Theory question 108
Not-for-Profit Organisations8. The following is a summary of the Cash Book of Agubiko Country Club:
Receipts: Balance 1/4/2001 N23,700; Members subscriptions N178,600; Entrance fees N16,000; Bar takings N284,000; Competition receipts N38,200; Sundry receipts N400; total N540,900
Payments: Staff wages N66,900; Bar supplies N252,000; Rent for 18 months to 30/6/2002 N36,000; Rates N14,000; Secretary's salary N15,600; Electricity and telephone N68,500; Competition prizes N18,500; Deposit with Onyi Community Bank N40,000; Balance – 31/3/2002 N29,400; total N540,900
Additional information:
(a) The assets of the club as at 1st April, 2001, were: Furniture and equipment N240,000; Bar stocks N13,000; Prizes at hand N4,000; Owing for bar supplies N26,000
(b) The assets of the club as at 31st March, 2002, were: Bar stocks N15,000; Prizes N2,500; Owing for bar supplies N28,000
(c) Subscriptions outstanding as at 31st March, 2002, totalled N5,000. Subscriptions received during the year under review included N3,500 in respect of the previous year and N2,000 in respect of the year beginning 1st April, 2002. (d) Interest on the deposit with Onyi Community Bank for the year 31st March, 2002, amounting to N2,400 had not been received. (e) Provide for depreciation on furniture and equipment at 10%. You are required to prepare: (i) Statement showing the Accumulated Fund as at 1st April, 2001; (ii) Income and Expenditure Account for the year ended 31st March, 2002; and (iii) Balance Sheet as at that date.
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Rent is 2,000 a month: the 18 months to 30/6/2002 include 3 months before 1/4/2001 (owing at the start, 6,000), 12 months of this year (24,000) and 3 months prepaid (6,000).
(i) Accumulated fund 1/4/2001: furniture 240,000 + bar stock 13,000 + prizes 4,000 + subscriptions owing 3,500 + cash 23,700 = 284,200; less bar creditors 26,000 and rent owing 6,000; accumulated fund 252,200.
(ii) Income and expenditure for the year ended 31/3/2002
Income: subscriptions 178,600 − 3,500 − 2,000 + 5,000 = 178,100; entrance fees 16,000; bar profit 32,000 (takings 284,000 − cost 252,000, where purchases = 252,000 + 28,000 − 26,000 = 254,000 and cost = 13,000 + 254,000 − 15,000); competition surplus 18,200 (38,200 − prizes used 4,000 + 18,500 − 2,500 = 20,000); sundry receipts 400; interest receivable 2,400; total 247,100.
Expenditure: staff wages 66,900; rent 24,000; rates 14,000; secretary's salary 15,600; electricity and telephone 68,500; depreciation 24,000; total 213,000. Surplus 34,100.
(iii) Balance sheet 31/3/2002: furniture 240,000 − 24,000 = 216,000; deposit 40,000; bar stock 15,000; prizes 2,500; subscriptions owing 5,000; interest receivable 2,400; rent prepaid 6,000; cash 29,400 = 316,300. Less bar creditors 28,000 and subscriptions in advance 2,000 = 286,300. Accumulated fund 252,200 + surplus 34,100 = 286,300.
Treat the bar and competitions as trading sections and bring only their net results into income and expenditure.