Financial Statements Financial Statements of Not-For-Profit Organizations

of Not-For-Profit Organizations

Practical Questions
Question No. 1

The receipts and payments for the Swaraj Club for the year ended March 31, 2016 were: Entrance fees ₹ 300;
Membership Fees ₹ 3,000; Donation for Club Pavilion ₹ 10,000, Foodstuff sales ₹ 1,200; Salaries and Wages ₹
1,200 Purchase of Foodstuff ₹ 800; Construction of Club Pavilion ₹ 11,000; General Expenses ₹ 600; Rent and
Taxes ₹ 400; Bank Charges ₹ 160.

Cash in hand-April. 1st ₹ 200, March 31st ₹ 350

Cash in Bank-April. 1st ₹ 400; March 31st ₹ 590

You are required to prepare Receipts and Payment Account.

Swaraj Club
Receipts and Payments Accounts fortheyearended 31stMarch,2016

Receipts ₹ Payments ₹
To Balance b/d(opening bal.) By Salaries and Wages 1,200
Cash in hand 200
To Cash with bank 400 By Purchase of Foodstuff 800
To Entrance Fees 300 By Club Pavilion (Expenditure
To Membership Fees 3,000 on its construction) 11,000
To Donation of Account By General Expenses 600
of Club Pavilion 10,000 By Rent and Taxes 400
To Sales of foodstuff 1,200 By Bank Charges 160
By Balance c/d (closing bal)
Cash in hand 350
Cash in bank 590
15,100 15,100

Question No. 2

The following was the Receipts and Payments Account of Exe Club for the year ended March. 31, 2016

All the figures in thousands

Receipts ₹ Payments ₹

Cash in hand 100 Groundsman’s Fee 750

Balance at Bank as per Pass Book: Moving Machine 1,500

Deposit Account 2,230 Rent of Ground 250

Current Account 600 Cost of Teas 250
Bank Interest 30 Fares 400

By CMA, CS Rohan Nimbalkar 1

 Financial Statements of Not-For-Profit Organizations

Donations and Subscriptions 2,600 Printing & Office Expenses 280

Receipts from teas 300 Repairs to Equipment 500

Contribution to fares 100 Honorarium to Secretary and Treasurer of 400
2015
Sale of Equipment 80 Balance at Bank as per Pass Book
Net proceeds of Variety Entertainment 780 Deposit Account 3,090

Donation for forth coming Tournament 1,000 Current Account 150

7,820 Cash in hand 250
7,820 7,820

You are given the following additional information:

April, 1, 2015 March, 31, 2016

₹ ₹
Subscription due 150 100
Amount due for printing etc. 100 80
Cheques unpresented being payment for repairs 300 260
Estimated value of machinery and equipment 800 1,750
Interest not yet entered in the Pass book 20
Bonus to Groundsman o/s. 300
For the year ended March. 31, 2016, the honorarium to the Secretary and Treasurer are to be increased by a total
of ₹ 200.
Required - Prepare the Income and Expenditure Account for period ending 31-03-2016 and the relevant Balance
Sheet.

SOLUTION

IncomeandExpenditureAccountofExeClub for the year ending 31st March, 2016 (all figures in thousands)

Expenditure ₹ Income ₹
To Groundsman’s fee 750 By Donations and 2,550
To Rent of Ground 250 Subscription By Receipts 50
To Fares’ Expenses 400 from teas
Less : Contribution (100) 300 (Fares) less expenses (₹ 300
To Printing & Office Expenses 260 - ₹ 250)
To Repairs 460 By Proceeds of Variety 780
To Depreciation on Machinery Entertainment 50
Opening balance and Purchases 2,300 By Interest (₹ 30 + ₹ 20)
Less: Closing Balance (1,750)
550
Less: Sale (80) 470

By CMA, CS Rohan Nimbalkar 2

 Financial Statements of Not-For-Profit Organizations

To Honorarium to Sect. & Treasurer 600

To Bonus to Groundsman 300
To Excess of Income over Expenditure 40

3,430 3,430

Balance Sheet of Exe Club as on 31st March, 2016

Liabilities ₹ Assets ₹
Outstanding Expenses:
Grounds man Bonus 300 Cash in hand 250
Printing 80 Cashin Deposit A/c 3,090
Honorarium 600 Subscription Due Interest 100
Bank Overdraft (₹ 260-₹ 150) 110 Due 20
Capital Fund: Machinery &Equipments 1,750
Opening 3,080
Add: Surplus for the year 40 3,120
Tournament Fund (Donation) 1,000
5,210 5,210

Balance Sheet as on 1st April, 2015

Liabilities ₹ Assets ₹
Outstanding Expenses and Cash in hand 100
Honorarium (₹ 100 + ₹ 400) 500 Cash in Deposit A/c 2,230
Capital Fund (Balancing Figure) 3,080 Cash in Current A/c 300
Subscription Due 150
Machinery 800
3,580 3,580

Question No. 3

The Income and Expenditure Account of the Youth Club for the Year 2016 is as follows:

Expenditure ₹ Income ₹
To Salaries 4,750 By Subscription 7,500
To General Expenses 500 By Entrance Fees 250
To Audit Fee 250 By Contribution for annual dinner 1,000
To Secretary’s Honorarium 1,000 By Annual Sport meet receipts 750
To Stationery & Printing 450
To Annual Dinner Expenses 1,500
To Interest & Bank Charges 150
To Depreciation 300
To Surplus 600
9,500 9,500

This account had been prepared after the following adjustments:

By CMA, CS Rohan Nimbalkar 3

 Financial Statements of Not-For-Profit Organizations

₹
Subscription outstanding at the end of 2015 600
Subscription received in Advance on 31st December, 2015 450
Subscription received in advance on 31st December, 2016 270
Subscription outstanding on 31st December, 2016 750

Salaries Outstanding at the beginning and the end of 2016 were respectively ₹ 400 and ₹ 450. General Expenses
include insurance prepaid to the extent of ₹ 60. Audit fee for 2016 is as yet unpaid. During 2016 audit fee for
2015 was paid amounting to ₹ 200.

The Club owned a freehold lease of ground valued at ₹ 10,000. The club had sports equipment on 1st January,
2016 valued at ₹ 2,600. At the end of the year, after depreciation, this equipment amounted to ₹ 2,700. In 2015,
the Club has raised a bank loan of ₹ 2,000. This was outstanding throughout 2016. On 31st December, 2016
cash in hand amounted to ₹ 1,600.
Required

Prepare the Receipts and Payments Account for 2016 and Balance Sheet as at the end of the year.

SOLUTION
The Youth Club Receipts and Payments Account
for the year ended 31st December, 2016

Receipts ₹ ₹ Payments ₹ ₹
To Balanceb/d(balancingfigure) 1,390 By Salaries 4,750
To Subscriptions as per Income & 7500 Add: Paid for 2015 400
Expenditure Account 5,150
Add: 2015’s Received 600 Less: Unpaid for 2016 By (450) 4,700
2017’s Received 270 General Expenses 500
8,370 Add : Paid for 2017 60 560
Less: 2016’s Received in 2015 (450) By Audit fee (2016) Secy. By 200
7,920 Honorarium 1,000
Less: 2016’s Outstanding (750) 7,170 By Stationery & Printing 450
To Entrance Fees 250 By Annual Dinner Expenses 1,500
To Contribution for annual By Interest & Bank Charges 150
dinner 1,000 By SportsEquipments 400
To Sport meet :
Receipt less 750 [2700-(2600-300)] 1,600
Balance c/d

10,560 10,560
To Balance b/d 1,600

By CMA, CS Rohan Nimbalkar 4

 Financial Statements of Not-For-Profit Organizations

Balance Sheet of Youth Club as at December 31, 2016

Liabilities ₹ ₹ Assets ₹ ₹
Subscription received FreeholdGround 10,000
in advance 270 Sport Equipment:
Audit Fee Outstanding 250 As per last Balance
Salaries Outstanding 450 Sheet Additions 2,600
Bank Loan 2,000 400
CapitalFund : Less : Depreciation 3,000
Balance as per previous (300) 2,700
Balance Sheet 11,540 Subscription Outstanding 750
Add : Surplus for 2016 600 12,140 Insurance Prepaid 60
Cash in hand 1,600

15,110 15,110

Balance Sheet of Youth Club as at 31st December, 2015

Liabilities ₹ Assets ₹
Subscriptions received in advance 450 Freehold Ground 10,000
Salaries outstanding 400 Sports Equipment 2,600
Audit fees unpaid 200 Subscriptions Outstanding 600
Bank Loan 2,000 Cash in hand 1,390
Capital Fund (balancing figure) 11,540
14,590 14,590

Question No. 4

From the following Income and Expenditure Account and the Balance Sheet of a club, prepare its Receipts
and Payments Account and Subscription Account for the year ended 31st March, 2016:

Income & Expenditure Account for the year 2015-16

₹ ₹
Upkeep of Ground 10,000 By Subscriptions 17,320
Printing 1,000 By Sale of Newspapers (Old) 260
Salaries 11,000 By Lectures 1,500
Depreciation on Furniture 1,000 By Entrance Fee 1,300
Rent 600 By Misc. Income 400
By Deficit 2,820
23,600 23,600

By CMA, CS Rohan Nimbalkar 5

 Financial Statements of Not-For-Profit Organizations

Balance Sheet as at 31st March, 2016

Liabilities ₹ ₹ Assets ₹
Subscription in Advance (2016-17) 100 Furniture 9,000
Prize Fund : Ground and Building 47,000
Opening Balance 25,000 Prize Fund Investment 20,000
Add : Interest 1,000 Cash in Hand 2,300
Subscription (outstanding)
26,000 (2015-16) 700
Less : Prizes (2,000) 24,000
General Fund :
Opening Balance 56,420
Less : Deficit (2,820)
53,600
Add : Entrance Fee 1,300 54,900
79,000 79,000

The following adjustments have been made in the above accounts:

(1) Upkeep of ground ₹ 600 and Printing ₹ 240 relating to 2014-2015 were paid in 2015-16.
(2) One-half of entrance fee has been capitalised by transfer to General Fund.
(3) Subscription outstanding in 2014-15 was ₹ 800 and for 2015-16 ₹ 700.
(4) Subscription received in advance in 2014-15 was ₹ 200 and in 2015-16 for 2016-17 ₹ 100.

