 \times 10 / 100=10,000$

Depreciation on additional Furniture $=1,20,000 \times 10 / 100 \times 4 / 12=4,000$

Total Deprecation on furniture $=10,000+4,000=14,000$.

The prepare income and expenditure a/c for the year ending 31st march,2019 is as follows,

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