Atharv Art Circle, Sindhudurg, a newly started concern on 1st April 2022. Their Receipts and Payments Account was as follows:Receipts and Payments Account as on 31st March 2023Dr. ReceiptsAmount (₹)Cr. PaymentsAmount (₹)To Life Membership Fees66,000B…

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Q.6 Atharv Art Circle, Sindhudurg, a newly started concern on 1st April 2022. Their Receipts and Payments Account was as follows: Receipts and Payments Account as on 31st March 2023 Dr. ReceiptsAmount (₹)Cr. PaymentsAmount (₹) To Life Membership Fees66,000By Furniture36,000 To Subscriptions1,20,000By Postage12,000 To Donations54,000By Office rent7,800 By Newspaper900 By Electricity Charges1,680 By Investment9,000 By Stationery12,000 By Laptop18,000 By Machinery20,000 By Salary10,000 By Balance c/d: Cash in hand 22,620 Cash at bank 90,0001,12,620 2,40,0002,40,000 Adjustments: Subscription outstanding for the year 2022-23 was ₹ 15,000. Depreciate furniture @ 10% p.a. Entire amount of Life Membership fees and 50% of Donations are to be capitalised. Prepare Income and Expenditure Account for the year ended 31st March 2023 and Balance Sheet as on that date.

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Answer: Surplus ₹ 1,14,020; Balance Sheet total ₹ 2,07,020. Working notes Subscription income = ₹ 1,20,000 received + ₹ 15,000 outstanding = ₹ 1,35,000. Donations ₹ 54,000: 50% (₹ 27,000) is revenue income; 50% (₹ 27,000) is capitalised and shown as Donation Fund. Life membership fees ₹ 66,000 are capitalised (Life Membership Fund). Depreciation on furniture = 10% of ₹ 36,000 = ₹ 3,600 (taken for the full year as the date of purchase is not given). Furniture, investment, laptop and machinery are capital payments and go to the Balance Sheet. The concern is newly started, so there is no opening capital fund; the surplus becomes the capital fund. Income and Expenditure Account for the year ended 31st March 2023 Dr. ExpenditureAmount (₹)Cr. IncomeAmount (₹) To Postage12,000By Subscriptions 1,20,000 Add: Outstanding 15,0001,35,000 To Office rent7,800By Donations (50%)27,000 To Newspaper900 To Electricity Charges1,680 To Stationery12,000 To Salary10,000 To Depreciation on Furniture3,600 To Surplus (excess of income over expenditure) transferred to Capital Fund1,14,020 1,62,0001,62,000 Balance Sheet as on 31st March 2023 LiabilitiesAmount (₹)AssetsAmount (₹) Capital Fund: Surplus for the year1,14,020Furniture 36,000 Less: Depreciation 3,60032,400 Life Membership Fund66,000Investment9,000 Donation Fund (50% capitalised)27,000Laptop18,000 Machinery20,000 Outstanding Subscription15,000 Cash in hand22,620 Cash at bank90,000 2,07,0202,07,020

Atharv Art Circle, Sindhudurg, a newly started concern on 1st April 2022. Their Receipts and Payments Account was as follows:Receipts and Payments Account as on 31st March 2023Dr. ReceiptsAmount (₹)Cr. PaymentsAmount (₹)To Life Membership Fees66,000B…

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Dr. Receipts	Amount (₹)	Cr. Payments	Amount (₹)
To Life Membership Fees	66,000	By Furniture	36,000
To Subscriptions	1,20,000	By Postage	12,000
To Donations	54,000	By Office rent	7,800
		By Newspaper	900
		By Electricity Charges	1,680
		By Investment	9,000
		By Stationery	12,000
		By Laptop	18,000
		By Machinery	20,000
		By Salary	10,000
		By Balance c/d: Cash in hand 22,620 Cash at bank 90,000	1,12,620

	2,40,000		2,40,000

Dr. Expenditure	Amount (₹)	Cr. Income	Amount (₹)
To Postage	12,000	By Subscriptions 1,20,000 Add: Outstanding 15,000	1,35,000
To Office rent	7,800	By Donations (50%)	27,000
To Newspaper	900
To Electricity Charges	1,680
To Stationery	12,000
To Salary	10,000
To Depreciation on Furniture	3,600
To Surplus (excess of income over expenditure) transferred to Capital Fund	1,14,020
	1,62,000		1,62,000

Liabilities	Amount (₹)	Assets	Amount (₹)
Capital Fund: Surplus for the year	1,14,020	Furniture 36,000 Less: Depreciation 3,600	32,400
Life Membership Fund	66,000	Investment	9,000
Donation Fund (50% capitalised)	27,000	Laptop	18,000
		Machinery	20,000
		Outstanding Subscription	15,000
		Cash in hand	22,620
		Cash at bank	90,000
	2,07,020		2,07,020