SOLUTION

Receipts and Payments Account for the year ending 31st March, 2016

Receipts ₹ Payments ₹
To Balance b/d By Upkeep of Ground
(Balancing figure) 4,660 (10,000 + 600) 10,600
To Subscription 17,320 By Printing (1,000 + 240) 1,240
To Interest on Prize Fund Investments 1,000 By Salaries 11,000
To Lecture (fee) 1,500 By Rent 600
To Entrance Fee 2,600 By Prizes 2,000
To Sale of Newspapers (old) 260 By Balance c/d 2,300
To Misc. Income 400
27,740 27,740

Working note: ₹ 600 paid for upkeep of ground for 2014-15 and ₹ 240 paid for printing have been added to
the amount shown as expenditure for the year to arrive at total payment under these heads.

By CMA, CS Rohan Nimbalkar 6

 Financial Statements of Not-For-Profit Organizations

Subscription Account

2015 ₹ 2015 ₹
April To Subscription April 1 By Cash(Balancingfigure) 17,320
Outstanding By Subscription
(2014-15) 800 Outstanding (2015-16) 700
To Subscription By Subscription
In Advance (2016-17) 100 in Advance (2014-15) 200
2016
March To Income &
Expenditure A/c 17,320
18,220 18,220

Question No. 5

The Sportwriters Club gives the following Receipts and Payments Account for the year ended March 31, 2016:
Receipts and Payments Account

Receipts ₹ Payments ₹
Balance b/d 4,820 By Salaries 12,000
Subscriptions 28,600 By Rent and electricity 7,220
Miscellaneous income 700 By Library books 1,000
Interest on Fixed deposit 2,000 By Magazines and newspapers 2,172
By Sundry expenses 10,278
By Sports equipments 1,000
By Balance c/d 2,450
36,120 36,120

Figures of other assets and liabilities are furnished as follows:

As at 31st March As at 31st March

2015 2015
₹ ₹
Salaries outstanding 710 170
Outstanding rent & electricity 864 973
Outstanding for magazines and newspapers 226 340
Fixed Deposit (10%) with bank 20,000 20,000
Interest accrued thereon 500 500
Subscription receivable 1,263 1,575
Prepaid expenses 417 620
Furniture 9,600
Sports equipments 7,200
Library books 5,000

The closing values of furniture and sports equipments are to be determined after charging depreciation at
10% and 20% p.a. respectively inclusive of the additions, if any, during the year. The Club's library books are
revalued at the end of every year and the value at the end of March 31, 2016 was ₹ 5,250.

Required

By CMA, CS Rohan Nimbalkar 7

 Financial Statements of Not-For-Profit Organizations

From the above information you are required to prepare:

(a) The Club's Balance Sheet as at March 31, 2015;
(b) The Club's Income and Expenditure Account for the year ended March 31, 2016.
(c) The Club's Closing Balance Sheet as at March 31, 2016.

SOLUTION

a) Sportswriters Club Balance Sheet as on 31st March, 2015

Liabilities ₹ ₹ Assets ₹
Outstanding expenses : Furniture 9,600
Salaries 710 Library Books 5,000
Rent &Electricity 864 Sports Equipment 7,200
Magazines &Newspapers 226 1,800 Fixed Deposit 20,000
Capital Fund (Balancing figure) 47,000 Cash in hand & at Bank 4,820
Prepaid Expenses 417
Subscription receivable 1,263
Interest accrued 500
48,800 48,800

b) Income and Expenditure Account for the year ending 31st March, 2016

Expenditure ₹ Income ₹
To Salaries 11,460 By Subscription By 28,912
To Rent & Electricity 7,329 Interest on FD By 2,000
To Magazines & Newspapers To 2,286 Misc. Income 700
Sundry Expenses 10,075 By Excess of expenditure
To Depreciation : over income 2,888
Furniture 960
Sports Equipment 1,640
Library Books 750 3,350
34,500 34,500

c) Balance Sheet of Sports Writers Club as on 31st March, 2016

Liabilities ₹ ₹ Assets ₹ ₹
Outstanding Expenses: Furniture
Salaries 170 Cost 9,600
Rent & Electricity 973 Less : Depreciation (960) 8,640
Newspapers Capital 340 1,483 Magazines&Sport
Fund: Equipment:
Opening balance 47,000 Opening balance 7,200
Less : Excess of exp. Addition 1,000
(2,888) 44,112
overincome
8,200

By CMA, CS Rohan Nimbalkar 8

 Financial Statements of Not-For-Profit Organizations

Less : Depreciation (1,640)

6,560
Library Books :
Opening Balance 5,000
Addition 1,000
6,000
Less : Depreciation (750) 5,250
Fixed Deposit 20,000
Cash in hand & at bank 2,450
Prepaid Expenses 620
Subscription Receivable 1,575
Interest accrued 500

45,595 45,595

Working Notes:

(i) Expenses Salaries Rent & Magazines Sundry

Electricity & News- Expenses
Papers
₹ ₹ ₹ ₹
Paid during the year 12,000 7,220 2,172 10,278
Add : Outstanding on 31.3.2016 170 973 340 –
Less : Prepaid on 31.3.2015 – – – 417
12,170 8,193 2,512 10,695
Less : Outstanding on 31.3.2015 (710) (864) (226) –
Less : Prepaid on 31.3.2016 – – – (620)
Expenditure for the year 11,460 7,329 2,286 10,075
₹
(ii) Depreciation
(a) Furniture @10% on ₹ 9,600 960
(b) Sports Equipment @ 20% on ₹ 8,200 1,640
(c) Library books - book value 6,000
Revalued at (5,250) 750
(iii) Subscription
Received in cash 28,600
Add : Receivable on 31.3.2016 1,575
30,175
Less: Receivable on 31.3.2015 (1,263)
28,912

By CMA, CS Rohan Nimbalkar 9

 Financial Statements of Not-For-Profit Organizations

Question No. 6

From the following data, prepare an Income and Expenditure Account for the year ended 31st December,
2016, and Balance Sheet as at that date of the Mayura Hospital.

Receipts and Payments Account for the year ended 31 December, 2016

Receipts ₹ ₹ Payments ₹ ₹
To Balance b/d By Salaries :
Cash 400 (₹3,600 for 2015) 15,600
Bank 2,600 3,000 By Hospital Equipment 8,500
To Subscriptions : By Furniture purchased 3,000
For 2015 2,550 By Additions to Building 25,000
For 2016 12,250 By Printing & Stationery 1,200
For 2017 1,200 By Diet expenses 7,800
By Rent and rates
To Government Grant : (₹150 for 2017) 1,000
By Electricity and water
For building 40,000 charges 1,200
For maintenance 10,000 By office expenses 1,000
Fees from sundry
Patients 2,400 By Investments 10,000
To Donations (not to be
capitalised) 4,000 By Balances :
To Net collections from
benefit shows 3,000 Cash 700
Bank 3,400 4,100
78,400 78,400

Additional information:

₹
Value of building under construction as on 31.12.2016 70,000
Value of hospital equipment on 31.12.2016 25,500
Building Fund as on 1.1. 2016 40,000
Subscriptions in arrears as on 31.12.2015 3,250
Investments in 8% Govt. securities were made on 1st July, 2016.

SOLUTION
Mayura Hospital Income & Expenditure Account
for the year ended 31 December, 2016
Expenditure ₹ Income ₹
To Salaries 12,000 By Subscriptions 12,250
To Diet expenses 7,800 By Govt. Grants (Maintenance) 10,000
To Rent & Rates 850 By Fees, Sundry Patients 2,400
To Printing & Stationery 1,200 By Donations 4,000
To Electricity & Water-charges 1,200 By Benefit shows (net collections) 3,000
To Office expenses 1,000 By Interest on Investments 400
To Excess of Income over
expenditure transferred to Capital
Fund
32,050 32,050

By CMA, CS Rohan Nimbalkar 10

 Financial Statements of Not-For-Profit Organizations

Balance Sheet as at 31st December, 2016

Liabilities ₹ ₹ Assets ₹ ₹
Capital Fund : Building :
Opening balance 24,650 Opening balance 45,000
Excess of Income Addition 25,000 70,000
Over Expenditure 8,000 32,650 Hospital Equipment :
Building Fund : Opening Opening balance 17,000
balance Add : Govt. 40,000 Addition 8,500 25,500
Grant Subscriptions 40,000 80,000 Furniture 3,000
received in advance Investments -
10,000
1,200 8% Govt. Securities
700
Subscriptions receivable
400
Accrued interest

Prepaid expenses (Rent) 150

Cash at Bank 3,400
Cash in hand 700
1,13,850 1,13,850

Working Notes:

Balance sheet as at 31st December, 2015

Liabilities ₹ Assets ₹
(1) Capital Fund Building 45,000
(Balancing Figure) 24,650 Equipment 17,000
Building Fund 40,000 Subscription Receivable 3,250
Creditors for Expenses : Cash atBank 2,600
3,600
Salaries payable Cash in hand 400
68,250 68,250
(2) Value of Building ₹
Balance on 31st December, 2016 70,000
Paid during the year 25,000
Balance on 31st December, 2015 45,000
(3) Value of Equipment
Balance on 31st December, 2016 25,500
Paid during the year (8,500)
Balance on 31st December, 2015 17,000
(4) Subscription due for 2015
Receivable on 31st December, 2015 3,250

By CMA, CS Rohan Nimbalkar 11

 Financial Statements of Not-For-Profit Organizations

Received in 2016 2,550

Still Receivable for 2015 700

Question No. 7
The following is the Receipts and Payments Account of Lion Club for the year ended 31st March, 2016.

