The opening balance of the prize fund was ₹1,00,000. During the year, donations received towards this fund amounted to ₹15,400, the amount spent on prizes was ₹12,300, prize fund investment is ₹40,000 and interest received on prize fund investment was ₹4,000.
What will be the closing balance of the prize fund?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- ₹1,07,100.
Prize fund opening balance = 1,00,000
Add: donation towards fund = 15,400
Less: Prize awarded = 12,300
Add: Income from investments = 4,000
= (1,00,000 + 15,400 - 12,300 + 4,000)
= 1,07,100
This 1,07,100 is shown on liability side as closing balance of the prize fund.
Prize fund investments are assets and shown on the assets side of the balance sheet.