DAILY TEST: 5 TEST SERIES: MAY 2025
FOUNDATION COURSE
PAPER 1- ACCOUNTING
Attend all the questions.
Whenever necessary, suitable assumptions should be made and disclosed by way of note
forming part of the answer.
Working Notes should form part of the answer.
Time Allowed: 35 Mins Maximum Marks: 20
Question 1:
From the Receipts and Payments Accounts of Delhi Club, prepare Income & Expenditure
Account for the year ended 31.12.2023 and its Balance Sheet as on that date.
Receipts Amount (₹) Payments Amount (₹)
Cash in hand (Opening) 8,100 Salary 3,000
Cash in bank (Opening) 15,000 Repair Expenses 500
Donations 7,000 Purchase of furniture 7,000
Subscriptions 10,000 Miscellaneous Expenses 500
Entrance fees 1,500 Purchase of Investments 6,000
Interest on Investments 100 Insurance Premium 300
Interest received from Bank 400 Billiards Table 10.000
Sale of Old newspaper 250 Paper, ink etc. 250
Sale of drama tickets 1,250 Drama expenses 500
Cash in hand (closing) 4,500
Cash in bank (closing) 11,050
43,600 43,600
Information:
(1) Subscriptions in Arrear for 2023 ₹ 1,200, subscription in advance for 2024 ₹ 550.
(2) Insurance Premium outstanding ₹ 80, Miscellaneous Expenses prepaid ₹ 90.
(3) 50% of Donation is to be capitalized.
(4) Entrance fee are to be treated as Revenue Income.
(5) 8% Interest has accrued on Investments for 5 months.
(6) Billiards Table costing ₹ 30,000 were purchased during the ₹ 20,000 were paid for it.
(10 Marks)
NARMATHA K 8667621400
5m for Income & exp a/c
5m for balance sheet
Answer:
Delhi Club
Income and the Expenditure Account for the year ending 31 st December, 2023.
Expenditure ₹ Income ₹
To Salary 3,000 By subscription (W.N. -ii) 10,560
To Repair expenses 500 By Donations (50%) 3,500
To Miscellaneous expenses 410 By Interest on Investments 300
To insurance premium 380 *(100+200)
To paper , ink etc. 250 By entrance fees 1,500
To excess of income over 12,810 By interest received from 400
expenditure Bank
By sale of old newspaper 250
By sales of drama tickets 1,250
Less expenses 500 750
17,350 17,350
Balance Sheet of Delhi Club as a 31st December, 2023
Liabilities ₹ Assets ₹
Capital fund: Furniture 7,000
Opening balance(W.N.1) 43,100 Investment 6,000
Add: Excess of income 12,810 Billiards table** 30,000
over exp Cash in hand 4,500
Add: Donations 3,500 59,410 Cash at bank 11,050
Insurance Premium payable 80 Prepaid Expenses –
Subscription received in 550 Misc exp 90
advance for 2024 Subscription receivable 1,200
Interest accrued on 200
investments*
60,040 60,040
Working Notes:
1. Calculation of Capital Fund
Balance Sheet of Delhi Club as at 31st December, 2022
Liabilities ₹ Assets ₹
Capital Fund (Balancing figure) 43,100 Billiards table 30,000
Creditors for Billiard table 10,000 Cash in hand 8,100
Cash at bank 15,000
53,100 53,100
NARMATHA K 8667621400
2. Calculation of amount of subscription shown in income and expenditure account.
₹
Subscription received in cash during 2023 10,000
Add: Outstanding of 2023 1,200
11,200
Less: Advance of 2024 (550)
10,650
Alternatively, this working of calculation of amount of subscription can also be presented in
the form of ledger A/c.
* It may be interpreted that investments have been purchased during the year i.e. 5 months
prior to the reporting date. Accordingly, total amount of interest accrued on such investment
shall be ₹ 200 for the calendar year 2023. Out of which ₹ 100 has been received and remaining
₹ 100 (200-100) is yet to be received (accrued). In that case, Interest on Investments in income
and expenditure account shall be ₹ 200 and Accrued Interest in Balance Sheet under asset
side shall be ₹ 100.
**Since in receipt and payment account ₹ 10,000 has been shown as payment for Billiard
table, it can also be assumed that this amount utilised for fresh purchase of billiard table. In
that case, the amount of Billiard Table at assets side in Balance sheet will be ₹ 40,000 and
unpaid amounts of billiard table shown at the liabilities side of balance sheet shall be ₹ 10,000.