Receipts ₹ Payments ₹
Opening balance Salaries 1,20,000
Cash 10,000 Creditors 15,20,000
Bank 3,850 Printing and stationary 70,000
Subscription received 2,02,750 Postage 40,000
Entrance donation 1,00,000 Telephones and telex 52,000
Interest received 58,000 Repairs and maintenance 48,000
Sale of assets 8,000 Glass and table linen 12,000
Miscellaneous income 9,000 Crockery and cutlery 14,000
Receipts at Garden upkeep 8,000
Coffee room 10,70,000 Membership fees 4,000
Soft drinks 5,10,000 Insurance 5,000
Swimming pool 80,000 Electricity 28,000
Tennis court 1,02,000 Closing balance
Cash 8,000
Bank 2,24,600
21,53,600 21,53,600

The assets and liabilities as on 1.4.2015 were as follows: ₹

Fixed assets (net) 5,00,000
Stock 3,80,000
Investment in 12% Government securities 5,00,000
Outstanding subscription 12,000
Prepaid insurance 1,000
Sundry creditors 1,12,000
Subscription received in advance 15,000
Entrance donation received pending membership 1,00,000
Gratuity fund 1,50,000
The following adjustments are to be made while drawing up the accounts:
1. Subscription received in advance as on 31st March, 2016 was ₹ 18,000.
2. Outstanding subscription as on 31st March, 2016 was ₹ 7,000.
3. Outstanding expenses are salaries ₹ 8,000 and electricity ₹ 15,000.
4. 50% of the entrance donation was to be capitalized. There was no pending membership as on 31st
March, 2016.
5. The cost of assets sold net as on 1.4.2015 was ₹ 10,000.
6. Depreciation is to be provided at the rate of 10% on assets.

By CMA, CS Rohan Nimbalkar 12

 Financial Statements of Not-For-Profit Organizations

7. A sum of ₹ 20,000 received in October 2015 as entrance donation from an applicant was to be refunded
as he has not fulfilled the requisite membership qualifications. The refund was made on 3.6.2016.
8. Purchases made during the year amounted ₹ 15,00,000.
9. The value of closing stock was ₹ 2,10,000.
10. 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, 2016 and the
Balance Sheet as on 31st March, 2016 along with necessary workings.

Income and Expenditure Account of Lion Club for the year ended 31st
March, 2016

Expenditure ₹ Income ₹
To Salaries 1,28,000 By Subscription 1,94,750
To Printing and stationary 70,000 By Entrance donation 90,000
To Postage 40,000 By Interest 60,000
To Telephone and telex 52,000 By Miscellaneous income 9,000
To Repairs and maintenance 48,000 By Profit from operations 92,000
To Glass and table linen 12,000 By Excess of expenditure over income
To Crockery and cutlery 14,000 (deficit)transferredtocapitalfund 30,250
To Garden upkeep 8,000
To Membership fees 4,000
To Insurance 6,000
To Electricity charges 43,000
To Loss on sale of assets 2,000
To Depreciation 49,000
4,76,000 4,76,000

Balance Sheet of Lion Club as on 31st March, 2016

Liabilities Assets
Capital fund 10,89,600 Fixedassets 4,41,000
Gratuity fund 1,50,000 Stock 2,10,000
Sundry creditors 92,000 Investments 5,00,000
Subscription received in 18,000 Subscription 7,000
advance outstanding
Entrance donation 20,000 Interest accrued 2,000
refundable
Outstanding expenses 23,000 Bank 2,24,600
Cash 8,000
13,92,600 13,92,600

By CMA, CS Rohan Nimbalkar 13

 Financial Statements of Not-For-Profit Organizations

Working Notes:
1. Opening Balance Sheet
Balance Sheet of Lion Club as on 1st April, 2015

Liabilities ₹ Assets ₹
Sundry creditors 1,12,000 Fixed assets 5,00,000
Subscription received in advance 15,000 Stock 3,80,000
Entrance donation received in advance 1,00,000 Investments 5,00,000
Gratuity fund 1,50,000 Subscription outstanding 12,000
Capital fund (balance figure) 10,29,850 Prepaid expenses 1,000
Cash 10,000
Bank 3,850
14,06,850 14,06,850

2. Subscription

₹
Subscription received during the year 2,02,750
Add: Outstanding subscription on 31.3.2016 7,000
2,09,750
Add: Received in advance as on 1.4.2015 15,000
2,24,750
Less: Outstanding subscription as on 1.4.2015 (12,000)
2,12,750
Less: Received in advance as on 31.3.2016 (18,000)
1,94,750

3. Entrance donation

Entrance donation received during the year 1,00,000

Add: Received in advance as on 1.4.2015 1,00,000
2,00,000
Less: Entrance donation in respect of ineligible member (20,000)
1,80,000
Less: 50% capitalized (90,000)
Taken to income and expenditure account (90,000)

4. Loss on sale of asset

Cost of asset sold 10,000

Less: Sale proceeds (8,000)
Loss on sale of asset 2,000

By CMA, CS Rohan Nimbalkar 14

 Financial Statements of Not-For-Profit Organizations

5. Depreciation

Fixed asset as per trial balance 5,00,000

Less: Cost of asset sold (10,000)
4,90,000
Depreciation on ₹ 4,90,000 @ 10% 49,000

6. Salaries
₹
Salary paid during the year 1,20,000
Add: Outstanding as on 31.3.2016 8,000
1,28,000

7. Electricity charges

₹
Electricity charges paid during the year 28,000
Add: Outstanding as on 31.3.2016 15,000
43,000

8. Interest

₹
Interest on 12% Government securities investment (₹ 5,00,000 @ 12% p.a.) 60,000
Less: Interest received during the year (58,000)
Interest accrued 2,000
Interest credited to Income and Expenditure Account 60,000

9. Profit fromoperations

₹
Cost of goods sold: 3,80,000
Opening stock 15,00,000
Add: Purchases 18,80,000
Less: Closing stock (2,10,000)
Cost of goods sold (A) 16,70,000
Receipts from operations:
Receipts from coffee room 10,70,000
Receipts from soft drinks 5,10,000
Receipts from swimming pool 80,000
Receipts from tennis court 1,02,000
Total receipts (B) 17,62,000
Profits from operations (B-A) 92,000

By CMA, CS Rohan Nimbalkar 15

 Financial Statements of Not-For-Profit Organizations

10. Insurance

Insurance paid during the year 5,000

Add: Prepaid insurance as on 1.4.2015 1,000
6,000

11. Sundry creditors

Opening balance as on 1.4.2015 1,12,000

Add: Purchases made during the year 15,00,000
16,12,000
Less: Payments made during the year (15,20,000)
Closing balance as on 31.3.2016 92,000

12. Outstanding expenses

₹
Outstanding salaries 8,000
Outstanding electricity charges 15,000
Outstanding expenses 23,000

13. Fixed assets

₹
Fixed assets as on 1.4.2015 5,00,000
Less: Cost of assets sold (10,000)
4,90,000
Less: Depreciation (49,000)
Fixed assets as on 31.3.2016 4,41,000

14. Capitalfund

₹
Capital fund as on 1.4.2015 10,29,850
Add: Entrance donation capitalised 90,000
11,19,850
Less: Excess of expenditure over income (30,250)
Balance as on 31.3.2016 10,89,600

By CMA, CS Rohan Nimbalkar 16

 Financial Statements of Not-For-Profit Organizations

Question No. 8
From the following balances and particulars of Republic College prepare Income & Expenditure Account for the
year ended March, 2016 and a Balance Sheet as on the date :

Particulars ₹ ₹
Seminars & Conference Receipts 4,80,000
Consultancy Receipts 1,28,000
Security Deposit-Students 1,50,000
Capital fund 16,06,000
Research Fund 8,00,000
Building Fund 25,00,000
Provident Fund 5,10,000
Tuition Fee received 8,00,000
Government Grants 5,00,000
Donations 50,000
Interest & Dividends on Investments 1,85,000
Hostel Room Rent 1,75,000
Mess Receipts (Net) 2,00,000
College Stores-Sales 7,50,000
Outstanding expenses 2,25,000
Stock of-stores and Supplies (Opening) 3,00,000
Purchases-Stores & Supplies 8,00,000
Salaries-Teaching 8,50,000
Research 1,20,000
Scholarships 80,000
Students Welfare expenses 38,000
Repairs & Maintenance 1,12,000
Games & Sports Expenses 50,000
Misc. Expenses 65,000
Research Fund Investments 8,00,000
Other Investments 18,50,000
Provident Fund Investment 5,10,000
Seminar & Conference Expenses 4,50,000
Consultancy Expenses 28,000
Land 1,00,000
Building 16,00,000
Plant and Machinery 8,50,000
Furniture and Fittings 6,00,000

