- 20 Marks
FA – L1 – Q84 – Preparation of not-for-profit accounts
Question
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.
Answer
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 |
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