Theory question 103
Not-for-Profit Organisations3. The following information was obtained from the books of Family Support Club for the year ended 30th September, 1995.
Receipts: Cash in hand 1/10/94 N450; Balance at bank 1/10/94 N4,800; Transfer from bank deposit A/C N13,050; Members' Subscription N3,960; Donations N20,400; Easter picnic N10,200; total N52,860
Payments: Staff salary N9,000; General repairs and maintenance N4,200; Transfer to bank Deposit Account N13,500; Purchase of Equipment N15,000; Other expenses N3,000; Insurance N600; Easter picnic expenses N5,400; Cash in hand c/d N660; Balance at Bank c/d N1,500; total N52,860
Additional Information:
(a) The net book value of fixed assets as at 30th September, 1994 was as follows: Leasehold premises N72,000; Equipment N24,000
(b) Provide for depreciation on fixed assets as follows: Leasehold premises N3,000; Equipment N1,800
(c) Bank deposit balance as at 30/9/94 was N24,360. Interest of N900 has been credited to the account during the year and was not included in the above receipts.
(d) A donor of N7,500 had specifically requested that his donation should be used only for the purchase of double-bunk beds for the Day Care Centre. This purchase is yet to be made.
(e) Other assets and liabilities were as follows (30/9/94; 30/9/95): Creditors (repairs) N600; –. Creditors (expenses) N450; N540. Subscriptions (outstanding) N1,200; N1,320. Insurance prepaid N150; N180.
You are required to prepare:
(i) Statement of affairs as at 30/9/94; (ii) Deposit Account as at 30/9/95; and (iii) Income and Expenditure Account for the year ended 30/9/95.
Show the model answer
(i) Statement of affairs at 30/9/94: leasehold 72,000; equipment 24,000; bank deposit 24,360; subscriptions owing 1,200; insurance prepaid 150; cash 450; bank 4,800 = 126,960. Less creditors: repairs 600, expenses 450 = 1,050. Accumulated fund 125,910.
(ii) Deposit account: balance b/f 24,360 + transfer in 13,500 + interest 900 = 38,760; less transfer out 13,050; balance c/d 25,710.
(iii) Income and expenditure account for the year ended 30/9/95
Income: subscriptions 3,960 − 1,200 + 1,320 = 4,080; donations 20,400 − 7,500 (to a special bed fund) = 12,900; interest 900; Easter picnic 10,200 less expenses 5,400 = 4,800 surplus; total 22,680.
Expenditure: staff salary 9,000; repairs 4,200 − 600 = 3,600; other expenses 3,000 − 450 + 540 = 3,090; insurance 600 + 150 − 180 = 570; depreciation leasehold 3,000 and equipment 1,800; total 21,060.
Surplus 1,620 to the accumulated fund.
Adjust each cash figure for amounts owing or prepaid at both dates, and keep a donation given for a special purpose out of income.