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    Shubham Jain Modi
    Bharat Club provides an extract of its income and expenditure account and balance sheet as of March 31, 2016. The income and expenditure account shows sports materials consumed of Rs. 63,000 as an expenditure. The balance sheet shows creditors for sports materials of Rs. 9,750 as a liability and stock of sports materials of Rs. 3,750 as an asset. Working notes are also provided showing accounts for creditors for sports materials, stock of sports materials, and treatment of profit/loss from trading activities like a restaurant/bar run by a club. When credit purchases or sales are missing, total creditors or debtors accounts should be prepared to determine the amounts.

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    Image0027

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    Shubham Jain Modi
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    Bharat Club provides an extract of its income and expenditure account and balance sheet as of March 31, 2016. The income and expenditure account shows sports materials consumed of Rs. 63,000 as an expenditure. The balance sheet shows creditors for sports materials of Rs. 9,750 as a liability and stock of sports materials of Rs. 3,750 as an asset. Working notes are also provided showing accounts for creditors for sports materials, stock of sports materials, and treatment of profit/loss from trading activities like a restaurant/bar run by a club. When credit purchases or sales are missing, total creditors or debtors accounts should be prepared to determine the amounts.

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    Bharat Club provides an extract of its income and expenditure account and balance sheet as of March 31, 2016. The income and expenditure account shows sports materials consumed of Rs. 63,000 as an expenditure. The balance sheet shows creditors for sports materials of Rs. 9,750 as a liability and stock of sports materials of Rs. 3,750 as an asset. Working notes are also provided showing accounts for creditors for sports materials, stock of sports materials, and treatment of profit/loss from trading activities like a restaurant/bar run by a club. When credit purchases or sales are missing, total creditors or debtors accounts should be prepared to determine the amounts.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    25 views1 page

    Image0027

    Uploaded by

    Shubham Jain Modi
    Bharat Club provides an extract of its income and expenditure account and balance sheet as of March 31, 2016. The income and expenditure account shows sports materials consumed of Rs. 63,000 as an expenditure. The balance sheet shows creditors for sports materials of Rs. 9,750 as a liability and stock of sports materials of Rs. 3,750 as an asset. Working notes are also provided showing accounts for creditors for sports materials, stock of sports materials, and treatment of profit/loss from trading activities like a restaurant/bar run by a club. When credit purchases or sales are missing, total creditors or debtors accounts should be prepared to determine the amounts.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    10A.

    26 Tulsian's Accountancy for CA-IPC (Group I)


    ILLUSTRATION
    28
    Bharat Club provides

    SOLUTIO
    N
    AN EXTRACT OF INCOME AND EXPENDITURE
    ACCOUNT

    Dr
    .

    Incom
    e

    Expenditure

    To Sports Materials consumed

    Cr
    .

    Restaurant Purchase:

    63,000

    China Glass Cutlery

    AN EXTRACT OF BALANCE SHEET AS AT 31ST MARCH,


    2016
    Liabilities

    Assets

    Creditors for Sports Materials

    9,750 Advance for Sports Materials


    Stock of Sports Materials

    Stock in Restaurant o

    3,750
    2,500

    Working
    Notes:

    SOLUTIO
    N
    Dr
    .
    Particu

    Dr
    .

    Cr.

    (I) CREDITORS FOR SPORTS MATERIALS ACCOUNT


    Particulars

    To Balance b/d

    Particulars

    5,000 By Balance b/d

    To Bank A/c

    15,000

    54,000 By Stock of Sports Materials A/c

    To Balance c/d

    9,750 (Credit purchases)


    (Balancing figure)

    By Balance c/d
    68,750
    Dr
    .

    50,000
    3,750

    To Balance b/d

    To Bank A/c (cash purchases)

    To Depreciation
    Cutlery
    To Surplus transfer
    Expenditure A/c

    Cr.

    Dr
    .

    Particulars

    10,500 By Income and Expenditure A/c


    (Sports Materials consumed)

    To Creditor for Sports Materials


    (transfer)

    To Wages
    To Fuel

    68,750

    (II) STOCK OF SPORTS MATERIALS ACCOUNT


    Particulars

    To Opening Stock
    To Purchases

    50,000 (Balancing figure)


    5,000 By Balance c/d
    65,500

    63,000

    To Wages

    Expen
    c

    2,500

    AN
    I

    65,500

    Liabili

    14.0 TREATMENT OF PROFIT/LOSS FROM TRADING ACTIVITIES


    1.Sometimes Not-for-profit organisations carry on trading activities e.g. A Restaurant/Bar run by
    a club, Chemist shop by a hospital, Book-Shop by a library.
    2.In such a case, a separate Trading Account for each of the trading activities is prepared to
    ascertain the Profit/Loss from each of such trading activities.
    3.Such Profit/Loss is transferred to Income & Expenditure Account.
    4.Trading Account is prepared in the same manner as in case of commercial organisations.
    5.Sometimes the figures of Credit Purchases and Credit Sales are missing in the questions, in
    such case Total Creditors' Account and Total Debtors' Account should be prepared to
    ascertain credit purchases and credit sales respectively.

    15.0

    DISTINCTIO
    N
    A 'Receipt & Paymer
    Basis of
    Distinci
    1. Nature of
    Acco

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