By CMA, CS Rohan Nimbalkar 17

 Financial Statements of Not-For-Profit Organizations

Motor Vehicle 1,80,000

Provision for Depreciation
Building 4,80,000
Plant & Equipment 5,10,000
Furniture & Fittings 3,36,000
Cash at Bank 6,42,000
Library 3,60,000
1,03,85,000 1,03,85,000
Adjustments:

Sr. Particulars ₹
(1) Materials & Supplies consumed:
Teaching 50,000
Research 1,50,000
Students Welfare 75,000
Games or Sports 25,000
(2) Tuition fee receivable from Government for backward class Scholars 80,000
(3) Stores selling prices are fixed to give a net profit of 10% on selling price
(4) Depreciation is provided on straight line basis at the following rates:
(1) Building 5%
(2) Plant & Equipment 10%
(3) Furniture & Fixtures 10%
(4) Motor Vehicle 20%

SOLUTION
Republic College
Income and Expenditure Account for the year ending 31st March, 2016

Expenditure ₹ ₹ Income ₹ ₹
To Salaries: By Tuitions & other fee 8,80,000
Teaching 8,50,000 By Govt. Grants 5,00,000
Research 1,20,000
To Material & Supplies By Income from Investments 1,85,000
Consumed: By Hostel room Rent 1,75,000
Teaching 50,000 By Mess Receipts 2,00,000
Research 1,50,000 By Profit-Stores Sales 75,000
To Repairs & Maintenance 1,12,000 By Seminar and
Conferences
To Sports &Games Income 4,80,000
Expenses:
Cash 50,000 By Less : Expenses (4,50,000) 30,000
Materials 25,000 75,000 By Consultancy charges :

By CMA, CS Rohan Nimbalkar 18

 Financial Statements of Not-For-Profit Organizations

To Students Welfare Income 1,28,000

Expenses: 38,000
Cash Materials 75,000 1,13,000
Less : Expenses (28,000) 1,00,000
To Misc. Expenses 65,000 By Donations 50,000
To Scholarships 80,000
To Depreciation:
Building 80,000
Plant & Equipment 85,000
Furniture 60,000
Motor Vehicle 36,000
To Excess of Income over
Expenditure 3,19,000

21,95,000 21,95,000

Republic College
Balance Sheet as on 31st March, 2016

Liabilities ₹ ₹ Assets ₹ ₹
Fixed Assets:
Capital Fund Land 1,00,000
Opening balance Add: 16,06,000 Building Cost 16,00,000
Excess of Income Less: Depreciation (5,60,000) 10,40,000
over Expenditure 3,19,000 19,25,000 Equipment Cost 8,50,000
Other Funds Less: Depreciation (5,95,000) 2,55,000
Research Fund 8,00,000 Furniture & Fittings:
Building Fund 25,00,000 Cost 6,00,000
Less: Depreciation (3,96,000) 2,04,000
Current Liabilities : Motor Vehicles
Outstanding Expenses 2,25,000
Provident Fund 5,10,000 Cost : 1,80,000
Security Deposit 1,50,000 Less: Depreciation (36,000) 1,44,000
Library 3,60,000
Investments:
Capital Fund Investments 18,50,000
Research Fund Investment 8,00,000
P.F. Investment 5,10,000
Stock (stores)
Material & Supplies 1,25,000
Tuitionfeesreceivable 80,000
Cash in hand & at Bank 6,42,000

61,10,000 61,10,000

By CMA, CS Rohan Nimbalkar 19

 Financial Statements of Not-For-Profit Organizations

Working Notes :

₹ ₹
(1) Material & Supplies - Closing Stock
Opening Stock 3,00,000
Purchases 8,00,000
11,00,000
Less : Cost of Material & Supplies 6,75,000
Consumed 3,00,000 (9,75,000)
Balance 1,25,000
(2) Provisions for Depreciation
Building Plant & Furniture
Equipment & Fitting
₹ ₹ ₹
Opening Balance 4,80,000 5,10,000 3,36,000
Addition 80,000 85,000 60,000
Closing Balance 5,60,000 5,95,000 3,96,000
Note: Expense related to income earned like consultancy charges,
conference expenses are shown as net of income.

Question No. 9
Summary of receipts and payments of Bombay Medical Aid society organizations such as public hospitals, public
for the year ended 31.12.2016 are as follows:
Opening cash balance in hand ₹8,000, subscription ₹ 50,000, donation ₹ 15,000, (raised for meeting
revenue expenditure), interest on investments @ 9% p. a. ₹ 9000, payments for medicine supply ₹30,000
Honorarium to doctor ₹10,000, salaries ₹ 28,000, sundry expenses ₹ 1,000, equipment purchase ₹15,000,
charity show expenses ₹ 1,500, charity show collections ₹ 12,500.
Additional information:

Particulars 1.1.2016 31.12.2016

Subscription due 1,500 2,200
Subscription received in advance 1,200 700
Stock of medicine 10,000 15,000
Amount due for medicine supply 9,000 13,000
Value of equipment 21,000 30,000
Value of building 50,000 48,000
You are required to prepare receipts and payments account and income and expenditure account for the year
ended 31.12.2016 and balance sheet as on 31.12.2016.

By CMA, CS Rohan Nimbalkar 20

 Financial Statements of Not-For-Profit Organizations

Answer
Receipts and Payments Account of Bombay Medical Aid Society
for the year ended 31st December, 2016

Receipts ₹ Payments ₹
To Cash in hand (opening) 8,000 By Medicine supply 30,000
To Subscription 50,000 By Honorarium to doctors 10,000
To Donation 15,000 By Salaries 28,000
To Interest on investment 9,000 By Sundry expenses 1,000
To Charity show collections 12,500 By Purchase of equipment 15,000
By Charity show expenses 1,500
By Cash in hand (closing) 9,000
94,500 94,500

Income and Expenditure Account of Bombay Medical Aid Society

for the year ended 31st December, 2016
Expenditure ₹ Income ₹
To Medicine consumed To 29,000 By Subscription By 51,200
Honorarium to doctors 10,000 Donation 15,000
To Salaries 28,000 ByInterestoninvestments 9,000
To Sundryexpenses To 1,000 By Profit on charity show:
Depreciation on Show collections 12,500
Equipment Less: Show expenses (1,500) 11,000
6,000
Building 2,000
To Surplus-excess of income 8,000
over expenditure 10,200
86,200 86,200

Balance Sheet of Bombay Medical Aid Society as on 31st March, 2016

Liabilitie ₹ ₹ Asset ₹ ₹
Capital fund: Building 50,000
Opening balance 1,80,300 Less: Depreciation (2,000) 48,000
Add: Surplus 10,200 1,90,500 Equipment 21,000
Subscription received in advance 700 Add:- Purchase 15,000
36,000
Amount due for medicine supply 13,000 Less: Depreciation (6,000) 30,000
Stock of medicine 15,000
Investments 1,00,000
Subscription receivable 2,200
Cash in hand 9,000
2,04,200 2,04,200

By CMA, CS Rohan Nimbalkar 21

 Financial Statements of Not-For-Profit Organizations

Working Notes:
Subscription for the year ended 31st December, 2016: ₹
Subscription received during the year 50,000
Less: Subscription receivable on 1.1.2016 1,500
Less: Subscription received in advance on 31.12.2016 700 (2,200)
47,800
Add: Subscription receivable on 31.12.2016 2,200
Add: Subscription received in advance on 1.1.2016 1,200 3,400
51,200

Purchase of medicine:

Payment for medicine supply 30,000

Less: Amounts due for medicine supply on 1.1.2016 (9,000)
Add: Amounts due for medicine supply on 31.12.2016 21,000
Add: Amounts due for medicine supply on 31.12.2016 13,000
34,000

Medicine consumed:

Stock of medicine on 1.1.2016 10,000

Add: Purchase of medicine during the year 34,000
44,000
Less: Stock of medicine on 31.12.2016 (15,000)
29,000
Depreciation on equipment:

Value of equipment on 1.1.2016 21,000

Add: Purchase of equipment during the year 15,000

36,000
Less: Value of equipment on 31.12.2016 (30,000)
Depreciation on equipment for the year 6,000

Balance Sheet of Medical Aid Society as on 1st January, 2016

Liabilities Assets
Capital fund (balancing figure) 1,80,300 Building 50,000
Equipment 21,000
Subscription received in advance 1,200 Stock of medicine 10,000
Amount due for medicine supply 9,000 Investments (₹ 9,000 x 100/9) 1,00,000
Subscription receivable 1,500
Cash in hand 8,000
1,90,500 1,90,500

By CMA, CS Rohan Nimbalkar 22

 Financial Statements of Not-For-Profit Organizations

Question No. 10

On 31st December 2012, a club had subscription in arrears of ₹16,000 and in advance ₹4,000. During
the year ended 31-12-2013, the club received subscription of ₹2,08,000 of which ₹10,400 was related
to 2014. On 31st December 2012, there were 4 members who had not paid subscription for 2013 @ ₹
1,600 per person. Write up subscription A/c for the year 2013.

