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How will you treat the following items:

 

 Receipt and Payment 31-12-2006

Receipts

Rs.

Payments

Rs.

 

 

By Salaries:

 

 

 

2005

20,000

 

 

2006

2,80,000

 

 

2007

18,000

 

 

 

 

Additional Information:

 i. Salaries outstanding on 31st December, 2005 Rs.25,000.

 ii. Salaries outstanding on 31st December, 2006 Rs.45,000

 iii. Salaries paid in advance on 31st December, 2005 Rs.10,000.

 

 

 

 

Asked by Topperlearning User 1st July 2016, 3:14 PM
Answered by Expert
Answer:

 Income and Expenditure Account for the year ended 31st December, 2006

 

Dr.

Cr.

Expenditure

 

Rs.

Income

Rs.

 To Salaries

2,80,000

 

 

 

Add: Salaries received in Advance (LY 2005)

10,000

 

 

 

 

 

 

 

 

Add: Outstanding (CY 2006)

40,000

 

 

 

 

 

3,30,000

 

 

 

 

 

 

 

 

 

 

 Balance Sheet as on 31st December, 2005

Liabilities

Rs.

Assets

Rs.

Salary outstanding

25,000

Salaries Prepaid

10,000

 

 

 Balance Sheet as on 31st December, 2006

 Liabilities

 

Rs. 

Assets

Rs. 

Salaries outstanding :

 

 

Salaries Prepaid

18,000

2005 (25,000 -20,000)

5,000

 

 

 

2006 (45,000-5,000)

40,000

45,000

 

 

 

 

 

Note:

Salaries outstanding as on 31st December, 2006 appearing on the Liabilities side of the Balance Sheet amounted at Rs. 45000. It includes salaries outstanding for the year 2005 Rs.5,000 (i.e., Rs.25,000- Rs.20,000) and salaries outstanding for the year 2006, amounted to only Rs. 40,000.

 

 

Answered by Expert 1st July 2016, 5:14 PM
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