Non-Profit Organisations

Workbook Questions
Illustration 1

From the following Receipts and Payments of Kolkata Club, Prepare Income and Expenditure
Account for the year ended 31.12.2024 and its Balance Sheet as on that date:
Receipts Amount Payments Amount
Cash in Hand (Opening) 2,000 Salary 1,000
Cash at Bank (Opening) 5,000 Repair Expenses 250
Donations 2,500 Purchase of Furniture 3,000
Subscriptions 6,000 Miscellaneous Expenses 250
Entrance Fees 500 Purchase of Investments 3,000
Interest on Investments 50 Insurance Premium 100
Interest Received from Bank 200 Billiards Table 4,000
Sale of Old Newspaper 75 Paper, Ink etc. 75
Sale of Drama Tickets 525 Drama Expenses 250
Cash in Hand (Closing) 1,325
Cash at Bank (Closing) 3,600
Total 16,850 Total 16,850

Information:
I. Subscriptions in Arrear for 2024 ₹ 450 and Subscriptions in Advance for 2025 ₹ 175
II. Insurance Premium Outstanding ₹ 20, Miscellaneous expenses Prepaid ₹ 45.
III. 50% of Donation is to be capitalized.
IV. Entrance fees are to be treated as Revenue Income.
V. 8% Interest has Accrued on Investments for 5 months.
VI. Billiards Table costing ₹ 15,000 were purchased during the last year and ₹ 11,000 were paid for it.

Solution:
Income and Expenditure Account for the year ended 31st December 2024
Expenditure Amount Amount Income Amount Amount
To Salary 1,000 By Donation (50% of 2,500) 1,250
To Repair Expenses 250 By Subscriptions (WN:2) 6,275
To Misc. Expenses (250 – 205 By Entrance Fees 500
Prepaid 45)
To Insurance Premium 120 By Interest on Investment
(100 + O/s 20) [ 8% on 3,000 × 5/12] 100
To Paper, Ink etc. 75 By Interest Received from 200
Bank
 By Sale of Old Newspapers 75
By Drama:
Tickets Sale 525
Less: Expenses (250) 275
To Surplus – Excess of 7,025
Income over Exp.
(Balancing figure)
8,675 8,675

Balance Sheet as on 31st December 2024

Capital and Liabilities Amt Amt Properties and Assets Amt Amt
Capital Fund: Non-Current Assets:
(i) Fixed Assets:
Billiards Table 15,000
Opening Balance (WN:1) 18,000 Furniture 3,000
Add: Surplus 7,025 (ii) Investments 3,000
Add: Donations (50% of 1,250 26,275 Current Assets: Interest
2,500) Receivable (Accrued 100 – 50
Received 50)
Current Liabilities: Subscriptions Receivable 450
Insurance Premium Payable 20 Cash in Hand 1,325
Subscription received in 175 Cash at Bank 3,600
Advance
Prepaid Expenses 45
26,470 26,470

Working Notes: 1
Balance Sheet as on 31st December 2024 (To find Opening Balance of Capital Fund)
Capital and Liabilities Amt Properties and Assets Amt
Capital Fund (Balancing figure) 18,000 Billiards Table 15,000
Creditors for Billiards Table (15,000 4,000 Cash in Hand 2,000
– 11,000)
Cash at Bank 5,000
22,000 22,000

Working Notes: 2
Subscription Account (To find out Subscription Income recognized for the Year)
Particulars Amt Particulars Amt
To balance b/d (Op. Bal of Nil By balance b/d (Op. Bal of Nil
[Link]’ble) [Link] in Adv.)
To Income and expenditure A/c – By Cash/Bank –[Link] 6,000
[Link] recognized during the 6,275 during the year
year (balancing figure)
To balance c/d (closing Bal of 175 By balance c/d (Cl. Bal of Subs. 450
[Link] in Adv.) Rec’ble)
6,450 6,450
Illustration 2

The following information were obtained from the books of Chennai Club as on 31.03.2025 at the end
of the first year of the club. You are required to prepare Receipts and Payments Account for the year
ended 31.03.2025:
i. Donations received for Building and Library Room ₹ 1,00,000.
ii. Other revenue receipts:
Particulars Actual Receipts
Entrance Fees 8,500
Subscription 9,500
Locker Rents 300
Sundry Income 530
Refreshment Account 8,000

iii. Other actual payments:

Particulars Actual Payments
Land ( Cost 5,000) 5,000
Furniture ( Cost 73,000) 65,000
Salaries 2,400
Maintenance of Playgrounds 500
Rent 4,000
Refreshment Account 4,000
Donations to the extent of ₹ 12,500 were utilized for the purchase of Library Books, balance was still
unutilized. In order to keep it safe, 9% Govt. Bonds of ₹ 80,000 were purchased on 31.03.2025.
Remaining amount was put in the bank on 31.03.2025 under the term deposit.

