The Question : Following information is given by Alchemy Medical College, Library department for the year 2020-21.
| Particulars | Amount (₹) |
| Books and Journals Fund as on 1.4.2020 | 4,50,000 |
| 7% Books and Journals Fund Investments as on 1.4.2020 | 4,00,000 |
| Interest on Books and Journals Fund Investments | 13,000 |
| Donations for Books and Journals | 20,000 |
| Books Purchased | 70,000 |
| General Fund as on 1.4.2020 | 10,00,000 |
Show the accounting treatment of the above-mentioned items in the Balance Sheet of the Alchemy Medical College as at 31st March,2021.
Solution for the question :
An Extract of Balance Sheet as at 31st March, 2021Liabilities₹Assets₹General Fund 10,00,0007% Books & Journals FundAdd: Books and Journals Fund 70,00010,70,000 Investment4,00,000 Accrued Interest on Books andBooks & Journals Fund 4,50,000Journals Fund Investment15,000 Add : Donations for Books & Journals 20,000Books70,000 Interest on Books & Journals Investment 13,000Accrued Interest 15,000 28,000Less : Books purchased 70,0004,28,000Working Note: Interest on Books and Journals Investments = 4,00,000 x 7/100 = 28,000 Accrued Interest = 28,000 – 13,000= 15,000
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