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CA Foundation · Accounting · Financial Statements of Not-for-Profit Organisations

Asha Welfare Society had Capital Fund of ₹5,00,000 on 1 April 2024. During 2024-25 its income was ₹7,20,000 (including ₹50,000 of legacy received, which is to be capitalised) and its revenue expenditure was ₹6,45,000. Entrance fees of ₹30,000 are also to be capitalised and are not included in the income above. What is the Capital Fund on 31 March 2025?

The closing Capital Fund is ₹6,05,000. Revenue income excluding the legacy is ₹6,70,000, giving a surplus of ₹25,000 after expenditure of ₹6,45,000. Adding the surplus, the capitalised legacy of ₹50,000 and entrance fees of ₹30,000 to the opening ₹5,00,000 gives ₹6,05,000.

  1. A₹5,75,000
  2. B₹6,05,000Correct
  3. C₹5,25,000
  4. D₹5,55,000

Explanation

Remove the legacy from income: 7,20,000 − 50,000 = 6,70,000 revenue income. Surplus = 6,70,000 − 6,45,000 = 25,000. Capital Fund = 5,00,000 + 25,000 + legacy 50,000 + entrance fees 30,000 = 6,05,000. Option A is wrong because it leaves out the entrance fees of ₹30,000.

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