FIN611 VU Assignment No 1 Spring 2012 Solution

Assignment:
Following is the Receipts and Payments Account of Shaheen Sports Club for the year ended on 31 st December 2011.
Additional information:
1. There are 450 members, each paying an annual subscription of Rs. 1,000.
2. An amount of Rs. 9,000 was due from the subscriptions for the year 2010.
3. Accrued rent of Rs. 10,000 at the end of the year.
4. Stationery in hand at the end of the year is Rs. 18,000.
5. On 31st December 2010 the building stood in the books at Rs. 2,000,000 and is subject to depreciation at 5% per annum.
6. Investments at 31st December 2010 were Rs. 900,000.
Required:
Prepare Income and Expenditure Account for the year ended on 31st December 2011 and Balance Sheet as on that date.

Solution:

Income statement Formula:

Net profit = revenues – expenses

Income and Expenditure Account
For the year ended on 31st December 2011

INCOME
Subscription (450*1000) 450000
Profit on sale of events ticket 310000
Profit on investment s 200000
______________
Total Income 960000
Less :
Expenditure
Salary 416000
Stationery (80000-18000) 62000
Rent (120000+10000) 130000
Electricity 20000
Repairs 80000
General Expenses 100000
Bad Debts (9000-8000) 1000
Depreciation on Building 100000 (431000)
______________ ________________
431000 52900

 

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