Theory question 106
Not-for-Profit OrganisationsBabou Social Club was formed on April 1, 2013 with 50 members, each paying an annual subscription of D12. The following information were extracted from the books of the club on 31st March, 2014: (i) Amount realized during inauguration - D3,000; expenses on inauguration D1,000. (ii) All members paid their subscription with the exception of five members who were still owing by 31st March, 2014. (iii) Gate fees from organized football match were D500 and expenses incurred D300. (iv) Proceeds from end of the year dance amounted to D4,000 and expenses on dance D2,000. (v) Honorarium to officers amounted to D520 and sundry expenses D1,120. (vi) Amount paid for damages to furniture during dance D300.
You are required to prepare for the year ended 31st March, 2014: (a) Receipts and Payments Account. (b) Income and Expenditure Account.
Show the model answer
(a) Receipts and Payments Account (D): Receipts - inauguration 3,000; subscriptions (45 × 12) 540; football match 500; dance 4,000 = 8,040.
Payments - inauguration expenses 1,000; football expenses 300; dance expenses 2,000; damages 300; honorarium 520; sundry expenses 1,120 = 5,240. Balance c/d 2,800.
(b) Income and Expenditure Account (D): Income - subscriptions (540 + 60 owing) 600; inauguration surplus (3,000 - 1,000) 2,000; football surplus (500 - 300) 200; dance surplus (4,000 - 2,000) 2,000 = 4,800.
Expenditure - honorarium 520; sundry expenses 1,120; damages 300 = 1,940.
Excess of income over expenditure 2,860.
Subscriptions owing (5 × D12 = D60) go in the income and expenditure account, not the receipts and payments account.