Step IV Ascertain all capital receipts and capital payments from the additional information or Balance Sheets or by preparing the accounts of capital items and show the capital receipts on the receipts side and the capital payments on the Payments side of the Receipts and Payments Account Illustration: The Income and Expenditure Account of Star Club is as follows: 848 INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 315 DECEMBER, 1997 Cr. Rs. Dr. Expenditure To Salaries To General expenses To Depreciation To Surplus Rs Income 1,400 By Subscriptions 400 By Donations 240 400 1,600 840 2,440 2,440 The Secretary of the Club informs you that the above account was prepared after making the following adjustments: @ Subscriptions were outstanding on 1st January 1997 (for 1996) Rs. 160 out of which Rs. 144 were received in 1997. As on 1st January 1997 subscriptions received in advance amounted to Rs. 40, whereas on 31st December 1997 subscriptions received in advance Rs. 32. Also Rs. 56 worth subscriptions (for 1997) were outstanding as on Dec. 31, 1997 (im General Expenses were outstanding on 1st January 1997 Rs. 64 and on 31st December 1997 Rs. 72. Prepaid expenses amounted to Rs. 88 in the beginning and at close Rs. 144. (iv) Sundry assets as on 1st January 1997 Rs. 2,080 and after providing depreciation for the year 1997 the value of sundry assets was Rs. 2.160. (v) Cash in hand on 31st December 1997 was Rs. 480. You are required to prepare Receipts and Payments Account