Given below is the Receipts and payments Account of a Mayour club for the year ended 31st March 2019:

Prepare club's income and Expenditure account for the year ended 31st March 2019 and Balance Sheet as at that date taking the following information into account,
(i) There are 500 members each paying an annual subscription of Rs 500 Rs 5,000 are still in arrears for the year ended 31st March 2018.
(ii) Municipal Taxes amounted to Rs 4,000 per year is paid up to 30th june and Rs 5,000 are outstanding of salaries
(iii) Building stands in the books at Rs 5,00,000.
(iv) 6% interest has accued on investments for five months.

Answer

Capital Fund (1st April 2018) -Rs 6,12,500; Surplus -Rs 2,22,500; Balance Sheet Total -RS 8,46,000.

Explanation

Since yearly Municipal Taxes are Rs 4,000 Rs 1,000 must have been paid during the previous year for the current year .As per question Municipal Taxes amounted to Rs 4,000 per year have been paid up to 30th june 2019 it means out of Rs 4,000 Rs 1,000 for three months `(i.e., Rs 4,000 xx 1//4)` relate to next year.