From the Receipts and Payments account for the year ending 31.3.22, Locker Rent received is ₹17,050.Additional Information:Locker rent outstanding for the year 2020-21 was ₹3,050.Locker rent outstanding for the year 2021-22 is ₹1,500.Locker rent received in advance at the end of the current year (i.e., on 31.3.22) is ₹1,000.What amount of Locker Rent will be shown in the Income and Expenditure A/c?
- A₹14,500 Dr. to Income and Expenditure A/C
- B₹17,600 Dr. to Income and Expenditure A/C
- C₹14,500 Cr. to Income and Expenditure A/C
- D₹17,600 Cr. to Income and Expenditure A/C
Solution & Step-by-step Explanation
The calculation for income to be credited to the Income and Expenditure Account for the current year (2021-22) is as follows:
\begin{aligned}\text{Locker Rent received during the year} &= ₹17,050 \(-) \text{Outstanding of previous year (2020-21)} &= -₹3,050 \(+) \text{Outstanding of current year (2021-22)} &= +₹1,500 \(-) \text{Advance received at end of current year (31.3.22)} &= -₹1,000 \\hline\text{Locker Rent income for current year} &= ₹14,500\end{aligned}
Since Locker Rent is an item of income, it will be shown on the income side, which means it is Credited (Cr.) to the Income and Expenditure Account.
\begin{aligned}\text{Locker Rent received during the year} &= ₹17,050 \(-) \text{Outstanding of previous year (2020-21)} &= -₹3,050 \(+) \text{Outstanding of current year (2021-22)} &= +₹1,500 \(-) \text{Advance received at end of current year (31.3.22)} &= -₹1,000 \\hline\text{Locker Rent income for current year} &= ₹14,500\end{aligned}
Since Locker Rent is an item of income, it will be shown on the income side, which means it is Credited (Cr.) to the Income and Expenditure Account.