Theory question 103
Not-for-Profit OrganisationsThe Receipts and Payments Accounts of Under 21 Youth Club for the year ended 31st December, 1991 is as follows:
Receipts: Balance –1st January, 1991 ₦200; Subscription received:- for 1991 ₦3,600; for 1992 ₦250; Receipts from Bar ₦4,500; Receipt from Dance ₦500; Sundry receipts ₦400; total ₦9,450
Payments: Bar supplies ₦2,850; Wages ₦350; General Expenses ₦400; Printing and Stationery ₦120; Equipment ₦350; Furniture and Fittings ₦300; Repairs ₦200; Balance 31st December ₦4,880; total ₦9,450
You are given the following additional information (1st January 1991 | 31st December 1991): Equipment ₦2,500 | ₦2,850; Furniture and Fittings ₦2,000 | ₦2,300; Stock- Bar ₦1,200 | ₦3,200; Bar Supplies ₦2,400 | ₦5,600
You are required to prepare: (a) Statement of affairs as at January, 1991 (b) Bar Trading Accounts and (c) Income and Expenditure Account for the year ended 31st December, 1991
Show the model answer
(a) Statement of Affairs as at 1 January 1991: equipment 2,500; furniture 2,000; bar stock 1,200; cash 200; total 5,900; less owing for bar supplies 2,400; accumulated fund ₦3,500
(b) Bar Trading Account: bar purchases = paid 2,850 + owing at end 5,600 − owing at start 2,400 = 6,050; cost of sales 1,200 + 6,050 − 3,200 = 4,050; add bar wages 350 = 4,400; bar takings 4,500; profit on bar ₦100
(c) Income and Expenditure Account for the year ended 31 December 1991: income: subscriptions (1991 only) 3,600; dance 500; sundry receipts 400; bar profit 100; total 4,600
Expenditure: general expenses 400; printing and stationery 120; repairs 200; total 720 (no depreciation: closing equipment and furniture equal opening values plus purchases)
Surplus ₦3,880
(The ₦250 subscription for 1992 is income received in advance, and equipment and furniture bought are capital items.)
The 'bar supplies' balances are amounts owed to bar suppliers, so use them to find the true bar purchases.