Theory question 106
Not-for-Profit OrganisationsThe following information was extracted from the books of Egbeyemi Club of Aiyetoro, for the year ended 31st December, 1986.
Receipts: Subscription ₦6,900; Donations ₦9,600; Interest Received ₦240
Payments: Salaries ₦2,250; Scholarship ₦2,220; Drugs for the handicapped ₦2,070; Printing and stationery ₦510; Office Furniture ₦3,090; Investments ₦4,500
Totals: ₦14,640, ₦14,640
You are also informed as follows: (a) Subscriptions outstanding with members ₦300 (b) Accrued expenses: (i) Salaries ₦300 (ii) Scholarship ₦960 (iii) Drugs ₦180 (iv) Printing and Stationery ₦240
You are required to prepare for the Club (a) Income and Expenditure Accounts, and (b) Balance Sheet as at 31st December, 1985.
Show the model answer
Income and Expenditure Account for the year ended 31 December 1986
Income: subscriptions 6,900 + 300 = 7,200; donations 9,600; interest 240; total 17,040
Expenditure: salaries 2,250 + 300 = 2,550; scholarship 2,220 + 960 = 3,180; drugs 2,070 + 180 = 2,250; printing and stationery 510 + 240 = 750; total 8,730
Surplus of income over expenditure = ₦8,310
Balance Sheet as at 31 December 1986
Fixed assets: office furniture 3,090; investments 4,500
Current assets: subscriptions in arrears 300; cash/bank (receipts 16,740 − payments 14,640) 2,100
Total assets ₦9,990
Current liabilities (accrued): salaries 300, scholarship 960, drugs 180, printing 240 = 1,680
Accumulated fund (surplus) ₦8,310; 8,310 + 1,680 = ₦9,990
Furniture and investments are capital items for the balance sheet, not expenditure.