Accountancy – Not-for-Profit Organisation and Partnership Accounts Figure 1 Receipts Payments 1. Donations (a) General (b) Specific purpose 2. Entrance Fees 3. Legacies 4. Sale of Investments 5. Sale of Fixed Assets 6. Subscriptions from Members 7. Life Membership Fees 8. Sale of old Newspapers 9. Sale of Old Sports Material 10. Interest on Fixed Deposits 11. Interest/ Dividend on Investments 12. Proceed from Charity Shows 13. Sale of Scrap 14. Grant-in-aid 15. Interest/Dividend on Specific Fund Investments 16. Miscellaneous Receipts. 1. Purchase of Fixed Assets 2. Purchase of Sports Material 3. Investment in Securities 4. Printing and Stationery 5. Postage and Courier Charges 6. Advertisements 7. Wages and Salary 8. Honorarium 9. Telephone Charges 10. Electricity and Water Charges 11. Repairs and Renewals 12. Upkeep of Play Ground 13. Conveyance Charges 14. Subscription for Periodicals 15. Audit Fees 16. Entertainment Expenses 17. Municipal Taxes 18. Charity 19. Insurance Receipt and Payment Account is given below: Receipt and Payment Account for the year ending ————Receipts Amount (Rs.) Payments Amount (Rs.) Balance b/d Balance b/d (Bank overdraft) xxx Cash in Hand xxx Wages and Salaries xxx Cash at Bank xxx Rent xxx Subscriptions xxx Rates and Taxes xxx General Donations xxx Insurance xxx Sale of newspaper/ xxx Printing and Stationery xxx periodicals/waste paper Postage and courier xxx Sale of old sports materials xxx Advertisement xxx Interest on fixed deposits Sundry expenses xxx Interest/Dividend on general xxx Telephone charges xxx investments Entertainment expenses xxx Locker Rent xxx Audit fees xxx Sale of scraps xxx Honorarium xxx Proceeds from charity show xxx Repair and Renewals xxx Miscellaneous receipts xxx Upkeep of ground xxx Grant-in-aid** xxx Conveyance xxx Legacies xxx Newspapers and Periodicals xxx Specific Donations xxx Purchases of Assets xxx Sale of Investments xxx Purchase of Investments xxx Sale of Fixed Assets xxx Balance c/d xxx Accountancy – Not-for-Profit Organisation and Partnership Accounts Entertainment expenses 900 Add: Outstanding 500 expenses Miscellaneous expenses Depreciation on furniture Surplus (Excess of Income over Expenditure) 1,400 600 375 7,075 Interest on investment Hall rent 200 300 14,000 14,000 1.4.2 Distinction between Income and Expenditure Account and Receipt and Payment Account Based upon discussion made in regard to the Receipts and Payments Account and the Income and Expenditure Account we make the distinction between Income and Expenditure Account and Receipts and Payments Account in the tabular form: Basis of distinction Account Income and Expenditure Receipt and Payment Account Nature It is like as profit and loss account. It is the summary of the cash book. Nature of Items It records income and expenditure of revenue nature only. It records receipts and payments of revenue as well as capital nature. Period Income and expenditure items relate only to the current period. Receipts and payments may also relate to preceding and succeeding periods. Debit side Debit side of this account records expenses and losses. Debit side of this account records the receipts. Credit side Credit side of this account records income and gains. Credit side of this account records the payments. Depreciation Includes depreciation. Does not includes depreciation. Opening Balance There is no opening balance. Balance in the beginning represents cash in hand /cash at bank or overdraft at the beginning. Closing Balance Balance at the end represents excess of income over