Question

A club received aid from state government for Rs 10,00,000 for construction of building on 1-5-16 and from an other organisation received Rs 50,000 aid for operating its activities on 1-6-16. The club has completed its building upto 31 March, 2017 and spent Rs 10,25,000 on it. Now the above transactions will be shown in income and expenditure account for . the year ending 31st March, 2017 and balance sheet on that date.

Answer 1

Working Note:

1. Rs 10,00,000 Grant by Govt, to building construction is a special donation. So,it is a capital nature receipts it will shown in liabilities side in adding capital fund of Balance Sheet.
2. Receipts of Rs 50,000 from other activities is a revenue nature income. So, it will shown in income side of Income and Expenditure Account.
3. Rs 10,25,000 in Heading of Building of Assets Side, if Building is incomplete, it will shown in separately Building Fund.