Question 4 (f)
Club: bank balance in the closing Balance Sheet
2.75 marks
- Time to write
- About 6 minutes
From an older CBCS paper
Question
Question 4 (f) · 2.75 marks7.HIMALAYA CLUB, which also runs a Restaurant, gives you the information below:
- BALANCES, OPENING AND CLOSING
| Particulars | As on 1.4.2020 ₹ | As at 31.3.2021 ₹ |
|---|---|---|
| Furniture | 3,30,000 | ? |
| Sports Equipment | 3,30,000 | ? |
| China Glass, Cutlery etc., | 37,500 | ? |
| 6% Govt. Securities [Face value ₹ 4,50,000] | 3,75,000 | ? |
| Stock of Sports Materials | 4,500 | 750 |
| Advances to Suppliers of Sports Materials | 1,500 | 750 |
| Due to Suppliers of Sports Materials | 4,500 | 2,700 |
| Stock of Stationery | 3,000 | ? |
| Unpresented cheques (payment for stationery) | 1,350 | 450 |
| Subscription Outstanding | 7,125 | 5,250 |
| Subscription Received-in-Advance | 2,100 | 3,900 |
| Outstanding Miscellaneous Expenses | 7,125 | 5,250 |
| Miscellaneous Expenses paid in advance | 2,100 | 3,900 |
| Outstanding Wages | 7,500 | 6,000 |
| Cash Balance | 15,000 | 45,000 |
| Bank Balance (as per Pass Book) | 7,50,000 | ? |
| Stock of Provisions | 45,000 | 5,70,000 |
| Debtors for Provisions | 45,000 | 60,000 |
| Creditors for Provisions | 1,50,000 | 75,000 |
PAYMENTS: Suppliers of Sports Materials ₹ 16,200,Miscellaneous Expenses ₹ 1,11,675,Wages ₹ 76,500,Stationery ₹ 2,400, Furniture (Purchased on 1.10.2020) ₹ 2,25,000,Sports Equipment (purchased on 1.10.2020) ₹ 2,25,000,8% R.B.I Tax Free Bonds (bought on 1.1.2021) [Face Value ₹ 1,50,000] ₹ 1,18,800,Creditors for Provisions ₹ 15,75,000,Cash Purchases of Provisions – 1/11th of all Purchases.
RECEIPTS: Subscription ₹ 1,11,675,Interest on 6% Govt. Securities (After T.D.S. @ 10%) ₹ 12,150,Collection from Debtors for Provisions ₹ 13,35,000,Cash Sales of Provisions –10% of all Sales
4.Other Information:Rates of Depreciation:On China Glass & Cutlery, 20%, On Furniture, 10% p.a., and On Sports Equipment, 10%. The boarding expenses cost ₹ 41,250(₹ 30,000 of it for Restaurant staff).. Furniture with a book value of ₹ 30,000 as on 1.4.2020 was then sold, at a loss of 20%, on 31.12.2020.Write off 25% of Stationery.
Answer:
- Calculate the Bank Balance to be shown as at 31st March,2021 in the Closing Balance Sheet [2.75 Marks]
[Note:Financial Statements in detail need not be prepared.]
Reworded from the university paper: names and figures differ, the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.
Before you write
Read off the question and its marks
Read from the question
- CalculateFormula first, then the working, then the answer with its unit (₹, %, units).
What the paper leaves open
- The boarding expenses for restaurant staff are charged to the restaurant.
- Stationery: 25% of the stationery available is written off as consumed; the unpresented cheques are payments already in the cash book, and the bank balance at the year end is reconciled from the pass book.
- "7." before the club's name is kept as printed.
Write it in this order
- 1 Cash sales and purchases, furniture sale 1 mark 2 min
- 2 Receipts and payments 1 mark 2 min
- 3 Cash-book and pass-book balance 0.8 mark 2 min
Try it first. About 6 minutes for 2.75 marks. Write it out, then open the solution.
Solution
Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.
Approach. The receipts and payments given are cash-book figures (paper note: the unpresented cheques are already in the cash book). The opening bank balance is given as per the pass book, so the opening cash-book balance is 7,50,000 − 1,350 = ₹7,48,650. The closing cash-book balance is found by difference; the pass book shows ₹450 more, the cheques issued but not yet presented.
Receipts and payments of the year
| Receipts | ₹ | Payments | ₹ |
|---|---|---|---|
| Subscriptions | 1,11,675 | Suppliers of sports materials | 16,200 |
| Interest on 6% Govt. Securities (net of TDS) | 12,150 | Miscellaneous expenses | 1,11,675 |
| Collections from debtors for provisions | 13,35,000 | Wages | 76,500 |
| Cash sales of provisions (10% of 15,00,000) | 1,50,000 | Stationery | 2,400 |
| Sale of furniture (book value 27,750 at the sale date, less 20%) | 22,200 | Furniture | 2,25,000 |
| Sports equipment | 2,25,000 | ||
| 8% R.B.I. Tax-free Bonds | 1,18,800 | ||
| Creditors for provisions | 15,75,000 | ||
| Cash purchases of provisions (1/11 of 16,50,000) | 1,50,000 | ||
| Total receipts | 16,31,025 | Total payments | 25,00,575 |
(The furniture's book value of ₹30,000 at 1.4.2020 is reduced by nine months' depreciation at 10%, ₹2,250, to ₹27,750 at the sale on 31.12.2020; a 20% loss gives proceeds of ₹22,200.)
| Particulars | ₹ |
|---|---|
| Opening cash 15,000 + bank as per cash book 7,48,650 | 7,63,650 |
| Add: receipts | 16,31,025 |
| Less: payments | 25,00,575 |
| Cash and bank at 31.3.2021 | (1,05,900) |
| Less: cash balance | 45,000 |
| Bank balance as per cash book (overdraft) | (1,50,900) |
| Add: cheques issued but not presented | 450 |
| Balance as per pass book (overdraft) | (1,50,450) |
The club has a bank overdraft of ₹1,50,900, shown on the liabilities side of the balance sheet.
Where the 2.75 marks sit
| # | Component | Marks |
|---|---|---|
| 1 | Cash sales and purchases, furniture sale | 1 |
| 2 | Receipts and payments | 1 |
| 3 | Cash-book and pass-book balance | 0.75 |
| Total | 2.75 |
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