Following is the Income and Expenditure Account of Victoria Club for the year ending 31st March, 2008
Expenditures
Incomes
To Salaries & Wages
19,000
By Subscription
To Misc. Expenses (including Insurance)
To Audit Fees
2,000
By Entrance Fee Received
30,000
1,000
1,000
By Annual Sports Income
To Chief Executives Honorarium
4,000
receipts
6,000
To Printing & Stationery
1,800
Less: Expenses
3.000
3,000
To Annual Day Celebration Exp.
6,000
Less Donation
4.000
2,000
To Interest on Bank Loan
600
To Depreciation on Sports Equipment
1,200
To Excess of Income over Expenditure
2,400
34,000
34,000
Additional Information:
31.3.07 (2)
31.3.08 (2)
(1) Subscription Outstanding
2,400
3,000
(2) Subscription received in advance
1,800
1,080
(3) Salaries Outstanding
1,600
1,800
(4) Sports equipment (after deducting depreciation)
10,400
10,800
(5) Prepaid Insurance
240
(6) Cash in hand
6,400
The Club owned a sports ground of ₹ 40,000
The Club took a loan of 8,000 from a bank during the year 2006-07, which was not paid in 2007-08.
Audit fee of 2007-08 was outstanding, but Audit fees of 800 for 2006-07 was paid in 2007-08
Prepare Receipts and Payments Account for the year ending 31st March, 2008 and a Balance Sheet as on that date
September 12, 2024
Question 5
Mr. Y aged 21 years, lost his mental balance after the death of his parents in an
accident. He was left with his grandmother aged 85 years, incapable of walking
and dependent upon him. Mr. M their neighbour, out of pity, started supplying
food and other necessaries to both of them. Mr. Y and his grandmother used to
live in the house built by his parents. Mr. M also provided grandmother some
financial assistance for her emergency medical treatment. After supplying
necessaries to Mr. Y for four years, Mr. M approached the former asking him to
payback 15 Lakhs inclusive of 7 Lakhs incurred for the medical treatment of
the lady (grandmother). Mr. Y pleaded that he has got his parent's jewellery to
sell to a maximum value of ` 4 Lakhs, which may be adjusted against the dues. Mr.
M refused and threatened Mr. Y of legal suit to be brought against for recovering
the money.
Now, you are to decide upon based on the provisions of the Indian Contract Act,
1872:
(i) Will Mr. M succeed in filing the suit to recover money? Elaborate the
related provisions?
(ii) What is the maximum amount- of money that can be recovered by Mr.
M?
iii)Shall the above provisions attract if treatment was given to grandmother?
September 12, 2024
