Please solve this and tell the treatment of all the entries
Solution:
Working Notes:
(1) COMPUTATION OF CAPITAL FUND
(2) COMPUTATION OF CURRENT YEAR OUTSTANDING SUBSCRIPTION
Current Year Subscription To Be Received = Rs.500 * 50 = Rs.25,000
Subscription Actually Received = Rs.20,000
Current Year Outstanding Subscription = Rs.5,000
| Expenditure | Amount (Rs.) | Income | Amount (Rs.) |
| To Salaries 28,000 | By Subscription 20,000 | ||
| Add: Current Year o/s 2,000 | Add: Current Year o/s 5,000 | 25,000 | |
| Less: Previous Year o/s (6,000) | 24,000 | By Hire of Ground | 14,000 |
| To General Expenses | 6,000 | By Surplus From Entertainment Event | 8,000 |
| To Electricity Charges | 4,000 | By Sale of Old Newspapers | 2,000 |
| To Newspapers | 8,000 | ||
| To Depreciation on Furniture (20,000 * 10%) | 2,000 | ||
| To Excess of Income & Expenditure( Surplus) | 5,000 | ||
| Total | 49,000 | Total | 49,000 |
| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
| Capital Fund (W.N.1) 2,47,000 | Building | 2,00,000 | |
| Add: Surplus 5,000 | 2,52,000 | Furniture 20,000 | |
| Salaries Outstanding | 2,000 | Less: Depreciation (2,000) | 18,000 |
| Subscription Received In Advance | 4,000 | Books 20,000 | |
| Add: Purchases 10,000 | 30,000 | ||
| Cash/Bank Balance | 4,000 | ||
| Subscription Outstanding | |||
| 2020-21 (6,000 - 5,000) 1,000 | |||
| 2021-22 5,000 | 6,000 | ||
| Total | 2,58,000 | Total | 2,58,000 |
Working Notes:
(1) COMPUTATION OF CAPITAL FUND
| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
| Capital Fund (Balancing Figure) | 2,47,000 | Building | 2,00,000 |
| Salaries Outstanding | 6,000 | Furniture | 20,000 |
| Books | 20,000 | ||
| Cash/ Bank Balance | 7,000 | ||
| Subscription Outstanding | 6,000 | ||
| Total | 2,53,000 | Total | 2,53,000 |
(2) COMPUTATION OF CURRENT YEAR OUTSTANDING SUBSCRIPTION
Current Year Subscription To Be Received = Rs.500 * 50 = Rs.25,000
Subscription Actually Received = Rs.20,000
Current Year Outstanding Subscription = Rs.5,000