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CMA Foundation · Fundamentals of Financial and Cost Accounting · Financial Statements of a Not-for-Profit Organisation

Sunrise Club's Capital Fund on 1 April 2023 was ₹5,00,000. During 2023-24 it received entrance fees of ₹20,000 (to be capitalised), life membership fees of ₹30,000 (to be capitalised) and had a deficit of ₹12,000 on Income and Expenditure Account. What is the Capital Fund on 31 March 2024?

The closing Capital Fund is ₹5,38,000. Opening fund of ₹5,00,000 is increased by capitalised entrance fees of ₹20,000 and life membership fees of ₹30,000, then reduced by the deficit of ₹12,000 transferred from the Income and Expenditure Account.

  1. A₹5,38,000Correct
  2. B₹5,62,000
  3. C₹5,50,000
  4. D₹5,18,000

Explanation

Capital Fund = 5,00,000 + 20,000 + 30,000 - 12,000 = ₹5,38,000. The option ₹5,62,000 wrongly adds the deficit instead of deducting it. Capitalised receipts are added directly to the fund.

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