NON PROFIT ORGANISATION

TYPES OF PROBLEMS :

SPECIMEN OF FINANCIAL STATEMENTS

1. Receipts and Payments Account

(Name of the institution/club etc)

Receipts and Payments Account for the year ended 31st March, 2015
Receipts ₹ Payments ₹
To Opening Balance: By Salaries
Cash By Rent
Bank By Electricity
To Subscriptions: By Purchase of Investment
2013-14 By Purchase of furniture
2014-15 By Closing Balance:
2015-16 Cash
To Donation Bank
To Sale of Sports Equipment

2. Income and Expenditure Account

(Name of the institution/club etc)

Income and Expenditure Account for the year ended............
Expenditure ₹ Income ₹
To Salaries By Subscriptions
To Rent Add: Outstanding
To Insurance Premium Less: Prepaid
By Donation
To Excess of Income over By Admission fees
Expenditure (Surplus)

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3. Balance Sheet

Balance Sheet as at..........

Liabilities ₹ Assets ₹
Capital Fund Building
Add: Surplus Furniture
Subscription (Advance) Sports Equipment
Outstanding Wages Cash at Bank
Cash in Hand

A) Preparation of Income and Expenditure Account and Balance Sheet when Trial Balance and other
information is given

1) From the following Trial Balance of Calcutta Club prepare an Income and Expenditure Account for the year ended
on 31st March, 2015 and a Balance Sheet as on that date (all figures in ₹)
Particulars Dr Cr Particulars Dr Cr
General Fund 30000 Subscriptions received in Advance 1500
Cash in hand 2000 Steward’s and Servant’s Wages 5800
Cash at Bank 3000 Extension of Club House 10000
Sundry Debtors 2400 Printing and Stationery 1000
Sundry Creditors 1500 Law Charges 500
Loan @ 15% (1.7.14) 20000 Annual Subscriptions 30000
Furniture and Fixture 10000 Card and Billiard room receipts 4000
Club House 40000 Washing of liveries and sundries 1600
Stock of Cigar (1.4.14) 500 Wines, Cards and Cigars sold 5000
Rent 6000 Repairs to Club house and furniture 400
Rates, Taxes and Insurance 600 Conversion expenses 1000
Secretary Honorarium 1200 Wine cards and cigars purchased 4000
Entrance fees 1000 Interest on loan 1000
TOTAL 92000 92000

Additional Information:
i) Subscriptions for 2014-15 outstanding ₹ 2000;
ii) Write-off depreciation @ 10% p.a. on furniture and 2% on Club house including the extension; and
iii) Stock of Cigars ₹ 400; Wine ₹ 600on 31.3.2015.

B) Preparation of Income and Expenditure Account and Balance Sheet when Receipts and Payments
and other information are given

2) A summary of receipts and payments account of Medical Aid Society for the year ended 31.3.2014 is given below:
Receipts ₹ Payments ₹
To Balance (1.1.2014) 7000 By Payment for medicines 30000
To Subscriptions 50000 By Honorarium to doctors 10000
To Donations 14500 By Salaries 27500
To Interest on Investment @ 7% p.a. 7000 By Sundry expenses 500
To Charity show proceeds 10000 By Equipment purchased 15000
By Charity show expenses 1000
By balance (31.12.2014) 4500
88500 88500

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 Additional Information: 1.1.2014 31.12.2014
Subscriptions Due 500 1000
Subscriptions received in Advance 1000 500
Stock of Medicines 10000 15000
Amount due to Medicine suppliers 8000 12000
Value of Equipment 21000 30000
Value of Buildings 40000 38000
st
You are required to prepare Income and Expenditure Account for the year ended 31 December, 2014 and the Balance
Sheet as on that date.

3) The Receipts and Payments Account for the year ended 31.12.2014 of the Gardeners’ Club is as follows:
Receipts ₹ Payments ₹
To Balance b/d 87280 By Creditors of seeds and fertilizers 164000
To Subscriptions: Individuals 33700 By Cost of visit to Research Centre 24700
Groups 10000 By Purchase of Garden Equipments 73800
To Sale of Tickets to visit Research Centre 23200 By Repairs to Garden Equipments 10200
To Debtors of Seeds and Fertilizers 130000 By Annual Garden Show:
To Annual Garden Show: Hire of Marquee 36400
Sale of Tickets 82900 Prizes 65000
Competition Fees 41000 By Cost of Printing pamphlets 3500
To Annual Garden Party 20100 By Annual Garden Party Expenses 15000
To Sales of Pamphlets 4000 By Balance c/d 39580
432180 432180

