Read the following information and answer the question.
ABC Welfare Club has provided the following information on 31st March 2021.
Subscription received by the firm during the year ₹6,20,000. Details of which is as follows:
For the year 31st March 2020 30,000
For the year 31st March 2021 90%
For the year 31st March 2022 50,000
Amount of subscription in arrears as at 31st March 2020 was ₹45,000 out of which 20% was not receivable and to be written off.
What is the amount of subscription in arrears at the end of the year 2021?
Answer & explanation
Correct answer: option 4
The correct answer is option 4- ₹66,000.
Total subscription received = ₹6,20,000 which include 90% of this current year and 80,000 (30,000 + 50,000) for the last or future year.
So current year subscription is 6,20,000 - 80,000 = 5,40,000 which is 90%.
So, 100% is 5,40,000 X 90/100
= ₹6,00,000.
So subscription in arrears for the current year = 6,00,000 - 5,40,000
= ₹60,000
Subscription in arrears for the previous year is ₹45,000 out of which 20% is written off means 9,000. So o/s subscription for the year ending 31 March 2020 is 45,000 - 9,000 = 36,000
Out of 36,000, ₹30,000 is received in this year, so 36,000-30,000 = 6,000 is O/S for the previous year ending 31 March 2020.
Thus, amount of subscription in arrears at the end of the year 2021 = 60,000 + 6,000
= ₹66,000