FA – L1 – Q86 – Preparation of not-for-profit accounts

Prepare income and expenditure account and statement of financial position for Sunridge Golf Club for the year ended 31 March 20X9.

Question

The treasurer of the Sunridge Golf Club has prepared the following receipts and payments account for the year ended 31 March 20X9.

	N₦(000)
Balance at 1 April 20X8	682	Functions	305
Subscriptions	2,930	Repairs	65
Functions	367	Telephone	67
Sale of land	1,600	Extension of club house	600
Bank interest	60	Furniture	135
Bequest (legacy)	255	Heat and light	115
Sundry income	46	Salary and wages	2,066
		Sundry expenses	110
		Balance at 31 March 20X9	2,520
	5,940		5,940

(a) Subscriptions received included N₦65,000 which had been in arrears at 31 March 20X8 and N₦35,000 which had been paid for the year commencing 1 April 20X9.
(b) Land sold had been valued in the club’s books at cost N₦500,000.
(c) Accrued expenses

	31 March 20X8 N₦(000)	31 March 20X9 N₦(000)
Heat and light	32	40
Salaries and wages	12	14
Telephone	14	10
Total	58	64

(d) Depreciation is to be charged on the original cost of assets appearing in the books at 31 March 20X9 as follows:

Buildings: 5%
Fixtures and fittings: 10%
Furniture: 20%

(e) The following balances are from the club’s books at 31 March 20X8:

Land at cost: N₦4,000,000
Buildings at cost: N₦3,200,000
Buildings allowance for depreciation: N₦860,000
Fixtures and fittings at cost: N₦470,000
Fixtures allowance for depreciation: N₦82,000
Furniture at cost: N₦380,000
Furniture allowance for depreciation: N₦164,000
Subscriptions in arrears (including N₦15,000 irrecoverable – member had emigrated): N₦80,000
Subscriptions in advance: N₦30,000

Required:
Prepare an income and expenditure account for the year ended 31 March 20X9 and a statement of financial position as at that date.

Answer

Sunridge Golf Club: Income and expenditure account for year ending 31 March 20X9

Income	N₦(000)	N₦(000)
Functions surplus (367 – 305)	62
Sale of land (1,600 – 500)	1,100
Bank interest	60
Bequest	255
Sundry income	46
Subscriptions (W1)	2,860
Total Income		4,383
Expenditure
Irrecoverable debts	15
Repairs	65
Telephone (67 – 14 + 10)	63
Heat and light (115 – 32 + 40)	123
Salaries and wages (2,066 – 12 + 14)	2,068
Sundry expenses	110
Depreciation – building	190
Depreciation – furniture	103
Depreciation – fixtures and fittings	47
Total Expenditure		2,859
Surplus for the year		1,524

Sunridge Golf Club: Statement of financial position as at 31 March 20X9

Non-current assets	Cost N₦(000)	Accumulated depreciation N₦(000)	Net N₦(000)
Land (4,000 – 500)	3,500	–	3,500
Buildings (W3)	3,800	(1,050)	2,750
Fixtures and fittings (W4)	470	(129)	341
Furniture (W5)	515	(267)	248
Total Non-current assets	8,285	(1,446)	6,839
Current assets
Subscriptions in arrears			65
Bank			2,520
Total Current assets			2,585
Total Assets			9,424
Equity and liabilities
Accumulated fund (W2)			7,618
Surplus for the year			1,524
Total Equity			9,142
Current liabilities
Accruals			64
Subscriptions in advance			35
Total Current liabilities			99
Total Equity and liabilities			9,241

Workings

W1: Subscriptions account

	N₦(000)		N₦(000)
Subs in arrears b/d	80	Subs in advance b/d	30
Income and expenditure	2,860	Bank	2,930
Subs in advance c/d	35	Irrecoverable debts	15
Total	2,975	Total	2,975

W2: Opening statement of affairs 20X8

Assets	N₦(000)
Bank	682
Subscriptions in arrears	80
Land	4,000
Buildings (3,200 – 860)	2,340
Fixtures (470 – 82)	388
Furniture (380 – 164)	216
Total Assets	7,706
Liabilities
Accruals (58 + 30)	(88)
Net Assets (Accumulated fund)	7,618

W3: Buildings

	Cost N₦(000)	Accumulated depreciation N₦(000)
Balance b/d	3,200	860
Extension to clubhouse	600
Depreciation (5% × 3,800)		190
Balance c/d	3,800	1,050

W4: Fixtures and fittings

	Cost N₦(000)	Accumulated depreciation N₦(000)
Balance b/d	470	82
Depreciation (10% × 470)		47
Balance c/d	470	129

W5: Furniture

	Cost N₦(000)	Accumulated depreciation N₦(000)
Balance b/d	380	164
Additions	135
Depreciation (20% × 515)		103
Balance c/d	515	267

Tags: Accruals, Adjustments, Club accounting, Depreciation, Financial Statements, Income and expenditure, Non-profit organizations, Not-for-profit, Statement of Financial Position, Subscriptions
Level: Level 1

Topic: Preparation of not-for-profit accounts

Uploader: Samuel Duah