From the following information, prepare the income and expenditure account for the year ended 31-03-2015 of Warangal Town Club:

Receipts and Payments account

| Receipts | Amount (Rs.) | Payments | Amount (Rs.) |
|---|---|---|---|
| To Balance | 10,000 | By Salaries | 8,000 |
|

Question

From the following information, prepare the income and expenditure account for the year ended 31-03-2015 of Warangal Town Club:

Receipts and Payments account

| Receipts | Amount (Rs.) | Payments | Amount (Rs.) |
|---|---|---|---|
| To Balance | 10,000 | By Salaries | 8,000 |
| To Subscriptions | 27,000 | By Grass making Machine | 4,000 |
| To Tournament fund | 10,000 | By Rent | 1,800 |
| To Legacies | 6,000 | By General expenses | 14,000 |
| To Entrance fee | 1,000 | By Tournament expenses | 4,000 |
| To Donation for ground | 16,000 | By office expenses | 9,000 |
| To Sale of grass | 800 | By Purchase of sports material | 6,000 |
|  |  | By Balance c/d | 24,000 |
| Total | 70,800 | Total | 70,800 |

Additional Information:
(i) Subscriptions received included an amount Rs. 4,200 related to the previous year.
(ii) Outstanding subscription Rs. 1000.
(iii) Sports materials opening balance Rs. 4,000 and closing balance Rs. 5,000.

Accepted Answer

>

> [!TLDR]
> For Warangal Town Club we strip the Receipts and Payments Account down to current-year revenue items. Subscriptions become Rs. 23,800 (27,000 − 4,200 previous year + 1,000 outstanding). Sports material consumed is Rs. 5,000 (4,000 opening + 6,000 purchased − 5,000 closing). Capital items — Legacies, Tournament fund, Donation for ground, the Grass-making machine — are excluded, and Tournament expenses are met from the Tournament fund. The result is an excess of expenditure over income (deficit) of Rs. 12,200. This is a TS Intermediate 2nd-year Accountancy not-for-profit organisation problem.
>
> **Working notes**
>
> - Subscriptions: 27,000 received − 4,200 (relating to the previous year) + 1,000 (current-year outstanding) = Rs. 23,800.
> - Sports material consumed: opening 4,000 + purchases 6,000 − closing 5,000 = Rs. 5,000 (charged to Income & Expenditure).
> - Excluded as capital receipts: Legacies Rs. 6,000, Tournament fund Rs. 10,000 and Donation for ground Rs. 16,000 (shown on the Balance Sheet / capital fund side).
> - Grass-making machine Rs. 4,000 is a capital expenditure (an asset), not an expense.
> - Tournament expenses Rs. 4,000 are set off against the Tournament fund, so they do not appear in Income & Expenditure.
> - Entrance fee Rs. 1,000 and Sale of grass Rs. 800 are taken as revenue income.
>
> **Income and Expenditure Account for the year ended 31-03-2015**
>
> | Expenditure | Amount (Rs.) | Income | Amount (Rs.) |
> |---|---|---|---|
> | To Salaries | 8,000 | By Subscriptions (27,000 − 4,200 + 1,000) | 23,800 |
> | To Rent | 1,800 | By Entrance fee | 1,000 | …

Receipts	Amount (Rs.)	Payments	Amount (Rs.)
To Balance	10,000	By Salaries	8,000
To Subscriptions	27,000	By Grass making Machine	4,000
To Tournament fund	10,000	By Rent	1,800
To Legacies	6,000	By General expenses	14,000
To Entrance fee	1,000	By Tournament expenses	4,000
To Donation for ground	16,000	By office expenses	9,000
To Sale of grass	800	By Purchase of sports material	6,000
		By Balance c/d	24,000
Total	70,800	Total	70,800

Expenditure	Amount (Rs.)	Income	Amount (Rs.)
To Salaries	8,000	By Subscriptions (27,000 − 4,200 + 1,000)	23,800
To Rent	1,800	By Entrance fee	1,000

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