FA – May 2015 – L1 – Q5 – Accounts of Not-for-Profit Entities

Prepare subscriptions account, income and expenditure account, and statement of financial position for a sports club using given data.

Question

Success Sports Club had a membership strength of 140 members who paid an annual subscription of N20,000 each for the year 2014. The receipts and payments account shows the following:

Receipts	N
Opening cashbook balance	120,000
Subscription	2,900,000
Donations	500,000
Sale of games tickets	450,000
Total receipts	3,970,000

Payments	N
Cost of games	270,000
Rent	20,000
Groundman’s wages	24,000
Cost of refreshment	49,000
Squash racquets	60,000
Hockey sticks	100,000
Games trophies	120,000
Annual awards	1,000,000
Total payments	1,643,000

Additional information:

Details	31/12/2013 (N)	31/12/2014 (N)
Subscriptions outstanding	300,000	250,000
Subscriptions in advance	100,000	150,000
Sports equipment	400,000	–

Sports equipment is to be depreciated at 50% annually.

You are required to prepare:

a. Subscriptions account (3 Marks)
b. Income and Expenditure Account for the year ended 31 December 2014 (7 Marks)
c. Statement of Financial Position as at 31 December 2014 (10 Marks)

Answer

(a) Subscriptions Account