The assets and liabilities as on 1.1.2014 and 31.3.2014 are as follows:

Date Garden Stock of Seeds and Fertilizers
Equipments Pamphlets Debtors Creditors Stock
1.1.2014 24200 2500 22200 80400 26100
31.12.2014 89400 2000 42400 54700 39000

Additional Information:
(1) Annual Subscriptions are ₹ 100 for an individual member and ₹ 250 for a group. On 31.12.2014, 4 group
members had paid in advance and 15 individual members were in arrears. There were no subscriptions in advance
on 31.12.2013, but 10 individual members were in arrears.
(2) Cash received from annual garden party was banked after deducting payments of ₹ 1800 general expenses and ₹
290 postage.
(3) The employee who had handled sales of seeds and fertilisers, had disappeared taking with monies he had received
from the debtors of seeds and fertilisers. It was not known how much he had stolen, but seeds and fertilisers were
sold at a profit of 331/3 on cost price.
(4) ₹ 1500 is yet to be received for pamphlets sold.
You are required to prepare Income and Expenditure Account for the year ended 31.122014 and the Balance Sheet as
on that date.

4) The following is the Receipts and Payments Account of Sydney Club for the year ended 31st March, 2015:
Receipts ₹ Payments ₹
Opening Balance: Salaries 120000
Cash 10000 Creditors 1520000
Bank 3850 Printing and Stationery 70000
Subscriptions Received 202750 Postage 40000
Entrance Donation 100000 Telephones and Telex 52000
Interest Received 58000 Repairs and Maintenance 48000
Sale of Assets 8000 Glass and Table Linen 12000
Miscellaneous Income 9000 Crockery and Cutlery 14000
Receipts at: Garden Upkeep 8000

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 Coffee Room 1070000 Membership Fees 4000
Wines and Spirits 510000 Insurance 5000
Swimming Pool 80000 Electricity 28000
Tennis 102000 Closing Balance:
Cash 8000
Bank 224600
2153600 2153600

The assets and liabilities as on 1.4.2014 were as follows:

Particulars ₹ Particulars ₹
Fixed Assets (net) 500000 Sundry Creditors 112000
Stock 380000 Subscriptions Received in Advance 15000
Investment in 12% Government Securities 500000 Entrance Donation Received, pending 100000
Outstanding Subscriptions 12000 Membership
Prepaid Insurance 1000 Gratuity Fund 150000

The following adjustment are to be made while drawing up the Accounts:

i) Subscriptions received in advance as on 3st March, 2015 was ₹ 18000.
ii) Outstanding subscriptions as on 31st March, 2015 was₹ 7000.
iii) Outstanding expenses are salaries ₹ 8000 and Electricity ₹ 15000.
iv) 50% of the Entrance Donation was to be capitalised. There was no pending membership as on 31st March, 2015.
v) The cost of assets sold net as on 1.4.2014 was ₹ 10000.
vi) Depreciation is to be provided at the rate of 10% on assets.
vii) A sum of ₹ 20000 received in October 2014 as Entrance Donation from an applicant was to be refunded as he
has not fulfilled the requisite membership qualifications. The refund was made on 3.6.2015.
viii) Purchases made during the year amounted to ₹ 1500000.
ix) The value of closing stock was ₹ 210000.
x) The club as a matter of policy charges-off to Income and Expenditure Account all purchases made on account of
crockery, cutlery, glass and linen in the year of purchase.
You are required to prepare an Income and Expenditure Account for the year ended 31st March, 2015 and the Balance
Sheet as on 31st March, 2015 along with necessary workings.

5) The following is the Receipts and Payments Account of Barisha Recreation Club for the year ended 31.12.2014:

Receipts ₹ Payments ₹
To Cash in Hand 500 By Rent of Club House 1300
To Cash in Bank 6000 By Painting of Club House 700
To Member’s Subscriptions: By Wages of Ground Maintenance 1500
Ordinary for 2013 100 By General Expenses 1300
Ordinary for 2014 1800 By Electricity Charges 1800
Ordinary for 2015 200 By Investment 10000
To Life Membership Subscriptions 2000 By secretary’s honorarium 600
To Sale of Tickets for Annual Exhibition 10000 By Annual Meeting Expenses 400
To Sale of Refreshments 12000 By Sports Equipments 1800
To Sale of Furniture (original cost on 1.1.13 1300 By Purchase of Refreshment 5500
was ₹ 500) 100 By Printing and Stationery 500
By Insurance 300
By Cash in Hand 2000
By Cash in Bank 6300
34000 34000

