Income and expenditure

FA – L1 – Q90 – Preparation of not-for-profit accounts

Explain the IFRS Foundation and list two objectives.

Question

(a) What is the International Financial Reporting Standard (IFRS) foundation? Mention two (2) objectives of the foundation.

(b)(i) The following information relate to “Hope Rising” Youth Club for the accounting period of 20X9.

Subscription owing for 20X9	GH₵
Payable for end of year party	3,000
Payables for repairs – equipment	2,000
Payables for repairs – vehicle	1,000

Payments	GH₵
Vehicle running expenses	6,000
Electricity expenses	3,000
End of year party expenses	10,000
Salaries and wages	25,000
Printing and stationery	3,000
Cleaning expenses	6,000

Receipts	GH₵
Car park renting	10,000
Sales of party tickets	6,000
Donation from friends of the club	15,000
Subscription received: 20X8	6,000
Subscription received: 20X9	30,000

Additional Information:
(i) Cash in hand as at 01/01/20X9: GH₵18,000
(ii) Subscription owing as at 01/01/20X9: GH₵8,000
(iii) Any subscription outstanding is written off in the following year if it is not paid.

You are required to prepare:
(i) Receipts and payments account for the year ended 31st December, 20X9.

(ii) Subscription account

(iii) Income and expenditure for the year ended 31st December, 20X9

Answer

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Tags: Financial Statements, Income and expenditure, Not-for-profit accounts
Level: Level 1

Topic: Preparation of not-for-profit accounts

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

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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

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

Prepare receipts and payments and income and expenditure accounts for Unity Sports Club for the year ended June 30, 20X9, using provided balances and membership data.

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

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Tags: Club accounting, Depreciation, Financial Statements, Income and expenditure, Not-for-profit accounts, Receipts and payments, Subscriptions
Level: Level 1

Topic: Preparation of not-for-profit accounts

Tag (SQ): Income and expenditure

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FA – L1 – Q90 – Preparation of not-for-profit accounts

Explain the IFRS Foundation and list two objectives.

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.

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

Prepare receipts and payments and income and expenditure accounts for Unity Sports Club for the year ended June 30, 20X9, using provided balances and membership data.

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FA – L1 – Q90 – Preparation of not-for-profit accounts

Explain the IFRS Foundation and list two objectives.

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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.

You're reporting an error for "FA – L1 – Q86 – Preparation of not-for-profit accounts"

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

Prepare receipts and payments and income and expenditure accounts for Unity Sports Club for the year ended June 30, 20X9, using provided balances and membership data.

You're reporting an error for "FA – L1 – Q84 – Preparation of not-for-profit accounts"

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