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Question :

A club has the policy of capitalising 25% of its entrance fees. The amount of entrance fees capitalised during the year is Rs.50,000. The amount of entrance fees to be shown on credit side of Income and Expenditure A/c will be:

Option 1:

Rs.2,00,000

Option 2: Rs.2,50,000

Option 3: Rs.1,50,000

Option 4: Rs.1,00,000


Team Careers360 24th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: Rs.1,50,000


Solution : Entrance capitalised = Rs.50,000.
% of entrance fees capitalised = 25%.
Total entrance fees = Rs.50,000 X 100/25 = Rs.2,00,000.
% of entrance fees is to be credited to Income and Expenditure Account = 100% - 25% = 75%.
Entrance fees to be credited to Income and Expenditure Account = Rs.2,00,000 X 75% = Rs.1,50,000.
Hence, the correct option is 3.
 

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