Question 3 OR (b)
Subscriptions credited to the Income & Expenditure Account
6 marks
- Time to write
- About 12 minutes
- Notes
- Crux notes
Question
Question 3 OR (b) · 6 marksThe final accounts of the Vega club are prepared every year as at 31st March. At 31st March, 2024 subscriptions in arrear amounted to ₹19,200, and subscriptions received in advance for the year 2024-25 came to ₹16,000. During 2024-25, ₹2,70,000 was received in respect of subscriptions, including ₹16500 of arrears for the year 2023-24 and ?24,000 in advance for the year 2025-26. At 31st March 2025 subscriptions in arrears amounted to ₹12,000. Calculate the amount of subscriptions to be credited to the income and expenditure account by preparing the subscription account for the year 2024-25.
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 gives the arrears at the start of the year (₹19,200 in our version) but says only part of them (₹16500) was received during the year, and then gives one figure for arrears at the year end (₹12,000). It does not say whether that figure includes the ₹2,700 of last year's arrears still unpaid. We read the closing figure as all subscriptions in arrear at the year end, including that ₹2,700, which is how the subscription account balances: income ₹2,54,800. If it were only this year's arrears, with the old ₹2,700 still due on top, the income would be ₹2,57,500.
- One rupee sign is printed as "?"; it is kept as printed.
Write it in this order
- Read the data; note exactly what is asked 1 min
- 1 Opening arrears and advance correctly placed 1 mark 2 min
- 2 Cash received, closing arrears and advance correctly placed 2 marks 3 min
- 3 Income as the balancing figure 2 marks 3 min
- 4 Treatment of the old arrears still unpaid 1 mark 2 min
- Check: arithmetic, units (₹, %), final answer underlined 1 min
Try it first. About 12 minutes for 6 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.
The Income and Expenditure Account takes the subscriptions of the year, received or still due, and leaves out amounts belonging to earlier or later years. The DU text works such a figure as: subscriptions received, plus this year's subscriptions received in advance last year and still due, less amounts received for other years. The subscription account below does the same thing as a ledger, with the income as its balancing figure.
Subscription Account for the year 2024-25
| Dr | ₹ | Cr | ₹ |
|---|---|---|---|
| To Balance b/d (arrears at 31-3-2024) | 19,200 | By Balance b/d (advance for 2024-25) | 16,000 |
| To Income & Expenditure A/c (balancing figure) | 2,54,800 | By Cash / Bank (received during 2024-25) | 2,70,000 |
| To Balance c/d (advance for 2025-26) | 24,000 | By Balance c/d (arrears at 31-3-2025) | 12,000 |
| Total | 2,98,000 | Total | 2,98,000 |
| Dr | ₹ |
|---|---|
| To Balance b/d (arrears at 31-3-2024) | 19,200 |
| To Income & Expenditure A/c (balancing figure) | 2,54,800 |
| To Balance c/d (advance for 2025-26) | 24,000 |
| Total | 2,98,000 |
| Cr | ₹ |
| By Balance b/d (advance for 2024-25) | 16,000 |
| By Cash / Bank (received during 2024-25) | 2,70,000 |
| By Balance c/d (arrears at 31-3-2025) | 12,000 |
| Total | 2,98,000 |
Subscriptions credited to the Income & Expenditure Account for 2024-25: ₹2,54,800.
| Particulars | ₹ |
|---|---|
| Received during 2024-25 | 2,70,000 |
| Less: arrears of 2023-24 received | (16,500) |
| Less: advance for 2025-26 received | (24,000) |
| Received for 2024-25 itself | 2,29,500 |
| Add: received in advance last year for 2024-25 | 16,000 |
| Add: 2024-25 subscriptions still due (₹12,000 less last year's ₹2,700 still unpaid) | 9,300 |
| Subscriptions of 2024-25 | 2,54,800 |
Of the arrears of ₹19,200 brought forward, ₹16,500 was received, so ₹2,700 of last year's arrears is still unpaid and sits inside the ₹12,000 closing arrears (paper note).
Balance Sheet as at 31-3-2025 (extract): subscriptions in arrear ₹12,000 on the assets side; subscriptions received in advance ₹24,000 on the liabilities side.
Where the 6 marks sit
| # | Component | Marks |
|---|---|---|
| 1 | Opening arrears and advance correctly placed | 1 |
| 2 | Cash received, closing arrears and advance correctly placed | 2 |
| 3 | Income of ₹2,54,800 as the balancing figure | 2 |
| 4 | Treatment of the old arrears still unpaid (₹2,700) | 1 |
| Total | 6 |
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