Solution:

A single subscription account should be prepared to reflect both advance and arrears figures. The
balancing figure will reflect the subscription amount that will be recognised as Income and transferred
to I & E A/c as shown below:

Subscription Account

Particulars Amount (₹) Particulars Amount (₹)

To, Balance b/d (arrears) 16,000 By, Balance b/d (advance) 4,000
To, I & E A/c (income for 2013) 1,92,000 By, R & P A/c (received) 2,08,000
To, Balance c/d (advance) 10,400 By, Balance c/d (arrears) 6,400

2,18,400 2,18,400

Question No. 11

The sports club of Orissa had received in 2012-2013 ₹ 2,000 towards subscription. Subscription for
2011-12 unpaid on 1.4.2012 were ₹ 200.
Subscriptions paid in advance on 31.3.2012 were ₹ 50 and the same on 31.3.2013 was ₹ 40.
Subscriptions for 2012-2013 unpaid on 31.3.2013 were ₹ 90.
Show how the subscriptions item will appear in the Income and Expenditure Account.

Solution:
Particulars Amount
(₹)
Subscriptions received during the year 2012-2013 2,000
Add : Subscription outstanding on 31.3.2013 90
2,090
Less : Subscription outstanding on 1.4.2012 200
1,890
Add : Subscription paid in advance on 31.3.2012 50
1,940
Less : Subscription received in advance on 31.3.2013 40
Subscription Income for 2012-2013 1,900

By CMA, CS Rohan Nimbalkar 23

 Financial Statements of Not-For-Profit Organizations

Question No. 12

The amount of Subscription appears in the Income and Expenditure Account of South Indian Club is
₹ 3,000.
Adjustments were made in respect of the following:
Subscription for 2012 unpaid at 1st Jan. 2013, ₹ 400; ₹ 200 of which was received in 2013.
Subscription paid in advance at 1.1.2013 ₹ 100.
Subscription paid in advance at 31.12.2013 ₹ 80.
Subscription for 2013 unpaid at 31.12.2013 ₹ 140.
Prepare Subscription Account.

Solution:
Subscription Account

Particula Amount Particula Amount

rs (₹) rs (₹)
To, Balance b/d 400 By, Balance b/d 100
3,000 3,040
To, Income & Expenditure A/c By, Cash Received (bal fig)
80 340
To, Balance (paid in advance to 2013) By, Balance c/d
[200 + 140]
3,480 3,480
To, Balance b/d: By, Balance b/d (2013) 80
For 2012 200
For 2013 140

Question No. 13

From the following information, prepare the Subscription Account for the year ending on March, 31,
2013
(i) Subscription in arrears on 31.03.2012 ₹ 1,500
(ii) Subscription received in advance on 31.03.2012 ₹ 1,000
(iii) Amount of Subscription received during 2012-13 ₹ 40,000, which includes ₹ 500 for the
year 2011-12, ₹ 1,500 for the year 2013-14.
(iv) Subscription outstanding ₹ 1,000.

Solution:
Subscription Account

Particulars Amount (₹) Particulars Amount (₹)

To, Balance b/d 1,500 By, Balance b/d 1,000
To, Income & Expenditure A/c 39,500 By, Bank A/c 40,000
By, Balance c/d
To, Balance c/d
1,500 For 2011-12 500
For 2013-14
For 2012-13 1,000

42,500 42,500

By CMA, CS Rohan Nimbalkar 24

 Financial Statements of Not-For-Profit Organizations

Question No. 14

The accumulated balance of Life Membership fees at the beginning of the year 2012 was ₹6,40,000. This
represents the balance of life membership fees paid by 20 members since the club started about 6 years
ago. In the current year, 10 new life memberships were received totaling ₹ 4,00,000.
It’s the policy of the club to spread these fees over 20 years to income. The amount payable per person
is always ₹ 40,000.
What is the amount to be recognised as income for the current year and what amount will be deferred
through the balance sheet?

Solution:
Income to be recognised for new members

Life membership fees per person ₹40,000

Income to be spread over 20 years
Income to be recognised each year ₹2,000
Members added during the year 10
Income to be recognised (10×2000) ₹20,000
Amount to be carried forward ₹3,80,000

Income to be recognised for old members

No. of members 20
Income to be recognised each year ₹2,000
Income to be recognised (20×2000) ₹40,000
Total income to be recognised (20,000+40,000) ₹60,000

Amount to be shown in the balance sheet

Accumulated Balance ₹6,40,000

Add: New fees received ₹4,00,000
Less: Recognised as income (₹60,000)
Balance to be carried forward ₹9,80,000

By CMA, CS Rohan Nimbalkar 25

 Financial Statements of Not-For-Profit Organizations

Question No. 15

The following summary of the Cash Book has been prepared by the treasurer of a club:

Receipts Amount Payments Amount

(₹) (₹)
To Balance b/d 4,740 By Wages - outdoor staff 13,380
To Subscriptions 29,720 By Restaurant Purchase 50,400
To Entrance Fees 3,200 By Rent - 18 months’ to July 30, 7,500
To Restaurant Receipts 56,800 2013
To Games & Competition Receipts 13,640 By Rates 2,700
To Due to Secretary for Petty Expenses 80 By Secretary’s Salary 3,120
By Lighting 7,200
By Competition Prizes 4,000
By Printing & Postage etc. 6,000
By Placed in Fixed Deposit 8,000
By Balance c/d 5,880

1,08,180 1,08,180

On April 1, 2012 the club’s assets were:- Furniture ₹ 48,000, Restaurant stock ₹ 2,600; Stock of prizes ₹
800; ₹ 5,200 was owing for supplies to the restaurant.
On March, 31, 2013, the Restaurant stocks were ₹ 3,000 and prizes in hand were ₹ 500, while the club
owed ₹ 5,600 for restaurant supplies.
It was also found that subscriptions unpaid at March 31, 2013, amounted to ₹ 1,000 and that the figure
of ₹ 29,720
shown in the Cash Book included ₹ 700 in respect of previous year and ₹ 400 paid in advance for the
following year.
Prepare an account showing the Profit or Loss made on the Restaurant and a General Income and
Expenditure Account for the year ended 31.3.2013, together with a Balance Sheet as at that date, after
writing 10% off the Furniture.

Restaurant Trading Account For the year ended 31st March, 2013

Particulars Amount Amount Particulars Amount Amount

(₹) (₹) (₹) (₹)
To Opening Stock A/c 2,600 By Restaurant Receipts A/c 56,800
” Purchases A/c 50,400 ” Closing Stock A/c 3,000
” Add: Outstanding for 31.3.13 5,600
56,000
Less: Outstanding for 01.04.12 5,200
50,800
” Income & Expenditure A/c 6,400
(G.P. transferred)

59,800 59,800

By CMA, CS Rohan Nimbalkar 26

 Financial Statements of Not-For-Profit Organizations

Balance Sheet as at 1st April, 2012

Liabilities Amount Assets Amount

(₹) (₹)
Accumulated Fund: (bal. fig.) 50,390 Furniture and Equipment 48,000
Owing for supplies to Restaurant 5,200 Restaurant Stock 2,600
Outstanding Rent (Jan. to March 2012) 1,250 Stock of Prize 800
Outstanding Subscriptions 700
Cash and Bank 4,740
56,840 56,840

Income and Expenditure Account

For the year ended 31st March, 2013

Expenditure Amount Amount Income Amount Amount

To Wages 13,380 By Subscription :

Subscription already received 29,720
To Rent 7,500 Less: Outstanding for 1.4.12 700
To Less: Outstanding on 1.4.2012 1,250 29,020
6,250 Add: Outstanding for 2013 1,000
To Less: Prepaid for 3 months 30,020
(7,500 x3/18) 1,250 5,000
To Rates 2,700 Less: Received in advance 400 29,620
To Secretary’s Salary 3,120 By Games Competition Receipts 13,640
To Lighting, Cleaning, Services 7,200 By RestaurantTrading–
Gross Profit 6,400
To Competition Prize 4,000
To Add: Opening Stock 800
4,800
To Less: Closing Stock 500 4,300
To Printing, Postage and Sundries 6,000
To Dep. on Furniture and 4,800
Equipment @10%
To Surplus – Excess of income over 3,160
expenditure
49,660 49,660

By CMA, CS Rohan Nimbalkar 27

 Financial Statements of Not-For-Profit Organizations

Balance Sheet as at 31st March, 2013

Liabilities Amount Amount Assets Amount Amount

(₹) (₹) (₹) (₹)
Accumulated Fund: Furniture and Equipment 48,000
Balance on 1.4.2012 50,390 Less: Depreciation 4,800 43,200
Add: Surplus 3,160 53,550 Restaurant Stock 3,000
Entrance fees 3,200 Stock of Prize 500
Subscription received in advance 400 Outstanding Subscriptions 1,000
Owing for supplies to Restaurant 5,600 Prepaid Rent 1,250
Outstanding Petty Expenses 80 Fixed Deposit with Bank 8,000
Cash and Bank 5,880
62,830 62,830

Question No. 16

‘Citizen Club’ was registered in a city and the accountant prepared the following Receipts and Payments
Account for the year ended Dec. 31, 2013 and showed a deficit of ₹ 14,520 :

(₹)
Receipts:
Subscriptions 62,130
Fair Receipts 7,200
Variety Show Receipts (net) 12,810
Interest 690
Bar Collection 22,350
Cash spent more 1,000
1,06,180
Payments: (₹)
Premises 30,000
Honorarium to Secretary 12,000
Rent 2,400
Rates and Taxes 3,780
Printing and Stationery 1,410
Sundry Expenses 5,350
Wages 2,520
Fair Expenses 7,170
Bar Purchase- payments 17,310
Repairs 960
New Car (less proceeds of old car ₹ 9,000) 37,800
1,20,700
Deficit 14,520

By CMA, CS Rohan Nimbalkar 28

 Financial Statements of Not-For-Profit Organizations

The additional information should be obtained:

1.1.2013 31.12.2013
(₹) (₹)
Cash in hand 450 -
Bank balance as per Pass Book 24690 10,440
Cheques issued not presented for Sundry Expenses 270 90
Subscriptions due 3,600 2,940
Premises at Cost 87,000 1,17,000
Accumulated dep. on Premises 56,400 -
Car at Cost 36,570 46,800
Accumulated dep. on Car 30,870 -
Bar Stock 2,130 2,610
Creditors for Bar Purchases 1,770 1,290

Cash overspent represents honorarium to secretary not withdrawn due to Cash deficit. His annual
honorarium is ₹ 12,000. Depreciation on premises and car is to be provided at 5% and 20% on written-
down value.
You are required to prepare the correct Receipts and Payments Account, Income and Expenditure
Account and Balance Sheet as at Dec. 31, 2013.