Solution:
Chennai Club
Receipts and Payments A/c for the year ended 31st March 2025
Receipts Amt Amt Payments Amt Amt
To Building and 1,00,000 By Library book A/c 12,500
library fund A/c
To Entrance fees A/c 8,500 By Bond 9% Govt.A/c 80,000
To Subscription A/c 9,500 By Fixed deposit A/c 7,500 1,00,000
([Link])
To Locker rent A/c 300 By Land A/c 5,000
To Sundry Income A/c 530 By Furniture A/c 65,000
To Refreshment A/c 8,000 By Salaries A/c 2,400
To Closing balance 54,070 By Maintenance of 500
(Overdraft balance- [Link]) playgrounds A/c
By Rent A/c 4,000
By Refreshment A/c 4,000
1,80,900 1,80,900
Illustration 3

The following is the receipts and payments account of Ayurveda Charitable Hospital for the year ended
31st March,2025:
Receipts Amt Payments Amt
To Balance b/d 70,000 By Payment for medicines 3,00,000
To Subscriptions 5,00,000 By Honorarium to doctor 1,00,000
To Donations 1,45,000 By Salaries 2,75,000
To Interest on investments @7% per 70,000 By Sundry expenses 5,000
annum for the year
By Equipment’s purchased 1,50,000
By Charity Show expenses 10,000
By Balance c/d 45,000
8,85,000 8,85,000

Additional information:
Particulars On 1.4.2024 On 31.03.2025
Subscriptions due 5,000 10,000
Subscriptions received in advance 10,000 5,000
Stock of medicines 1,00,000 1,50,000
Creditors for medicines 80,000 1,20,000
Equipment’s 2,10,000 3,00,000
Buildings 4,00,000 3,80,000
You are required to prepare income and expenditure account for the year ended 31st March,2025 and
balance sheet as at that date.

Solution:
Income & Expenditure A/c [ P&L A/c]
Expenditure Amt Income Amt
To Honorarium to Doctors A/c 1,00,000 By Donation A/c 1,45,000
To Salary A/c 2,75,000 By Interest A/c 70,000
To Sundry Expenses A/c 5,000 By Charity Show:
To Medicine A/c 2,90,000 Income 1,00,000
To Depreciation on Equipment A/c 60,000 Less: Expenses (10,000) 90,000
To Depreciation on Building A/c 20,000 By Subscription A/c 5,10,000
To Surplus A/c 65,000
8,15,000 8,15,000

Balance Sheet as on 31.03.2025

Liability Amt Asset Amt
Trust Fund 16,95,000 Investment 10,00,000
Add: Surplus 65,000 17,60,000 Subscription Outstanding 10,000
Advance Subscription 5,000 Medicine stock 1,50,000
Creditors for medicine 1,20,000 Building 3,80,000
 Equipment 3,00,000
Cash / Bank 45,000
18,85,000 18,85,000

Working Notes:
Important Points: By preparing these accounts we get missing information which may be a transaction
(complete the double entry of same) or a balance of that account. Complete accounting for whatever
information is available in the question. Then by balancing the account you will get information as a
balancing information.

Subscription A/c
Particulars Amt Particulars Amt
To Opening Outstanding 5,000 By Opening Advance 10,000
To Income & Expenditure A/c 5,10,000 By Cash/Bank A/c (received) 5,00,000
To Closing Balance (advance) 5,000 By Closing outstanding balance 10,000
5,20,000 5,20,000

Medicine A/c
Particulars Amt Particulars Amt
To Opening Balance ([Link]) 1,00,000 By Income & Expenditure A/c 2,90,000
(Consumed)
To Creditors A/c (Purchase) 3,40,000 By Closing Stock A/c 1,50,000
4,40,000 4,40,000

Creditors for Medicine A/c

Particulars Amt Particulars Amt
To Opening Balance ([Link]) 1,00,000 By Income & Expenditure A/c 2,90,000
(Consumed)
To Creditors A/c (Purchase) 3,40,000 By Closing Stock A/c 1,50,000
4,40,000 4,40,000

Equipment A/c
Particulars Amt Particulars Amt
To Opening Balance 2,10,000 By Depreciation A/c (balancing 60,000
fig.)
To Cash / Bank A/c (Purchase) 1,50,000 By Closing Balance 3,00,000
3,60,000 3,60,000

Building A/c
Particulars Amt Particulars Amt
To Opening Balance 4,00,000 By Depreciation A/c (Balancing 20,000
fig.)
By Closing Balance 3,80,000
4,00,000 4,00,000
 Balance Sheet as on 31.03.2025
Liability Amt Asset Amt
Advance Subscription 10,000 Cash/Bank 70,000
Creditor for Medicine 80,000 Investment*** 10,00,000
Trust Fund (Balancing figure) 16,95,000 Subscription Outstanding 5,000
Stock of Medicine 1,00,000
Equipment 2,10,000
Building 4,00,000
17,85,000 17,85,000
*** Investment is calculated from interest Investment = 70,000 /7 × 100 = ₹10,00,000.