Question 3 (b)
NPO: sports materials consumed and their presentation
6 marks
- Time to write
- About 12 minutes
- Notes
- Crux notes
Question
Question 3 (b) · 6 marksAn NPO gives the information below for the year ended 31st March, 2024. Based on this information, calculate the amount of stationary consumed and present the items within the NPO's financial statements for the year ended 31st march, 2024:
| Particulars | As at 1.4.2023 (₹) | As at 1.4.2024 (₹) |
|---|---|---|
| Creditors for sports materials | 8,000 | 12,500 |
| Stock of sports materials | 22,000 | 30,000 |
The payment to creditors amounted to ₹ 86,000, and cash purchases of sports materials amounted to ₹ 24,000.
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 paper asks for the "stationary consumed", but every figure it gives is for sports materials; it is read as the sports materials consumed.
- The second column is dated 1.4.2024 (in our version), the day after the year end; it is read as the closing balances at the end of the year.
Write it in this order
- Read the data; note exactly what is asked 1 min
- 1 Credit purchases via the Creditors account 2 marks 3 min
- 2 Consumption via the Stock account 2 marks 3 min
- 3 Presentation in the I&E Account and Balance Sheet 2 marks 3 min
- Check: arithmetic, units (₹, %), final answer underlined 2 min
Final answer
Check your own figures against these.
- Credit purchases
- ₹90,500
- Total purchases
- ₹1,14,500
- Sports materials consumed
- ₹1,06,500
Try it first. About 12 minutes for 6 marks. Write it out, then open the solution and check your figures against the final answer.
Solution
Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.
The amount consumed is found through a Creditors for Sports Material Account, which gives the credit purchases as its balancing figure, and a Stock of Sports Material Account, which gives the consumption.
Creditors for Sports Materials Account (foots ✓)
| Dr | ₹ | Cr | ₹ |
|---|---|---|---|
| To Cash (paid) | 86,000 | By Balance b/d | 8,000 |
| To Balance c/d | 12,500 | By Purchases: credit (balancing figure) | 90,500 |
| 98,500 | 98,500 |
| Dr | ₹ |
|---|---|
| To Cash (paid) | 86,000 |
| To Balance c/d | 12,500 |
| 98,500 | |
| Cr | ₹ |
| By Balance b/d | 8,000 |
| By Purchases: credit (balancing figure) | 90,500 |
| 98,500 |
Stock of Sports Materials Account (foots ✓)
| Dr | ₹ | Cr | ₹ |
|---|---|---|---|
| To Balance b/d | 22,000 | By Income & Expenditure A/c: consumed (balancing figure) | 1,06,500 |
| To Purchases: credit | 90,500 | By Balance c/d | 30,000 |
| To Purchases: cash | 24,000 | ||
| 1,36,500 | 1,36,500 |
| Dr | ₹ |
|---|---|
| To Balance b/d | 22,000 |
| To Purchases: credit | 90,500 |
| To Purchases: cash | 24,000 |
| 1,36,500 | |
| Cr | ₹ |
| By Income & Expenditure A/c: consumed (balancing figure) | 1,06,500 |
| By Balance c/d | 30,000 |
| 1,36,500 |
Check by the adjustment method. The DU text's worked example computes the stationery actually used as the stock in hand at the start, plus the payments made during the year less the amount paid for the last year, plus the creditors at the end, less the stock still unused at the end. The same build-up here: opening stock 22,000 + (cash paid to creditors 86,000 − opening creditors 8,000 + closing creditors 12,500) + cash purchases 24,000 − closing stock 30,000 = ₹1,06,500 ✓.
Presentation
Income & Expenditure Account for the year ended 31 March 2024 (extract)
| Expenditure | ₹ | Income | ₹ |
|---|---|---|---|
| To Sports materials consumed | 1,06,500 |
Balance Sheet as at 31 March 2024 (extract)
| Liabilities | ₹ | Assets | ₹ |
|---|---|---|---|
| Creditors for sports materials | 12,500 | Stock of sports materials | 30,000 |
The Income & Expenditure Account records only the revenue items of the current year, the materials actually used, rather than the cash paid; the unused stock is an asset and the unpaid creditors a liability.
Result: credit purchases ₹90,500 · total purchases ₹1,14,500 · sports materials consumed ₹1,06,500.
Where the 6 marks sit
| # | Component | Marks |
|---|---|---|
| 1 | Credit purchases via the Creditors account (₹90,500) | 2 |
| 2 | Consumption via the Stock account (₹1,06,500) | 2 |
| 3 | Presentation in the I&E Account and Balance Sheet | 2 |
| Total | 6 |
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