Solution:

In the Books of Citizen Club Receipts and Payments Account

for the year ended 31st December, 2013

Receipts Amount Payments Amount

(₹) (₹)
To Balance b/d 450 By, Premises 30,000
” Bank (24,690 – 270) 24,420 ” Honorarium to Secretary 11,000
” Subscription 62,130 ” Rent 2,400
” Fair Receipts 7,200 ” Rates and Taxes 3,780
” Variety Show Receipts 12,810 ” Printing and Stationery 1,410
” Interest 690 ” Sundry Expenses 5,350
” Bar Receipts 22,350 ” Wages 2,520
” Fair Expenses 7,170
” Bar Purchases 17,310
” Repairs 960
” New Car 37,800
” Bank Balance (10,440 – 90) 10,350
1,30,050 1,30,050

By CMA, CS Rohan Nimbalkar 29

 Financial Statements of Not-For-Profit Organizations

Income and Expenditure Account

for the year ended 31st December, 2013

Expenditure Amount Amount Incom Amount Amount

(₹) (₹) e (₹) (₹)
To Honorarium to Secretary 11,000 By, Subscriptions 62,130
Add: Outstanding 1,000 12,000 Add: Outstanding for 2012 2,940
” Rent 2,400 65,070
” Rates and Taxes 3,780 Less: Outstanding for 3,600 61,470
” Printing andStationery 1,410 2011 ” Fair receipts 7,200
” Sundry Expenses 5,350 ” Varietyshow 12,810
” Wages 2,520 receipts ” Interest 690
” Fair Expenses 7,170 3,300
” Profit on sale of old car
”Repairs 960 [(₹ 9,000 - (36,570 - 30,870)] 6,000
”Depreciation on: ” Profit on Bar Trading
Premises@ 5% on 60,600 3,030
Car @20% on 46,800 9,360
” Surplus—Excess ofIncome 43,490
over Expenditure

91,470 91,470

Balance Sheet

as at 31st December, 2013

Liabilities Amount Amount Assets Amount Amount

(₹) (₹) (₹) (₹)
Capital Fund as on 1.1.13 65,130 Premises at Cost Less: 1,17,000
Add: Surplus 43,490 1,08,620 Depreciation Car at Cost 59,430 57,570
Creditors(forbarpurchase) 1,290 Less: Depreciation Bar 46,800
37,440
Secretary’s honorarium Stock 9,360
1,000 2,610
outstanding Outstanding Subscription
2,940
Cash at bank
10,350
1,10,910 1,10,910

Balance Sheet

as at 1st January, 2013

Liabilities Amount Amount Assets Amount Amount (₹)

(₹) (₹) (₹)
Capital Fund (bal. in figure) 65,130 Premises at Cost 87,000
Creditors(forbarpurchase) 1,770 Less: Depreciation 56,400 30,600
Car at Cost 36,570
5,700
30,870

By CMA, CS Rohan Nimbalkar 30

 Financial Statements of Not-For-Profit Organizations

Less: Depreciation 2,130

Bar Stock 3,600
Outstanding 24,420
Subscription Cash at 450
bank
Cash in Hand
66,900 66,900

Bar Trading Account for the year ended 31.12.2013

Particulars Amount Amount Particulars Amount

(₹) (₹) (₹)
To, Opening stock To, Bar 2,130 By, Bar Receipts By, 22,350
Purchase 17,310 Closing Stock 2,610
Add: closing creditors for bar 1,290
purchase 18,600
Less: Opening creditors for purchase
1,770
16,830
To, Income and Expenditure A/c
6,000
(Gross profit Transferred)

24,960 24,960

2. Calculation of Depreciation of Premises

W.D.V ₹
Cost Price 87,000
Less: Accumulated Dep 56,400
30,600
Add: Purchase 30,000
60,600
Depreciation of Premises: 60,600 x 5% = 3,030

By CMA, CS Rohan Nimbalkar 31

 Financial Statements of Not-For-Profit Organizations

Question No. 17

Prepare Income & Expenditure A/c for the year ended 31-12-2013 and the balance sheet as on 31-12-
2013 in the books of an Education society.

Particulars Debit (₹) Credit (₹)

Library Books 2,30,000
Books Added during the year 52,200
Furniture 1,59,500
Addition to Furniture 35,500
Buildings 37,89,000
Investment 21,25,000
Creditors 1,77,900
Debtors 59,700
Investment Reserve Fund 1,85,000
Entrance Fees 2,02,600
Examination Fees 32,500
Certificate Fees 7,800
Subscriptions Received 2,75,800
Hire Charges 95,500
Interest 85,000
Other Receipts 4,400
Salary 1,55,900
Printing & Stationery 8,500
Postage & Telephone 2,500
Insurance 10,400
Examination Expenses 24,000
Periodicals 15,600
Prizes Fund 2,15,000
Prizes Investments 2,10,400
Prizes Investment Income 10,200
Prizes Given 9,500
Prizes Bank Balance 2,450
Donations (capital) 1,99,000
General Expenses 5,250
Capital Fund 54,71,720
Bank Balance 65,500
Cash in Hand 1,520
Total 69,62,420 69,62,420
Additional information:

Subscription receivable ₹22,500, subscription received for 2014 ₹7,850, Interest accrued on
investments ₹6,250, salary outstanding for 2013 ₹12,500, Prepaid insurance ₹4,500.
Depreciate Books @ 15%, Building @ 1% and Furniture @ 10%.

By CMA, CS Rohan Nimbalkar 32

 Financial Statements of Not-For-Profit Organizations

Solution:
Income & Expenditure Account for the year ended 31.12.2013

Expenditure Amount (₹) Amount (₹) Income Amount (₹) Amount (₹)
To Salary 1,55,900 By Examination fees 32,500
Add: Outstanding 12,500 1,68,400 By Certificate fees 7,800
To Printing & Stationery 8,500 By Subscriptions 2,75,800
To Postage & Telephone 2,500 Add: Receivable 22,500
To Insurance 10,400 Less: Pre-received (7,850) 2,90,450
Less: Prepaid (4,500) 5,900 By Hire charges 95,500
To Examination Expenses 24,000 By Interest 85,000
To Periodicals 15,600 By Other Receipts 4,400
To General Expenses 5,250 By Accrued interest 6,250
To Depreciation on Books 38,415
To Depreciation on Building 37,890
To Depreciation on
Furniture 17,725
To Surplus 1,97,720
5,21,900 5,21,900

Balance Sheet as at 31.12.2013

Liabilities Amount Amount Assets Amount Amount

(₹) (₹) (₹) (₹)
Buildings 37,89,000
Less: Depreciation @ 1% (37,890) 37,51,110
Capital Fund 54,71,720 Library Books 2,30,000
Add: Entrance fees 2,02,600 Add: Purchased in 2012 52,200
Add: Donations 1,99,000 Less: depreciation @ 15% (38,415) 2,43,785
Add: Surplus 1,97,720 60,71,040 Furniture & fixture 1,59,500
Add: Purchased in 2012 35,500
Less: Depreciation @ 10% (17,725) 1,77,275
Investment Reserve Fund 1,85,000
Prize Fund 2,15,000 Investment 21,25,000
Add: Fund Income 10,200 Prize Investments 2,10,400
Less: Fund Expenses (9,500) 2,15,700 Debtors 59,700
Creditors 1,77,900 Prize Bank balance 2,450
Subscription received in 7,850 Bank balance 65,500
advance
Salary Outstanding 12,500 Cash in hand 1,520
Subscription receivable 22,500
Interest Accrued 6,250
Prepaid Insurance 4,500
66,69,990 66,69,990

By CMA, CS Rohan Nimbalkar 33

 Financial Statements of Not-For-Profit Organizations

Question No. 18

From the following Receipts and Payments account prepare an Income and Expenditure account for
the year ended 31.12.2016
Receipts and Payments Account for the year ended 31.12.2016

Receipts ₹ Payments ₹

To Balance b/d By Purchase of furniture 10,000

: Cash in hand 1,200 By Rent 3,600
: Cash at Bank 3,400 By Honourarium 4,000
To Subscriptions 24,500 By Salaries 2,100
To Entrance fees 3,000 By Sports expenses 4,700
By Sundry expenses 1,100
By Printing and Stationery 800
By Balance c/d
: Cash in hand 1,700
: Cash at Bank 4,100

32,100 32,100

Additional information:

Particulars 31.12.2015 31.12.2016

₹ ₹
Subscription due 2,100 3,200
Subscriptions received in advance 1,400 2,700
Rent outstanding 600 300
Salaries paid in advance 1,200 900
Furniture 18,000 23,000
60 % of the entrance fees are to be capitalized. Interest on savings bank account for ₹ 280 has not
been entered in the cash book. An old furniture (WDV ₹ 8,000) was exchanged at an agreed price of
₹ 5,000 for a new furniture costing ₹ 15,000.