expenditure or vice-versa. Balance at the end represents cash in hand at the end and bank balance (or bank overdraft). Accountancy – Not-for-Profit Organisation and Partnership Accounts Balance Sheet of as on ............... Liabilities Amount (Rs.) Assets Amount (Rs.) Capital fund: Opening Balance Add: Surplus OR Less: Deficit Add: Capitalised Income of the Current Year on account of: Legacies Entrance Fees Life Membership Fees Closing Balance Special Fund/Donations: Previous Balance (If any ) Add: Receipts for the item during the period Add: Income earned on fund/Donations’ Investments Less: Expenses paid out of fund/Donations Net Balance Creditors for Purchases and/or supplies Bank Overdraft Outstanding Expenses: Income received in Advance ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... Cash in hand and /or Cash at Bank Outstanding Incomes Prepaid Expenses Stock of Consumable Items: Previous BalanceAdd: Purchases in the current period Less: Value consumed during the period Previous Balance Add: Purchases in the current period Less: Book Value of the Asset sold/disposed off Closing Balance ...... ...... ...... ...... ...... ...... ...... ...... Fig. 1.2: Proforma Balance Sheet Illustration 4 From the following Receipt and Payment Account and additional information relating to Excellent Cricket Club, prepare Income and Expenditure Account for the year ended March 31, 2015 and Balance Sheet as on date. Dr. Cr. Receipts Amount (Rs.) Payments Amount (Rs.) Balance b/d (Cash in Hand) Member’s subscriptions Member’s admission fee Sale of old sports materials Hire of ground Subscription for tournament Life membership fee Donations 18,000 2,50,000 15,000 2,500 28,000 60,000 20,000 6,00,000 Balance b/d (bank overdraft) Upkeep of field and pavilion Tournament expenses Rates and Insurance Telephone Postage and Courier charges Printing and Stationery Miscellaneous expenses 16,000 1,15,000 40,000 10,000 3,500 4,000 26,000 4,400 32 Accountancy – Not-for-Profit Organisation and Partnership Accounts Solution Book of Entertainment Club Income and Expenditure Account for the year ending on March 31, 2016 Expenditure Amount (Rs.) Income Amount (Rs.) Salary 24,000 Add: Outstanding 4,000 Electric Bill Telephone Bill 35,000 Add: Outstanding 2,000 Subscription for periodicals Printing and Stationery 13,000 Add: Opening Stock 2,000 15,000 Less: Closing stock 3,000 Secretary's honorarium Sports Expenses 50,000 Less: Opening Balance of sports fund 15,000 35,000 Less: Donation for Sports 25,000 Depreciation On: Furniture 11,500 Building 32,500 Surplus (Excess of Income over Expenditure) 28,000 21,000 37,000 14,500 12,000 30,000 10,000 44,000 25,450 Subscriptions 1,00,000 Add: Outstanding 12,500 Sale of old periodicals Profit on sale of furniture Hire of ground for marriage Locker rent 17,050 Less: Opening o/s 3,050 14,000 Add: Closing o/s 1,500 Sale of Food Stuff 1,00,000 Cost of food Consumed 60,000 1,12,500 3,200 2,000 48,750 15,500 40,000 2,21,950 2,21,950 Accounting for Not-for-Profit Organisation Balance Sheet of Entertainment Club as on March 31, 2015 Liabilities Amount (Rs.) Assets Amount (Rs.) Sports fund Capital/General Fund (Balancing figure) 15,000 8,42,550 Cash in hand Cash at bank Outstanding subscription Outstanding locker Rent Printing & Stationery Furniture Buildings 27,500 60,000 15,000 3,050 2,000 1,00,000 6,50,000 8,57,550 8,57,550 Balance Sheet of Entertainment Club as on March 31, 2016 Liabilities Subscriptions received in advanced Outstanding Telephone Bill Salary Outstanding Capital/General Fund