Balance sheet

Balance sheet

The Balance sheet of not for profit organisation is prepared on the same principle as the balance sheet of a profit seeking business. it is a statement of all assets and liabilities of the business. There is no Capital in the case of a trading concern but it may have Capital Fund.Capital fund is made up of surplus of income over expenditure and certain items which are capitalised.Excess of assets over liabilities is called Capital Fund or General Fund

Steps in the Preparation of Balance sheet 

1. Find out the opening capital fund by preparing the opening balance sheet, take only the assets and liabilities on opening date, the difference between the two sides is capital fund.
2. Surplus added to the capital fund and deduct deficit if any. Also add items to be capitalised along with capital funds like legacy,entrance fee etc.
3. Take all the fixed assets which are already shown in the Opening balance sheet and add purchases of fixed assets (from receipt and payment account) or less sale of fixed assets during the year.
4. Calculate the depreciation on fixed assets and deduct depreciation from the value of assets and shown in the asset side of the balance sheet.
5. Consider the following items : 

• Subscription due but not yet received - shown in Asset side of balance sheet.
• Income received in advance - shown in the liability side of the balance sheet.
• Sale of fixed assets - adjusted along with assets.
• Outstanding expenses - shown in the liability side of the balance sheet.
• Prepaid expenses - shown in the Asset side of the balance sheet.

6. Stock of consumables eg. stationery items - shown in the Asset side of the balance sheet.

7. Closing balance of cash and bank - shown in Asset side of the balance sheet. 8) If bank overdraft - shown in liability side of balance sheet.

Q 16

Q17 - Following is the receipt and Payment Account of an Entertainment Club the period April 1,2016 to March 31,2017.

Additional information :

1 - The club had 225 members, each paying an annual subscription of Rs. 500. Subscription outstanding as on 31 March 2016 Rs. 15,000.

2 - Telephone bill outstanding for the year 2016-2017 is Rs. 2,000.

3 - Locker Rent Rs. 3,050 outstanding for the year 2015-16 and Rs. 1,500 for

2016-17.4 - Salary outstanding for the year 2016-17 Rs. 4,000.

5 - Opening Stock of Printing and stationery Rs. 2,000 and closing stock of printing

and stationery is Rs. 3,000 for the year 2016-17.

6 - On 1 st April 2016 other balances were as under:

Furniture1,00,000
Building6,50,000
Sports fund15,000

7 - Depreciation Furniture and Building @ 12.5% and 5% respectively assuming that it is on reducing balance for the year ending March 31,2017

Prepare Income and Expenditure account and Balance Sheet as on that date.

Ans :surplus 25450,Opening Capital Fund :842550, Closing B/S total : 884000

Calculation of Subscription for the year.

Subscription is a membership fee paid by the member on annual basis. This is the main source of income of such organisations. Subscription paid by the members is shown as receipt in the Receipt and Payment Account and as income in the Income and Expenditure Account..Adjustments should be made to show the correct income for the period.

Method - 1

Method - 2

Q 18 - From the following particulars ,calculate the subscription amount to be credited to the Income and Expenditure Account for the year ending 31st December 2013. (Statement form and Account form)

Subscription  received in 2013           - 18,300

Subscription outstanding on 1st january 2013          - 900

Subscription outstanding on 31st December 2013      - 1,300

Subscription received in advance  on 1st january 2013      - 750

Subscription received in advance  on 31st December 2013      - 540

Ans : Amount credited to IE A/c - 18,910

Q 19 - As per Receipts and Payment Account for the year ended on March 31, 2019, the

subscriptions received were ` 50,000. Additional information given is as follows :

(i) Subscriptions outstanding on 1-4-2018  – 5,000.

(ii) Subscriptions outstanding on 31-3-2019  – 3,000.

(iii) Subscriptions received in advance as on 1-4-2018 – 2,000.

(iv) Subscriptions received in advance as on 31-3-2019  – 4,000.

Calculate the amount of subscriptions for the year 2018-19 to be credited to Income & Expenditure Account.

Ans : 46000

Q 20 -As per the Receipt and Payment account of Jeevan Sports Club during the year 31st December 2016, subscriptions received were ` 1,26,000.

Additional Information :

(a) Subscription received in advance on 31-12-2016  - 26,000.

(b) Subscription outstanding on 1-1-2016  - 12,000.

(c) Subscription received in advance on 1-1-2016 were - 14,000.

(d) Subscription outstanding on 31-12-2016 was - 15,000.

Ascertain the subscription to be credited to Income and Expenditure account for the year 2016, and state which item will appear in the assets side of the closing Balance Sheet for the year 2016.

Ans : 1,17,000 .

In closing BS , Asset side :  Sub.Out standing    31-12-2016             –   15000

Q21 - Q23 - Extracts of Receipt and Payment Account for the year ended March 31, 2017 are given below:

Receipt

Subscriptions              (Rs.)

2015-16                      2,500

2016-17                     26,750

2017-18                     1,000
 Total : 30,250

Additional Information:

Total number of members: 230.

Annual membership fee: Rs. 125.

Subscriptions outstandings on April 1, 2016: Rs. 2,750.

Prepare a statement showing all relevant items of subscriptions viz., income, advance, outstandings, etc.

Ans : Income from Subscription for the year 2016-17. (125×230) 28,750