Solution:
Income and Expenditure Account for the year ended 31.12.2016

Expenditure ₹ Income ₹
To Rent 3,300 By Subscriptions 24,300
To Honourarium 4,000 By Entrance fees (3000 × 40%) 1,200
To Salaries 2,400 By Interest 280
To Sports expenses 4,700
To Sundry expenses 1,100
To Printing and stationery 800
To Loss on exchange of furniture 3,000
To Depreciation on furniture 2,000
To Surplus 4,480
25,780 25,780

By CMA, CS Rohan Nimbalkar 34

 Financial Statements of Not-For-Profit Organizations

Note
: Subscription
`
1.
Subscription 24,500
Add: due for 2016 3,200
Add : advance for 2015 1,400
Less : advance for 2016 2,700
Less : due for 2015 2,100
Transfer to income and expenditure 24,300
A/c

2. Salaries
Salaries 2,100
Add : advance for 2015 1,200
Less : advance for 2016 900
Transfer to income and expenditure 2,400
A/c

3. Rent
Rent 3,600
Add: due for 2016 300
Less : due for 2015 600
Transfer to income and expenditure 3,300
A/c

4. Loss on exchange of furniture

WDV of furniture 8,000
Less : agreed price of exchange 5,000
Loss transferred to I & E A/c 3,000
5. Depreciation on
furniture

Particulars ₹ Particulars ₹
To Balance b/d 18,000 By Creditors 5,000
To Creditors 15,000 By Loss on Exchange 3,000
By Balance c/d 23,000
By Depreciation 2,000
33000 33000

By CMA, CS Rohan Nimbalkar 35

 Financial Statements of Not-For-Profit Organizations

Question No. 19

The following information was obtained from the books of Young Bengal Club as on 31-03-2013 at the
end of first year of the club. Prepare the Receipts & Payments A/c, Income & Expenditure A/c and
Balance sheet of the club
(1) Donations received for Building & Books - ₹ 2,00,000
(2) Other revenue incomes and receipts were:
Rev. Income (₹) Actual Receipts (₹)
Entrance fees 17,000 17,000
Subscription 20,000 19,000
Locker rent 600 600
Sundry Income 1,600 1,060
Refreshment account Nil 16,000

(3) Other revenue expenditure and actual payments were

Rev. Exp (₹) Actual Payment (₹)

Land (cost ₹10,000) Nil 10,000
Furniture (cost ₹ 146,000) Nil 130,000
Salaries 5,000 4,800
Maintenance of play ground 2,000 1,000
Rent 8,000 8,000
Refreshment account Nil 8,000

Donations were utilized to the extent of ₹25,000 for buying books, balance were unutilized. In order
to keep it safe, 9% Govt. Securities were purchased on 31-3-2013 for ₹1, 60,000. Remaining amount
was put in bank as term deposit on 31-3-2013. Depreciate Furniture and books @ 10% for the whole
year.

Solution:
Receipt and Payments for the year ended 31.3.2013

Receipt Amount (₹) Paymen Amount (₹)

s ts
To Donations 2,00,000 By Library books 25,000
To Entrance fees 17,000 By Land 10,000
To Subscription 19,000 By Furniture 1,30,000
To Locker Rent 600 By Salaries 4,800
To Sundry income 1,060 By Maintenance 1,000
To Refreshment A/c 16,000 By Rent 8,000
By Refreshment A/c 8,000
To Balance c/d (Overdraft) (Bal. fig.) 1,08,140 By 9% Govt. Securities 1,60,000
By Term deposits 15,000
3,61,800 3,61,800

By CMA, CS Rohan Nimbalkar 36

 Financial Statements of Not-For-Profit Organizations

Income and Expenditure Account for the year ended 31.3.2013

Expenditures ₹ ₹ Income ₹ ₹
s
To Salary 4,800 By Subscriptions 19,000
Add: Outstanding 200 5,000 Add: Outstanding 1,000 20,000
₹₹ Playground maintenance 1,000 ₹₹ Locker Rent 600
1,000 2,000 1,060
Add: Outstanding ₹₹ Sundry Income
8,000 540 1,600
₹₹ Rent -Add: Outstanding
8,000
₹₹ Depreciation ₹₹ Profit on Refreshment
14,600
on: Furniture 2,500 17,100 ₹₹ Deficit
Library Books (Excess of Expenditure over 1,900
Income)
40,100 40,100

Balance Sheet as at 31st March 2013

Liabiliti ₹ ₹ Asset ₹ ₹
es s
Capital Fund --- Land 10,000
Entrance Fees 17,000 Furniture 1,46,000
Donation for Building. Less: Depreciation 14,600 1,31,400
Library
Room Fund 2,00,000 Library Books 25,000
Creditors for Furniture 16,000 Less: Depreciation 2,500 22,500
Outstanding Salaries 200 9% Govt. Bond 1,60,000
Outstanding Expenses for Subscription 1,000
Playground
1,000 Receivable Accrued 540
Sundry Income
Bank Term Deposit 15,000
Bank overdraft 1,08,140
Deficit 1,900
3,42,340 3,42,340

Workings:

(1) Refreshment Account

Particulars Amount Particulars Amount

(₹) (₹)
To, Payment for Refreshment 8,000 By, Refreshment Receipts 16,000
To, Income and Expenditure A/c
8,000
(Profit on Refreshment)
16,000 16,000

By CMA, CS Rohan Nimbalkar 37

 Financial Statements of Not-For-Profit Organizations

(2) Calculation of Term Deposit:

Donation Recd – (library books purchase + 9% Govt. Securities)
= 2,00,000 – (25,000 + 1,60,000)
= 2,00,000 – 1,85,000
=15,000
(3) Since there was no capital fund
(4) Donation received for Building and Library Room is treated as capital item.
(5) Since the investment in Govt. Securities has been made at the closing date of the year, no
interest has accrued.

Question No. 20

Following is the receipt and payment A/c of a club for the year ended 31-03-2013
Dr. Receipt and Payments for the year ended 31.3.2013 Cr.

Receipts Amount (₹) Payments Amount (₹)

To Opening balance: By Administrative expenses 1,25,000
Cash 3,000 “ Programme expenses 2,75,000
Bank 7,000 “ F.D. with bank 1,25,000
“ Membership fees received: “ Investment in ICICI Bonds 3,00,000
“ Fixed assets purchased 80,000
up to 31-03-2012 14,000
for 2012-13 1,50,000
for 2013-14 16,000

“ Advertisements 5,00,000
“ F.D. with bank 75,000
“ Interest on savings A/c 700
“ Interest on F.D 22,000
“ Sale of tickets - Programmed 25,000 “ Closing balance:
“ Govt. Security Maturity Cash 2,700
(cost 80,000 & interest 8,000) 1,00,000 Bank 5,000
9,12,700 9,12,700

The club informs you that:

(a) Membership fee for 2012-13 due is ₹25,000; and ₹1,000 from a member who has not yet
paid for 2011-12 as well. A provision needs to be done on this.
(b) Income receivable on 31-03-2013 on ICICI bond is ₹30,000 and on Govt. Securities is
₹24,000
(c) Prepaid expenses on 31-3-2013 amounts to ₹7,000
(d) Outstanding expenses as on 31-3-2013 ₹8,000
(e) Depreciation to be provided is ₹12,500
(f) Programme is an annual feature.

The Balance Sheet as on 31-3-2012 is also provided as below:

By CMA, CS Rohan Nimbalkar 38

 Financial Statements of Not-For-Profit Organizations

Balance Sheet as at 31.03.2012

Liabilities Amount Assets Amount

Trust fund (₹)
5,00,000 Cash (₹)
3,000
Accumulated surplus 1,05,000 Bank Account 7,000
Subscriptions in advance 10,000 Fixed Deposit 2,00,000
Outstanding Expenses 10,000 Govt. Securities 3,00,000
Fixed Assets 95,000
Subscription receivable 15,000
Prepaid expenses 5,000
6,25,000 6,25,000

Prepare Income and Expenditure Account and the Closing Balance Sheet for the year 2012-13.

