How will you deal with the following items while preparing for the Bombay Women Cricket Club, its Income and Expenditure Account for the year ending 31st March 2021, and its Balance Sheet, on the same date : Donation for the Pavilion construction Rs. 12,25,000, Expenditure incurred Rs. 10,80,000, Total estimate Rs. 25,00,000.
How will you deal with the following items while preparing for the Bombay Women Cricket Club, its Income and Expenditure Account for the year ending 31st March 2021, and its Balance Sheet, on the same date : Donation for the Pavilion construction Rs. 12,25,000, Expenditure incurred Rs. 10,80,000, Total estimate Rs. 25,00,000.
Solution
✅ Correct Option: 1
Donation for Pavilion is specific/capital in nature. Unspent balance = 12,25,000 - 10,80,000 = 1,45,000 is shown on Liability side of Balance Sheet as Pavilion Fund balance. Expenditure of 10,80,000 appears against the fund on liability side too.
Note: This is a Not-for-Profit Organisation item; we classified it under Partnership Accounting as the nearest available subtopic.
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