Entrance Fees received amounted to ₹40,000, 30% of which is to be capitalised.

How much amount will be shown in Income and Expenditure Account?

₹28,000

The correct answer is option 3- ₹28,000.

Entrance fees = 40,000
30% is capitalised
So, 70% is revenue.

Revenue amount is shown in the income and expenditure account and capitalised amount is shown in the balance sheet.

Capitalised amount = 40,000 X 30/100
                            = ₹12,000

Revenue amount = 40,000 x 70/100
                         = 28,000

So, ₹28,000 will be shown in Income & Expenditure Account and ₹12,000 will be shown in balance sheet.