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?
Answer & explanation
Correct answer: option 3
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.