The following information are also available:

a) On 31.12.2013, outstanding subscriptions for 2013 was₹ 150.
b) On 31.12.2013, advance subscriptions for 2014 received was₹ 50.
c) On 31.12.2014, outstanding subscriptions for 2014 was₹300.
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d) A Life Membership Scheme was introduced in 2013. Under the scheme, life membership subscription is ₹ 500
and it was to be apportioned to income 1/10th every year over a period of 10 years. Life membership subscriptions
totalling ₹ 2500 were collected during 2013.
e) On 1.1.2014, Investment was ₹ 20000 and interest accrued on investment on 31.12.2014 was ₹ 1200.
f) On 1.1.2013, Furniture costing ₹ 8000 were purchased and it was decided to write off depreciation on furniture
and sports equipments @ 10% p.a. on cost.
g) In 2013, a plot of land was purchased for ₹ 20000 to construct club house.
h) Other assets and liabilities of the club were:
Stock of Refreshment Insurance prepaid Rent accrued Creditors for Refreshment
31.12.2013 1900 70 200 400
31.12.2014 2100 50 100 500
You are required to prepare an Income and Expenditure Account for the year 31.12.2014 and also a Balance Sheet as
on that date.

C) Preparation of Income and Expenditure Account and Balance Sheet from Incomplete Records

6) The comrades club makes up its account to 31st December in each year. On 31st December, 2014 the treasurer left
the club premises and has not been seen since. An examination of the records showed that the books had not been
written up for a considerable time and it was decided to reconstruct the figures from 1st January 2014.

A summary of the Bank Account for the year showed the following:

Receipts ₹ Payments ₹
Balance (1.1.2014) 416 Rent and Rates 460
Bank Deposits 42610 Insurance 40
Light and Heat 156
Bar purchases 35067
Telephone 59
Cash withdrawn 5848
Balance (31.12.2014) 1396
43026 43026

The following information is also obtained:

i) The Barman places takings in the bank ‘night safe’ on his way home for crediting to the club account. The duplicate
pay-in-slips total ₹ 40612 for the year. The treasurer had no access to bar takings or stock.
ii) The receipt counterfoils for members’ subscriptions total ₹ 3050 for the year.
iii) A summary of expenditure for petty cash and wages was as follows
Glasses, crockery and Maintenance – ₹ 1310; Wages – ₹ 2658;
National Insurance – ₹ 210; Sundry expenses – ₹ 257.
iv) Outstanding amounts and prepayments at 31st December, were: 2013 2014
Rates prepaid 26 28
Rent outstanding 40 82
Electricity outstanding 24 18
v) The Bar stock on 1.1.2014 was ₹ 3607 and on 31 December, 2014 was ₹ 2916. The cash in hand with the
st

treasurer at the beginning of the year was ₹ 35.

You are required to prepare:
(i) A summary of the cash positions for the year ended 31st December, 2014 indicating the amount, if any, to be
claimed under the club’s fidelity insurance policy;
(ii) An Income and Expenditure Account for the year 2014.

7) Universal Brotherhood Club does not maintain complete double entry books of account. From the following details,
prepare a Receipts and Payment, and an Income and Expenditure Account for the year ended 31.12.2014, and a
Balance Sheet as on that date (all figures in rupees):

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 Date Outstanding Advance Outstanding Advance Cash and 5% Furniture Sports
Subscriptions Subscriptions Salaries Salaries Bank Investment Goods
1.1.14 14000 2800 1400 ---- 14000 14000 2800 5600
31.12.14 19600 5600 700 700 ? 7000 1400 11200

Subscriptions for the year amount to ₹ 70000. Salaries paid ₹ 15400. Face value of investments was ₹ 16800. 50% of
investment was sold at 80% of the face value. Interest on investments left unsold was received. ₹ 1400 furniture was
sold for ₹ 700 at the beginning of the year. Sports goods were purchased at the end of the year. Charge 20%
depreciation on sports goods and 10% on furniture. Sports expenses amount ₹ 14000. Miscellaneous expenses are ₹
4200 and rent amount to ₹ 8400.

