FA – L1 – Q84 – Preparation of not-for-profit accounts

The following balances have been obtained from the books of Unity Sports Club:

June 30, 20X8 June 30, 20X9
Building 6,024,000 6,024,000
Furniture 3,012,000 3,012,000
Books 1,129,500 1,129,500
Sports equipment 1,807,200 1,807,200
Investments
Advance subscription 86,000 92,000
Prepaid expenses 122,000 176,000
Expenses payable 186,900 207,600
Subscriptions receivable 326,000 357,000
Cash 1,204,800 1,586,500

The following information is also available in respect of the year ended June 30, 20X9:
(i) Depreciation for the year has been credited directly to the asset accounts. The rates of depreciation are as follows:

  • Building: 5%
  • Furniture and books: 10%
  • Sports equipment: 20%

(ii) The club had 600 members on June 30, 20X9. No fresh members were admitted during the year but 10 members left the club on January 1, 20X9. Subscription per member is GH¢ 500 per month.

Required:
(a) Summary of receipts and payments made during the year ended June 30, 20X9.
(b) Income and expenditure account for the year ended June 30, 20X9.

Receipt & payment account for the year ended June 30, 20X9

Receipts GH¢ Payments GH¢
Balance b/d 1,204,800 Addition to:
Subscription received 3,605,000 Building 753,000
Sports equipment 442,800
Investments made 436,000
General expenses (Balancing figure) 1,591,500
Balance c/d 1,586,500
Total 4,809,800 Total 4,809,800

Note that the subscriptions for 20X9 can be calculated as follows:
600 members for the whole year
600 × 12 months × GH¢ 500 per month = 3,600,000
10 members for the first 6 months only
10 × 6 months × GH¢ 500 per month = 30,000
Total: 3,630,000

Subscription account

GH¢ GH¢
Receipts Payments
Receivables – Balance b/d (subscriptions in arrears) 326,000 Payables – Balance b/d (subscriptions paid in advance) 86,000
Subscriptions for 20X9 3,630,000 Cash received 3,605,000
Subscriptions paid in advance c/d 92,000 Subscriptions in arrears c/d 357,000
Total 4,048,000 Total 4,048,000