CBSE Class 12 Accountancy Accounting for Not for Profit Organisation Assignment

Question. How would you account for ‘subscription received in advance’ in the current year in the books of a non trading organisation?
Answer : Subscription received in advance is subtracted from subscription received during the year in Income and Expenditure A/C and shown as a liability in the closing Balance sheet.

Question. Show the following information in the Balance Sheet of the Cosmos club as on 31st March 2007:-

Additional Information:-
Interest accrued on Tournament Fund Investment Rs. 6000.
Answer : Balance sheet of Cosmos Ltd.
As on 31st March, 2007

Question. How would you account for ‘subscription due to be received’ in the current year in the books of a non trading organisation?
Answer : Subscription due to be received is added with subscription received during the year in Income and Expenditure A/C and shown as an asset in the closing balance sheet.

Question. From the following extracts of Receipts and Payments Account and the additional information given below, compute the amount of income from subscriptions and show us how they would appear in the Income and Expenditure Account for the year ending March 31, 2007and the Balance sheet on that date:-
Receipts and Payments A/C
For the year ending March 31, 2007

Additional information:-
(i) Subscription outstanding on March 31, 2006 Rs. 8500.
(ii) Total subscriptions outstanding on March 31, 2007 Rs. 18,500.
(iii) Subscriptions received in advance as on March 31, 2006 Rs. 4000.
Answer : Income and Expenditure A/C
For the year ending March 31, 2007

Question. Tournament fund appears in the books Rs. 15,000 and expenses on tournament during the year were Rs. 18000. How will you show this in format while preparing financial statement of a not-for-profit organisation?
Answer : Income and Expenditure A/C
For the year ended ………

Question. Calculate the amount medicines to be debited in the Income and Expenditure Account of a Hospital on the basis of the following information:-

Amount paid for medicines during the year was Rs. 6,79000.
Answer : Amount paid for medicine during the year     6,79000

Question. What is meant by fund based accounting?
Answer : Fund based accounting is a book peeping technique where by separate self-balancing sets of assets, liability, income, expenses and fund balance accounts are maintained for each contribution for a specific purpose.

Question. State any two characteristics of Receipt and Payment Account.
Answer : (i) Receipts and Payments Account is a summary of Cash Book.
(ii) Non- cash expenses such as depreciation and outstanding expenses are not shown in Receipts and Payments Account.

Question. From the following particulars of a club, calculate the amount of salaries to be shown in Income and expenditure account for the year ended 31 March, 2008:-
Total salaries paid during the year 2007-08        Rs. 87,000
Outstanding salaries on 01-04-2007                  Rs. 17,000
Prepaid salaries on 01-04-2007                                      Rs. 19,000
Outstanding salaries on 31-03-2008                  Rs. 32,000
Prepaid salaries on 31-03-2008                                      Rs 20,000
Answer :Calculation of salaries to be shown in Income and Expenditure A/C for the year ended March 31, 2008:-
 

Question. Distinguish between Receipts and Payments A/C and Income and expenditure A/C.
Answer : Difference between Receipts and Payments and Income and Expenditure.

Question. As per Receipt and Payments account for the year ended on March 31, 2008, the subscription received were Rs. 2,50,000. Addition information given is as follows:-
(i) Subscriptions outstanding on 01-04-2007 Rs. 50,000.
(ii) Subscription outstanding on 31-03-2008 Rs. 35,000.
(iii)Subscription Received in advance as on 31-03-2008 Rs. 30000.
Ascertain the amount of income from subscription for the year 2007-08.
Answer : Calculation of current year subscription to be shown in Income and Expenditure A/C for the year ended March 31, 2008 :-
Total subscription received during the year        250000

Question. Give to main sources of income of a ‘Not for profit organisation’.
Answer : (i) Subscription
(ii) Donation.

Question. Calculate the amount to be debited to Income and Expenditure account under the heading sports items for the year 2006-07 in respect of the Osmosis club:-
Stock of sports items on 01-04-2006 Rs. 44,700
Stock of sports items on 31-03-2007 Rs. 24,500
Paid for sports items during the year Rs. 97,900
Creditors for supplies of sports items 31-03-2007 Rs. 26,500.
Answer : 
Sports items to be debited in the Income and expenditure A/C 144600

1. Bilochpur Ltd. has an outstanding balance of Rs. 4,00,000, 8% Debentures of Rs. 100 each. The Board of Directors decided to purchase 1, 00,000 debentures at a price of Rs. 96 for investment purposes but after few months they took a decision to sell them @ Rs. 99 in the market. Record necessary entries to show above transactions.

2. (a) (i) Z Ltd. purchased a building for Rs. 2,20,000. Half of the payment was made in cash and the balance by issue of 12% debentures at premium of 10% Pass the necessary journal entries in the books of Z Ltd.

(ii) A Ltd. issued Rs. 2,00,000. 12%. Debentures as collateral security. Pass necessary journal entries in the books of A Ltd.

(b) A company had issued 10% Rs. 100 debentures amounting to Rs. 80,000 redeemable at the option of the company by drawing at par or by purchase in the open market. The company decides to redeem Rs. 20,000 debentures by the purchase of Rs. 16,000 debentures in the open market at Rs. 98 each and draw Rs. 4,000 debentures.

Assuming that company had sufficient balance in the Debenture Redemption Reserve before the purchase of own debentures, pass the necessary journal entries in the books of the company.

3. X Ltd. invited applications for 2,00,000 equity shares of Rs. 10 each at a premium of Rs. 2 per share payable as to Rs. 2 on application, Rs. 5 on allotment including premium, Rs. 2 first call & Rs. 3 on final call.

Applications were received for 3,00,000 shares. Applications for 60,000 shares were rejected and pro-rata allotment was made to the remaining applicants. Ram, who applied for 9,600 shares, failed to pay allotment and two calls and Shyam the holder of 12,000 shares, failed to pay two calls. These shares were forfeited. Subsequently, all these shares were reissued at Rs.8 per share as fully paid up. Pass necessary journal entries in the books of X Ltd.

4. Beriwal Ltd. at present is having an equity share capital of Rs. 1, 00,000. The face value of one equity share is Rs. 10.It intends to make further issue of equity as follows:

(I) General public-10,000 equity shares at a discount of Re. 1 per share. Terms of issue:

Application Rs.2, Allotment Rs.2, First and Final Call Rs.5

The shares issued to the public were oversubscribed by 1,000 shares. The directors have refunded the entire excess application money. Jatin holding 200 shares failed to pay the final call and these shares have been forfeited after having notices of forfeited etc. Later these shares were issued to Bobby of maximum discount.

(II) The company acquired assets worth Rs. 9,00,000, the payment was settled by the issue of sufficient number of equity shares at a discount of Re. 1 per share. You are required to

(a) Give journal entrees to record the above Share Capital transactions including forfeiture and reissue.

(b) Give journal entries in respect of purchase of assets.

Please click the below link to access CBSE Class 12 Accountancy Revision Assignment Set D