D) Preparation of Receipts and Payment Account, Income and Expenditure Account and Balance
Sheet when Ledger Balances and other information are given

8)The following balances are obtained from the books of Kanpur Cricket Club as on 31.3.2014 and 31.3.2015 (all
figures in rupees):

Particulars 31.3.2014 31.3.2015 Particulars 31.3.2014 31.3.2015

Buildings 80000 85500 Outstanding Expenses 3000 1200
Furniture 40000 30600 Sports Equipments 24000 21600
Advance Subscriptions 1500 1000 Investments 12000
Arrears of Subscriptions 3000 5000 Books 15000 16200
Prepaid Expenses 800 1000 Cash 16000 17100
Consider the following information relevant to the year 2014-15:
a) Depreciation provided for the year: Building – ₹ 4500; Furniture ₹ 3400; Sports Equipments – ₹ 5400; Books –
₹ 1800.
b) Some old furniture standing in the books for ₹ 6000 as on 1.4.2014 was sold for ₹ 4000 on the same date.
c) The Club had 300 members on 31.3.2015 as per the Register of Members. No fresh members were admitted during
the year but 10 members left the Club on 1.10.2014.
d) Subscriptions Payable – ₹ 15 per month.
e) Donation received ₹ 5000 has been capitalised.
f) Considerable expenses were paid during the year.
You are required to prepare Receipts and Payments Accounts and Income and Expenditure Account for the year ended
31.3.2015 and the Balance Sheet as on that date.

E) Preparation of Receipts and Payment Account when Income and Expenditure Account, Balance
Sheet and other information are given

9) From the following Income and Expenditure Account and the Balance Sheet of a Club, prepare its Receipts and
Payments Account and Subscriptions Account for the year ended 31.3.2015.
Income and Expenditure Account for the year ended 31.3.2015
Expenditure ₹ Income ₹
To upkeep of ground 10000 By Subscriptions 17320
To Printing 1000 By Sale of newspapers (old) 260
To Salaries 11000 By Lectures 1500
To Depreciation on furniture 1000 By Entrance Fees 1300
To Rent 600 By Miscellaneous income 400
By Deficit 2820
23600 23600

Balance Sheet as at 31.3.2015

Liabilities ₹ Assets ₹
Subscriptions in advance 100 Furniture 9000
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Prize fund: Ground and Building 47000
Opening Balance 25000 Prizes fund investment 20000
Add: Interest 1000 Cash in hand 2300
26000 Subscriptions (2014-2015) 700
Less: Prizes 2000 24000
General fund
Opening Balance 56420
Less: Deficit 2820
53600
Add: Entrance Fees 1300
54900
79000 79000

The following adjustments have been made in the above accounts:

1. Upkeep of ground ₹ 600 and Printing ₹ 240relating to 2013-14 were paid in 2014-15.
2. One-half of entrance fees has been capitalised by transfer to General Fund.
3. Subscriptions outstanding in 2013-14 was ₹ 800 and for 2014-15 was ₹ 700.
4. Subscriptions received in advance in 2013-14 was ₹ 200 and in 2014 for 2014-15 was ₹ 100.

F) Preparation of Opening and Closing Balance Sheet when Receipts and Payment Account and
Income and Expenditure Account are given

10) Adult Education Society submits you the following Receipts and Payments Account and Income and Expenditure
Account for the year ended 31.3.2015:
Receipts and Payments Account (2014-15)
Receipts ₹ Payments ₹
To Balance b/d 450 By Printing Charges 75
To Interest: 2013-14 100 By Advertisement 141
2014-15 150 250 By Salary to staff (including payment for 1300
To Tution Fees: 2014-15 1000 2013-2014)
2015-16 100 1100 By Rent 520
420 By Miscellaneous Expenses 110
To Entrance Fees: 2014-15 By Furniture Purchase 670
By Balance c/d 1374
To Membership Fees:2013-14 300 1840
2014-15 1150
2015-16 390
To Miscellaneous Income 130
4190

4190

Income and Expenditure Account (2014-15)

Expenditure ₹ Income ₹
To Printing Charges 80 By Tution Fees 1100
To Advertisement 150 By Membership Fees 1150
To Rent 600 By Miscellaneous Income 130
To Salary to Staff 1200 By Interest 160
To Miscellaneous Expenses 110
To Excess of Income over Expenditure 400
2540 2540

You are asked to prepare the Balance Sheets of the Society as on 31.3.2014 and 31.3.2015.
Additional Information: On 31.3.2014 - Investments ₹ 4000; Furniture ₹ 2000; Library Books ₹ 1500.

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