Question 2:
The Receipts and Payments Account of Vandana Sports Club for the year ended 31 st March,
2024 are as follows:
Receipts and Payments Account
Receipts Amount Payment Amount
(₹) (₹)
To Balance b/d By Salaries 1,55,000
Cash in hand 5,200 By Rent & Electricity 69,750
Cash at bank 35,500 40,700 By Library Books 10,500
To Subscription 2,95,000 By Newspaper & Magazines 16,600
To Entrance fees 50,000 By Sports Equipment 28,500
To Miscellaneous Income 19,850 By Sundry Expenses 71,050
By Balance c/d
Cash in hand 8,750
Cash at bank 53,400 62,150
4,13,550 4,13,550
NARMATHA K 8667621400
Details of other assets and liabilities are furnished as follows :
Particulars 31st March 2023 31stMarch2024
(₹) (₹)
Salaries Outstanding 10,200 12,400
Outstanding Rent & electricity 6,500 7,600
Investment (8% Govt. Bond) 1,00,000 1,00,000
Interest Accrued on Bonds 2,000 2,000
Subscription receivable 18,700 20,600
Subscription received in advance 7,000 8,400
Furniture 65,500
Sports Equipment 41,500
Library books 22,000
The closing values of furniture and sports equipment are to be determined after charging
depreciation at 10% and 15% respectively inclusive of 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 31st
March,2024 was ₹ 30,000. 60% of the Entrance fee is to be capitalized. You are required to
prepare:
(i) Income and Expenditure Account for the year ended 31st March,2024
(ii) Balance Sheet as on 31st March, 2024 (10 Marks)
5m for Income & exp a/c
Answer: 5m for balance sheet
In the books of Vandana Sports Club
Income and Expenditure Account for the year ending 31 st March ,2024
Expenditure Amount ₹ Income Amount ₹
To Salaries (W.N.2) 1,57,200 By Subscription 2,95,500
To Rent & electricity 70,850 (W.N.2)
(W.N.2) By Interest on 8,000
To Magazines & 16,600 investments
newspapers By Misc. Income 19,850
To Sundry Expenses 71,050 By Entrance fees 20,000
To Depreciation ;
Furniture 6,550
Sports Equipment 10,500
Library Books 2,500 19,550
To Excess of income
over expenditure 8,100
3,43,350 3,43,350
NARMATHA K 8667621400
Balance Sheet as on 31st March , 2024
Liabilities Amount Amount Assets Amount Amount
₹ ₹ ₹ ₹
Capital Fund: Furniture Cost 65,000
Opening balance 2,66,700 Less: Depreciation (6,550) 58,950
(W.N.1) Sports Equipment:
Add: Excess of Opening Balance 41,500
Income over 8,100 Addition 28,500
exp 70,000
Entrance fees 30,000 3,04,800 Less: Depreciation (10,500) 59,500
(60%) Library Books:
Subscription 8,400 Opening Balance 22,000
received in Addition 10,500
advance 32,500
Outstanding Less: Depreciation (2,500) 30,000
expenses: Investments (8% 1,00,000
Salaries 12,400 Bonds)
Rent & Electricity 7,600 Cash in hand 8,750
20,000 Cash at bank 53,400
Subscription 20,600
receivable
Interest accrued on 2,000
Bonds
3,33,200 3,33,200
Alternatively, the capitalised portion of entrance fee of ₹ 30,000 may be shown separately in
the liability side.
Working notes:
1. Balancing Sheet as on 31st March,
Liabilities ₹ ₹ Assets ₹
Outstanding Furniture 65,000
Expenses: Library Books 22,000
Salaries 10,200 Sports equipment 41,500
Rent & electricity 6,500 16,700 Investments 1,00,000
Subscription received in 7,000 Cash in hand 5,200
advance Cash at bank 35,500
Capital Fund 2,66,700 Subscription 18,700
(Balancing Figure) receivable
Interest accrued 2,000
2,90,400 2,90,400
NARMATHA K 8667621400
2.
(i) Expenses Salaries Rent & Electricity
(₹) (₹)
Paid during the year 1,55,000 69,750
Add: Outstanding on 31.3.2024 12,400 7,600
1,67,400 77,350
Less: Outstanding on 31.3.2023 (10,200) (6,500)
Expenditure for the year 1,57,200 70,850
(ii) Depreciation:
(a) Furniture @10% on ₹ 65,500 6,550
(b) Sports Equipment @ 15% on ₹ 70,000 10,500
(c) Library books 32,500 2,500
Revalued at (30,000) 19,550
(iii) Subscription:
Received as per receipt and payment A/c 2,95,000
Add: Receivable on 31.3.2024 20,600
Add: Prepaid as on 31.3.2023 7,000
3,22,600
Less: Receivable on 31.3.2023 (18,700)
Less: Prepaid as on 31.3.2024 (8,400)
2,95,500
(iv) Entrance Fees:
Received as per receipt and payment A/c 50,000
Less: Capitalized (30,000)
Charged to Income & Expenditure 20,000
NARMATHA K 8667621400