Add: Surplus 25,450 Amount (Rs.) 10,000 2,000 4,000 8,42,550 8,68,000 8,84,000 Assets Amount (Rs.) Cash in hand 21,500 Cash at bank 45,000 Outstanding subscriptions 15,000 (2015 Rs 2500 and 2016 Rs 12500) Outstanding locker Rent 1,500 Printing and Stationery 3,000 Furniture 1,00,000 Less: Sales 8,000 92,000 Less: Depreciation 11,500 80,500 Building 6,50,000 Less: Depreciation 32,500 6,17,500 Investment 1,00,000 8,84,000 Accounting for Not-for-Profit Organisation Solution Income and Expenditure Account for the year ending on March 31, 2015 Dr. Cr. Expenditure Amount (Rs.) Income Amount (Rs.) Salaries and Wages Sundry Expenses 37,000 Less: Outstanding on 31.3.2014 2,800 Stationery : (consumed) Opening stock 2,000 Add: Purchases 16,000 Less: Closing stock 3,600 Rates 24,000 Less: Paid for 2015-16 6,000 Add: Prepaid in 2014-15 6,000 Telephone charges 4,000 Add: Outstanding 1,400 audit fee Surplus Depreciation on building (excess of Income over expenditure) 83,200 34,200 14,400 24,000 5,400 6,000 10,000 3,24,800 Subscriptions Entrance fees Locker rent Income from refreshment: Revenue from 48,000 refreshment Less: Refreshment 37,500 expenses Income from 56,000 investments Add: Accrued income 1,500 on current year investment 3,60,000 16,000 58,000 10,500 57,500 5,02,000 5,02,000 Balance Sheet as on March 31, 2015 Liabilities Amount (Rs.) Assets Amount (Rs.) Outstanding Telephone Expenses Subscription received in Advance General Fund 12,49,400 Add: Surplus 3,24,800 1,400 12,000 15,74,200 Cash and Bank Balance Subscription in Arrears Stock of Stationery Rates Prepaid Accrued Interest on investment: Investments 8,00,000 Additions 2,50,000 Building 4,00,000 Less: Depreciation 10,000 Land 53,300 23,200 3,600 6,000 1,500 10,50,000 3,90,000 60,000 15,87,600 15,87,600 Accountancy – Not-for-Profit Organisation and Partnership Accounts Balance Sheet of Entertainment Club as on March 31, 2014 Liabilities Amount (Rs,) Assets Amount (Rs,) Capital Fund (Balancing figure) Prize fund Creditors for Sports Materials Subscription Received in Advance Outstanding Expenses: Rent 3,750 Miscellaneous 11,400 Expenses 2,42,350 60,000 7,000 7,000 15,150 Furniture 5% Prize Fund Investments Subscription Receivable (i.e. outstanding) Stock of Sports Materials Miscellaneous Expenses Paid in Advance Cash in hand 2,00,000 60,000 23,750 20,000 3,750 24,000 3,31,500 3,31,500 Balance Sheet of Entertainment as on March 31, 2015 Liabilities Capital fund 2,42,350 Add: Surplus 95,600 Entrance fees 20,000 Prize fund 60,000 Add: Donations 14,000 Interest received 1,500 Interest accrued* 1,500 77,000 Less:Prizes awarded 20,750 Creditors for sports materials Subscription received in advance Outstanding miscellaneous expenses Amount (Rs.) 3,57,950 56,250 14,750 13,000 20,100 4,62,050 Assets Amount (Rs.) Furniture: Opening balance 2,00,000 Additions 40,000 2,40,000 Less: Depreciation 24,000 2,16,000 5% Prize fund investments 60,000 Subscription receivable (i.e. Outstanding): (2013-2014) 500 (2014-2015) 17,000 17,500 Stock of sports materials 25,000 Miscellaneous expenses 4,250 Paid in advance Prepaid rent 3,750 Accrued interest on 1,500 Prize fund investments Cash in hand 1,34,050 4,62,050 Note: * Interest on Prize Fund Investments @ 5% amounts to Rs. 3,000 whereas only Rs. 1,500 have been received; so the balance is treated as Accrued interest. It is preferable to prepare separate accounts of various items involving many transactions. In this case Account for Subscription, Miscellaneous Expenses, and Sports Materials may be made as a Classroom activity.