FA – May 2014 – L1 – SA – Q3 – Accounts of Not-for-Profit Entities

Preparation of the income and expenditure statement for a football club.

Question

The information below relates to ABC Football Club in respect of the year ended 31 October 2013:

Item	N’000
Rent and rates	2,500
Stadium repairs and maintenance	4,500
Match takings	20,000
State government grant and aid	25,000
Wages and salaries	15,000
Payment of match bonus	5,000
Transfer fees of players who left the club	12,000
Match expenses	3,500
Transfer fees of new players bought	8,000
Fines and penalties paid to NFF	3,000
Cash and bank balances at the beginning of the period	8,700
Sales proceeds of memorabilia	900
Prize money for winning FA cup	3,500
Motor running expenses	500
Donations received	9,500
Administration expenses	2,000
Printing and stationery	400
Communication	600
Honorarium	200

The following information is also relevant:
(i) Insurance premium owing N500,000.
(ii) The club is currently facing NFF disciplinary committee investigation for players’ and fans’ misconduct in respect of week 25 match between ABC and Kwara United. The club lawyers have stated in their last letter that it was highly probable that the club will be found liable, and based on past experience, the club could be fined up to N2,000,000 among other punishments.
(iii) Depreciation has been accurately calculated at N150,000 in respect of the accounting period.
(iv) Other match takings not yet remitted by the club’s agent amounted to N2,600,000.

You are required to:
Prepare the Club’s Statement of Income and Expenditure in vertical format for the year ended 31 October 2013.

Answer