Question 3 OR (a)

Restaurant Trading Account of a club

6 marks

Time to write: About 12 minutes
Topic: Not-for-profit organisations
Notes: Crux notes

Question

Question 3 OR (a) · 6 marks

Shimla cricket club gives you the information below about its restaurant for the year ended 31st March 2026:

Particulars	Amount (Rs)	Particulars	Amount (Rs)
Opening stock	11,700	Closing stock	13,500
Restaurant taking (Sales)	10,84,800	Restaurant purchase	6,14,400
Wages (including Rs 1,50,000 for restaurant)	2,44,500	Fuel	53,100
China glass cutlery on 1.04.2026	7,500	Depreciation on China cutlery @ 20% p.a.

Prepare the restaurant trading A/C, and show the Income and Expenditure A/C extract and the extract of Balance sheet for the year ended 31.03.2027.

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

12 minfor 6 marks

Read from the question

show … sheetProper formats (heading, date, both sides): post the plain items, then each adjustment, and balance last.

What the paper leaves open

The accounts are for the year ended 31.03.2027, as asked; the information headed "the year ended 31st March 2026" is read as relating to that same year, and the china glass cutlery is held from 1.04.2026, its first day, so a full year's depreciation at 20% is charged.
Only the ₹1,50,000 of wages stated for the restaurant are charged to it.

Write it in this order

Read the data; tick every adjustment as you plan it 1 min
1 Restaurant Trading Account 3 marks 5 min
2 Income and Expenditure Account extract 1 mark 2 min
3 Balance Sheet extract 2 marks 3 min
Check: every adjustment used, both sides agree, dates in 1 min

123

Short on time? Step 1 carries 3 of the 6 marks: guard its minutes.

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.

Basis of the answer

A club's trading activity, such as a bar or restaurant, is shown in its own Trading Account, and only the profit (or loss) goes to the Income and Expenditure Account; the DU text prepares a club's Bar Trading Account this way.
The Income and Expenditure Account is a nominal account of the year's income and expenditure.
Only the ₹1,50,000 of wages stated for the restaurant are charged to it; the rest belong to the club's general expenditure. The china glass cutlery is held from 1.04.2026, the first day of the year, so a full year's depreciation at 20% (₹1,500) is charged. In the balance sheet the cutlery is carried at cost less accumulated depreciation, ₹7,500 − ₹1,500 = ₹6,000.

Restaurant Trading Account for the year ended 31.03.2027

3 marks

Dr	₹	Cr	₹
To Opening stock	11,700	By Restaurant takings (sales)	10,84,800
To Restaurant purchases	6,14,400	By Closing stock	13,500
To Wages (restaurant)	1,50,000
To Fuel	53,100
To Depreciation on china glass cutlery (20% of 7,500)	1,500
To Profit transferred to Income and Expenditure A/c	2,67,600
	10,98,300		10,98,300

Dr	₹
To Opening stock	11,700
To Restaurant purchases	6,14,400
To Wages (restaurant)	1,50,000
To Fuel	53,100
To Depreciation on china glass cutlery (20% of 7,500)	1,500
To Profit transferred to Income and Expenditure A/c	2,67,600
	10,98,300
Cr	₹
By Restaurant takings (sales)	10,84,800
By Closing stock	13,500
	10,98,300

Income and Expenditure Account (extract) for the year ended 31.03.2027

Expenditure	₹	Income	₹
To Wages (2,44,500 − restaurant 1,50,000)	94,500	By Profit from restaurant	2,67,600

Balance Sheet (extract) as at 31.03.2027

Liabilities	₹	Assets	₹
		Restaurant stock	13,500
		China glass cutlery (7,500 − 1,500)	6,000

If the cutlery were read as bought after the year (the other reading in the paper note), there would be no depreciation and the restaurant's profit would be ₹2,69,100.

Where the 6 marks sit

#	Component	Marks
1	Restaurant Trading Account	3
2	Income and Expenditure Account extract	1
3	Balance Sheet extract	2
	Total	6

Keyboard: ← → previous and next question, / search

Report a problemopens an email to admin@getkunji.com with the question ID7519-Q3aORalready filled in.