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:
Rent received during the year &= ₹17,050 $-) Outstanding of previous year (2020-21) &= -₹3,050 $+) Outstanding of current year (2021-22) &= +₹1,500 $-) Advance received at end of current year (31.3.22) &= -₹1,000 \Rent income for current year &= ₹14,500
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.
Rent received during the year &= ₹17,050 $-) Outstanding of previous year (2020-21) &= -₹3,050 $+) Outstanding of current year (2021-22) &= +₹1,500 $-) Advance received at end of current year (31.3.22) &= -₹1,000 \Rent income for current year &= ₹14,500
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.