Solution:
Subscription Account

Particulars Amount (₹) Particulars Amount (₹)

To, Opening receivable 15,000 By, Opening advance received By, 10,000
To, I & E A/c (balancing 1,85,000 Received during year 1,80,000
figure) By, Closing receivable :
16,000 1,000
To, Closing advance received for 2011-12
25,000
for 2012-13
2,16,000 2,16,000

Expenses Account

Particulars Amount (₹) Particulars Amount (₹)

To, Opening prepaid 5,000 By, Opening outstanding 10,000
To, Bank 1,25,000 By, I & E A/c (balancing figure) 1,21,000
To, Closing outstanding 8,000 By, Closing prepaid 7,000
1,38,000 1,38,000

Provision for doubtful Subscriptions Account

Particulars Amount (₹) Particulars Amount (₹)

For 2011-12 1,000 By Balance c/d 2,000
For 2012-13 1,000
2,000 2,000

By CMA, CS Rohan Nimbalkar 39

 Financial Statements of Not-For-Profit Organizations

Income & Expenditure Account for the year ended 31.3.2013

Expenditures ₹ Incomes ₹
To Administrative Expenses ” 1,21,000 By Subscriptions 1,85,000
Depreciation on Assets ” 12,500 ” Interest Income 84,700
Provision on subscription 2,000 [700+22,000+30,000+24,000+8,000]
2,50,000
” Surplus 3,96,200 ” Surplus from Programme
[25,000 + 5,00,000 – 2,75,000]
” Profit on sale of investment 12,000
5,31,700 5,31,700

Balance Sheet as at 31st March 2013

Liabiliti Amou Amou Asset Amou Amou

es nt nt s nt nt
(₹) (₹) (₹) (₹)
Trust Fund 5,00,000 Cash 2,700
Accumulated surplus 1,05,000 Bank 5,000
Add: surplus for 2012-13 3,96,200 5,01,200 Govt. Securities 3,00,000
Subscription Recd in Less: sold 80,000 2,20,000
Advance 16,000 Fixed Deposit 2,00,000
Outstanding Expenses 8,000 Add: Addition 1,25,000
3,25,000
Less: Matured 75,000 2,50,000
ICICI Bond 3,00,000
Accrued Interest:
Govt. Securities 24,000
ICICI Bonds 30,000 54,000
Outstanding Subscription:
2011 -12 1,000
2012 -13 25,000
26,000
Less: Prov. for doubtful debt 2,000 24,000
Prepaid Expenses 7,000
Fixed Assets 95,000
Add: Additions 80,000
1,75,000
Less: Depreciation 12,500 1,62,500
10,25,200 10,25,200

Profit on disposal of Investment ₹

Amount received 1,00,000
Less: Interest 8,000
Net received 92,000
Cost of disposed investment 80,000
Profit on disposal 12,000

By CMA, CS Rohan Nimbalkar 40

 Financial Statements of Not-For-Profit Organizations

Question No. 21

Prepare the Balance Sheet of Ocean Blue club based on following information:
₹ ₹
Furniture (before depreciation) 8,000 Outstanding consultancy 1,000
Depreciation on furniture 800 Allowances outstanding 800
Building fund 30,000 Capital Grants 10,000
Income from building fund 2,000 Entrance fees (50% be 4,000
Fixed deposits 20,000 funded)
Legacies received(funded) 8,000
Opening General fund 10,000 Prize fund 10,000
Excess of income over 20,000 Income of prize fund 1,000
expenditure
Opening balance of capital fund 60,000 Expenses of prize fund 800
Cost of swimming pool 40,000 Investment of prize fund 10,000
Equipments 20,000 Balance in current A/c 10,000
Investment of general fund 36,000 Cash in hand 800
Subscription outstanding 10,000
Solution:
Balance Sheet as at ...............

Liabilitie Amount (₹) Amount (₹) Assets Amount (₹) Amount (₹)
s
Capital Fund Fixed Assets:
Op balance 60,000 40,000
Swimming Pool
Add: Capital grants 10,000 20,000
Equipments 8,000
8,000
Add: Legacies Furniture 800 7,200
2,000 80,000
Add: Entrance fees (50%) Less: Depreciation
General Fund Op 10,000 Investment 36,000
balance Surplus 20,000 30,000 General fund Prize 10,000 46,000
Building Fund fund Receivables
30,000 10,000
Op balance Add: Subscription
2,000 32,000 Cash & bank
Income 800
Cash in hand 10,000
Prize Fund
Current A/c 20,000 30,800
Op balance 10,000 Fixed deposit
Add: Income 1,000
Less: Expenses 800 10,200

Allowances
Outstanding 800
Consultancy
1,000
Outstanding
1,54,000 1,54,000

By CMA, CS Rohan Nimbalkar 41

 Financial Statements of Not-For-Profit Organizations

Question No. 22

The following are the items of Receipts and Payments of the Bengal Club as summarized from the books
of account maintained by the Secretary:
Receipts Amount Payments Amount
(₹) (₹)
Opening Balance 1.1.2013 4,200 Manager’s Salary 1,000
Entrance Fees 2012 1,000 Printing and Stationery 2,600
Do 2013 10,000 Advertising 1,800
Subscriptions 2012 600 Fire Insurance 1,200
Do 2013 15,000 Investments Purchased 20,000
Interest Received on Investments 3,000 Closing Balance 31.12.2013 7,600
Subscriptions 2014 400

34,200 34,200

It was ascertained from enquiry that the following represented a fair picture of the Income and
Expenditure of the Club for the year 2013 for audit purpose:

Expenditure Amount Amount Income Amount

(₹) (₹) (₹)
Manager’s Salary 1,500 Entrance Fees 10,500
Printing & Stationery 2,000 Subscription 15,600
Add: Accrued 400 2,400 Interest on Investments 4,000
Advertising (accrued Nil) 1,600
Audit Fees 500
Fire Insurance 1,000
Depreciation 4,940
Excess of Income over Expenditure 18,160

30,100 30,100

You are required to prepare the Balance Sheet of the Club as on 31.12.2012 and 31.12.2013, it being
given that the values of the Fixed Assets as on 31.12.2012 were: Building ₹ 44,000, Cricket Equipment ₹
25,000 and Furniture ₹ 4,000. The rates of depreciation are Building 5%, Cricket Equipments 10%,
Furniture 6%.
Your are entitled to make assumptions as may be justified.

By CMA, CS Rohan Nimbalkar 42

 Financial Statements of Not-For-Profit Organizations

Solution:
In the books of Bengal Club

Balance Sheet as at 31st December, 2012

Liabilities Amoun Assets Amount

t (₹) (₹)
Outstanding Liabilities: Building 44,000
Advertisement (1,800 – 1,600) 200 Furniture 4,000
Printing and Stationery (2,600 – 2,000) 600 Cricket Equipment 25,000
Capital Fund 78,000 EntranceFeesinarrear 1,000
(Balancing figure) Subscription in arrear 600
Cash 4,200
78,800 78,800

Balance Sheet as at 31st December, 2013

Liabilities Amount Amount Assets Amount Amount

(₹) (₹) (₹) (₹)
Capital Fund: Building 44,000
Balance on 1.1.2012 78,000 Less: Depreciation 5% 2,200 41,800
Add: Excess of Income
18,160 96,160 Furniture 4,000
over Expenditure
400 Less:Depreciation6% 240 3,760
Subscription Received in Advance
Outstanding Liabilities: 25,000
400 Cricket Equipment
Printing and Stationery 500 Less:Depreciation10% 2,500 22,500
Manager’s Salary: (1,500 – 1,000) 500 Investments 20,000
Audit Fees
Subscriptions in arrear
(15,600 – 15,000) 600
EntranceFeesinarrear
(10,500 – 10,000)
Accrued Interest on 500
Investments
(4,000 – 3,000) 1,000
Prepaid Insurance
200
(1,200 – 1,000)
Cash 7,600
97,960 97,960

Note: AdvertisementexpensesandPrintingandStationerywhichwerepaidinexcessoverIncomeandExpenditure A/c

are assumed to be outstanding for the previous year

By CMA, CS Rohan Nimbalkar 43

 Financial Statements of Not-For-Profit Organizations

Question No. 23

The Income and Expenditure Account of the Calcutta Club is:

Income and Expenditure Account for the year ended 31st December, 2013

Dr. Cr.

Expenditure Amount Income Amount

₹ ₹
To Salaries 1,750 By Subscription 2,000
To General Expenses 500 By Donation 1,050
To Depreciation 300
To Excess of Income over expenditure 500
3,050 3,050

Adjustments are made in respect of the following:

(1) Subscription for 2012 unpaid at 1.1.2013 ₹ 200; ₹ 180 of which was received in 2013.
(2) Subscription paid in advance at 1.1.2013 ₹ 50.
(3) Subscription paid in advance at 31.12.2013 ₹ 40.
(4) Subscription for 2012 unpaid at 31.12.2013 ₹ 70.
(5) Sundry Asset at the beginning of the period ₹ 2,600; Sundry Asset after depreciation ₹ 2,700
at the end of the period.
(6) Cash balance at 1.1.2013 ₹ 160.

Prepare a Receipts and Payments Account.

Solution:
In the books of Calcutta Club Receipts and Payments Account

for the year ended 31st December, 2013

Receipts Amount Payments Amount

₹ ₹
To Balance b/d 160 By Salaries 1,750
,, Donations 1,050 ,, General Expenses 500
,, Subscriptions (Cash received) 2,100 ,, Sundry Assets 400
,, Balance c/d 660
3,310 3,310

Workings:

Subscription Account

Particulars Amount Particulars Amount

₹ ₹
To Balance b/d 200 By balance b/d 50
2,000 ,, Cash Received (bal. fig.) 2,100

By CMA, CS Rohan Nimbalkar 44

 Financial Statements of Not-For-Profit Organizations

,, Income & Expenditure A/c 40 ,, Balance (Unpaid for 2012) 20

,, Balance (received in advance for (200 - 180)c/d
2014) ,, Balance (Unpaid for 2013) c/d 70
2,240 2,240
By Balance b/d 40
To Balance b/d
20
for 2012
70
for 2013

Sundry Assets Account

Particulars Amount Particulars Amount

₹ ₹
To Balance b/d 2,600 By Depreciation By 300
,, Purchase (bal. fig.) 400 Balance c/d 2,700
3,000 3,000

By CMA, CS Rohan Nimbalkar 45