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JAMB Principles of Accounts 2004 Question 29

Question 29

Not-for-Profit Organisations

Use the information below to answer questions 28 and 29.
On January 1, 2000, a club's assets and liabilities were as follows:
Club house ₦8,000
Subscription in arrears ₦300
Cash ₦1,000
Wages owed ₦100
The club has 50 members and annual subscription is ₦100 per member. Subscription received is ₦4,000 and this includes 1999 arrears of ₦200.
In the balance sheet, the subscription in arrears will be

  1. A.₦200
  2. B.₦300
  3. C.₦1,200
  4. D.₦1,300
Show the answer and explanation

Answer: D (₦1,300)

Explanation

For 2000, 50 × ₦100 = ₦5,000 is due and ₦4,000 − ₦200 = ₦3,800 was received, so ₦1,200 is owed. The ₦100 of 1999 arrears still unpaid is added: ₦1,300.