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From the following receipts and payments account and additional information given below prepare income and expenditure account and balance sheet of rural literacy society as on 31st March 2019?

Receipts and Payments Account for the year ended 31st March 2019

Receipts Amt Payments Amt
To Balance b/d By General Expenses 32,000
Cash in Hand 40,000 By Newspapers 18,500
Cash at Bank 155,500 By Electricity 30,000
To Subscription By Fixed Deposits with Bank 180,000
      2017-18                         12,000      (On 30 September, 2018 @10% p.a.)
      2018-19                       2,65,000 By Books 70,000
      2019-20                            5,000 282,000 By Salary 36,000
To Legacy 12,500 By Rent 65,000
To Government Grant 120,000 By Postage Charges 3,000
To Sale of Old Newspaper 37,000 By Furniture (Purchased) 105,000
         (Book Value Rs.50,000) By Balance c/d
To Interest Received on Fixed Deposit 4,500 Cash in Hand 30,000
Cash at Bank 82,000
651,500 651,500
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    1. B.com and Pursuing ACCA
      This answer was edited.

      In the books of Rural Literacy Society

      Income & Expenditure A/c for the year ended 31 March 2019

      Expenditure Amt Amt Income Amt Amt
      To General Expenses 32,000 By Subscription (W.N.1) 2,72,000
      To Newspapers 18,500 By Legacy 12,500
      To Electricity 30,000 By Government Grant 1,20,000
      To Rent 65,000 By Interest Received on Fixed Deposit 9,000
      Less: Prepaid Rent (65,000/13) -5,000 60,000     (1,80,000*10%*6/12)
      To Salary 36,000
      Add: Outstanding Salary 6,000 42,000
      To Postage Charges 3,000
      To Loss on Sale of Furniture (W.N.2) 13,000
      To Surplus (excess of income over expenditure) 2,15,000
      4,13,500 4,13,500

       

      Balance Sheet as on 31 March 2019

      Liabilities Amt Amt Assets Amt Amt
      Capital Fund (W.N.3) 3,85,500 Fixed Deposit 1,80,000
      Add: Surplus 2,15,000
      Advance Subscription 5,000 Books 50,000
      Outstanding Salaries 6,000 Add: Purchased 70,000 1,20,000
      Furniture 1,20,000
      Add: Purchased 1,05,000
      Less: Sold -50,000 1,75,000
      Outstanding Subscription 15,000
      Prepaid Rent 5,000
      Cash in Hand 30,000
      Cash at Bank 82,000
      Accrued Interest (W.N.4) 4,500
      6,11,500 6,11,500

       

      Working Notes:

      W.N.1: Calculation of Subscription

      Subscription for 2018-19 2,65,000
      Add: Outstanding Subscription (31 March 2019) 15,000
      Less: Outstanding Subscription (2017-18) -8,000
                       Total Subscription 2,72,000

      In the above calculation, for the year 2017-18 subscription amount was 12,000, and in the adjustment at the end of the year subscription was 20,000 so the difference of 8,000 is the amount of subscription that was outstanding.

       

      W.N.2: Calculation of loss on sale of furniture

      Book Value of Furniture 50,000
      Less: Sold -37,000
                      Loss on Sale of Furniture 13,000

       

      W.N.3: Calculation of Capital Fund

      Balance Sheet as on 31 March 2018

      Liabilities  Amt  Assets Amt
      Capital Fund (Balancing Figure) 3,85,500 Books 50,000
      Furniture 1,20,000
      Outstanding Subscription 20,000
      Cash in Hand 40,000
      Cash at Bank 1,55,500
      3,85,500 3,85,500

       

      W.N.4: Calculation of Accrued Interest

      Interest as of 30 September 2018 9,000
      Less: Interest as of 31 March 2019 -4,500
                     Accrued Interest 4,500
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