Question : Prize Fund as on 31st March, 2017 = Rs 2,50,000
Donation for prizes received during the year 2017-2018 = Rs 1,20,000
10% prize fund investment as on 31st March, 2017 = Rs 2,00,000
Interest received on prize fund investment = Rs 16,000
Prizes awarded = Rs 1,15,000
Calculate the amount of prize fund after all adjustments as on 31st March 2018.
Option 1: Prize Fund balance to be shown on the Liabilities side of Balance Sheet Rs 2,75,000
Option 2: Prize Fund balance to be shown on the assets side of closing Balance Sheet Rs 2,75,000
Option 3: Prize Fund balance shown on the Liabilities side Rs 2,71,000
Option 4: Prize Fund Rs 2,71,000 balance shown on the Liabilities side of the Balance Sheet
Correct Answer: Prize Fund balance to be shown on the Liabilities side of Balance Sheet Rs 2,75,000
Solution : Prize Fund as on 31st March, 2017 = Rs 2,50,000 (+) Interest received on prize fund investment = Rs 20,000 (10% X Rs.2,00,000) (-) Prizes awarded = (Rs 1,15,000) (+) Donation for prizes received during the year = Rs 1,20,000 Amount of prize fund = Rs.2,75,000 Hence, the correct option is 1.
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Question : Prize Fund has opening balance of Rs 10,000 which is deposited in a fixed deposit in the bank and earned interest of Rs 1,500. Further donation of Rs 5,000 was received during the year. Rs 20,000 was spent on the distribution of prizes. How much will be shown in the balance
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