Theory question 101
Not-for-Profit OrganisationsSection A (compulsory)
The treasurer of Annang Football Club presents to you the following information relating to the Financial transactions of the Club for the year ended 31st December, 1993.
Receipt and Payment Account for the year ended 31st December, 1993
Receipts: Bank Balance 1/1/93 ₦1,048; Subscription Received for: 1992 ₦110; 1993 ₦2,472; 1994 ₦80; Bar Sales ₦11,256; Donations received ₦240; total ₦15,206
Payments: Payments for bar supplies ₦7,924; Wages: Groundsman and Assistant ₦1,878; Barmen ₦1,248; Bar expenses ₦468; Repairs to stands ₦238; Ground unkeep ₦458; Secretarial expenses ₦276; Transport costs ₦610; Bank Balance 31/12/93 ₦2,106; total ₦15,206
Additional information: (a) (31/12/92 | 31/12/93): Stock in bar at cost ₦992 | ₦1,116; Owing for bar supplies ₦588 | ₦680; Bar expenses owing ₦50 | ₦72; Transport cost owing – | ₦130 (b) The value of Fixed Assets as at 31st December, 1992 was: Land ₦8,000; Football stands ₦4,000; Equipment ₦1,100 (c) Depreciation is to be charged on straight line method as follows: Football stands 10% per annum; Equipment 20% per annum (d) Subscription owing by members were as follows: 31st December 1992 ₦110; 31st December 1993 ₦132
You are required to: (i) Calculate the Accumulated fund as at 31st December, 1992. (ii) Prepare the Bar Trading, and Expenditure Account for the year ended 31st December 1993. (iii) Prepare the Balance Sheet as at the date.
Show the model answer
(i) Accumulated fund at 31 December 1992: land 8,000 + stands 4,000 + equipment 1,100 + bar stock 992 + subscriptions owing 110 + bank 1,048 = 15,250; less owing for bar supplies 588 and bar expenses 50 = ₦14,612
(ii) Bar Trading Account: bar sales 11,256; purchases 7,924 + 680 − 588 = 8,016; cost of sales 992 + 8,016 − 1,116 = 7,892; gross profit 3,364; less barmen's wages 1,248 and bar expenses (468 + 72 − 50) 490; bar profit ₦1,626
Income and Expenditure Account for the year ended 31 December 1993: income: subscriptions (2,472 + 132 owing) 2,604; donations 240; bar profit 1,626; total 4,470
Expenditure: groundsman's wages 1,878; repairs to stands 238; ground upkeep 458; secretarial 276; transport (610 + 130) 740; depreciation: stands 400, equipment 220; total 4,210
Surplus ₦260
(iii) Balance Sheet as at 31 December 1993: land 8,000; stands 3,600; equipment 880; fixed assets 12,480; bar stock 1,116; subscriptions owing 132; bank 2,106; total ₦15,834
Accumulated fund 14,612 + 260 = 14,872; creditors for bar supplies 680; bar expenses owing 72; transport owing 130; subscriptions in advance 80; total ₦15,834
Subscriptions received for 1992 settle last year's arrears and those for 1994 are a liability; only 1993's belong in this year's income.