Financial Statements and Analysis Test - 14

There is balance of Rs. 15000 in sports fund and and expense on sport event is Rs. 17500 which means maximum Rs. 15000 can be debited from the sports fund and the excess of Rs. 2500 (Rs. 17500-Rs. 15000) will be shown in the Income and Expenditure account on debit side(Expenditure side).

There is balance of Rs. 15000 in sports fund and and expense on sport event is Rs. 17500 which means maximum Rs. 15000 can be debited from the sports fund and the excess of Rs. 2500 (Rs. 17500-Rs. 15000) will be shown in the Income and Expenditure account on debit side(Expenditure side).

On 1April, 2011

Total Assets= Building + Computer + Furniture + Cash + Subscription Due(outstanding)

Total Assets = 200000+45000+30000+2000 +1000

Total Assets = Rs. 278000

Total Liabilities= Salary Due (outstanding)
Total Liabilities = Rs. 2000

 So,

Capital Fund = Total Assest - Total Liabilities

Capital fund = 278000-2000

Capital fund = Rs. 276000

Pavilion fund is a spcific fund whiich is for construction for pavilion hence it is an liability. Any expendtiure to construct will be deducted from this fund .

So, Expendtiure on construction is deducted from pavilion fund and added to capital fund and it is also shown on assets side as work in prorgress.

Amount to be shown on liability side of balance sheet as Pavilion fund = Balance in pavilion fund - Expenditure on construction of pavilion 

Amount to be shown on liability side of balance sheet as pavilion fund = 10,00,000-6,00,0000= Rs. 4,00,000

Since, Expenditure on construction of pavilion is a capital expenditure it is to be decucted from Pavilion fund. The amount deducted will be added to capital fund too and with that there is work in progress which increase the assets of the balance sheet with Rs. 6,00,000. 
Hence , No amount is to be charged to income and expenditure account. There will be Increase in asset one side with Rs. 6,00,000 as work in progress as pavilion construction and On liabilitiy side this will be deduct from pavilion fund and added to capital fund.

These are the fees collected from every member at the time of his admission into membership. It is paid only once by the new entrants on becoming a member of a society or a club. 

It is treated in two ways :-

-if It is to be capitalized then it will be shown in to Balance sheet on the liability side.

-If it is to be consider as revenue receipt then show it in to income and expenditure account on the income side.

Hence, Rs. 20% which means Rs. 2000 (10,000*20%) will be shown on the liability side of balance sheet and balance of Rs. 8000  is to be shown in income expenditure account on income side.

Subscription to be shown on the income and expenditure side = Subscription received + Subscription receivable at the end of year - Subscription of the previous year

Subscription to be shwon on income and expenditure side = 10,000+1,000-2,000 = Rs. 9,000

There was Endowment fund of Rs. 20,00,000 received as a gift which is to be invested in prepetuity and when investment purchased Rs. 40,000 this will be out of endowment fund. Hence the balance amount will be :- 20,00,000-40,000=19,60,000 Rs. But at the end of first year the fair value of fund is Rs. 20,10,000 Which means it increase Rs. 50,000 (20,10,000-19,60,000) .

Endowment fund is a gift received by NPO as specify by donor or trustee to use this fund to specifi purpose thus it is capital receipt which is to be shown oj liability side of balance sheet because it provide permanent income to institution. 
Now, in this case, Amount of endowment fund is having specific condition to use for recreational activity Which amounting to Rs.10,00,000 And this will be the permanentaly restricted contribution for the current year.

Supporting services expenses  are those expense which consists of 1) management and general expenses, and 2) fundraising expenses.

Hence , Total of Rs. Rs. 450000 (Fundraising Rs.250,000, Management and general Rs.200,000 )will be considered as support expense.