Question

7. The receipts and payments show Boy club for the year ended 31st December, 2010 are as follows:
Opening balance 1/1/10 289,860
Proceeds from dance 216,900
Transfer to bank deposit 720,000
Rates 60,000; Entrance fee received 30,000
Wages paid 433,000
Subscriptions received 1,800,000
Repairs 97,032
General expense 293,376
Stationary 58,740
Interest received on bank deposit 72,000
Donations received 25,000
Additional information: (i) Accrued wages at 31/12/10 – D28,800. (ii) Rates prepaid amounted to D12,000. (iii) General expenses included D18,000 owed since the previous year (iv) out of the subscriptions received, D48,000 was in arrears for the previous year while D120,000 was paid in advance for the coming year. (v) Assets of the club at 1st January, 2010 were: Club house D5,760,000; Equipment D3,600,000; Bank Deposit D2,400,000. (vi) Depreciation: Club house 5%; Equipment 10%.
You are required to prepare: (a) Statement of affairs as at 1st January, 2010; (b) Receipts and Payments Account for the year ended 31st December, 2010; (c) Subscriptions Account; (d) Income and Expenditure Account for the year ended 31st December, 2010.

Accepted Answer

(a) STATEMENT OF AFFAIRS as at 1st January, 2010
Assets: Cash 289,860; Subscription in arrears 48,000; Club house 5,760,000; Equipment 3,600,000; Bank 2,400,000 = Total 12,097,860.
Less liabilities: General expenses owed (18,000). Accumulated fund as at 1/1/10 = 12,079,860.

(b) RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31st December, 2010
Dr: Bal b/d 289,860; Proceeds from dance 216,900; Entrance fees 30,000; Subscriptions 1,800,000; Interest received 72,000; Donations 25,200; Total 2,433,960 (2,433,960 shown twice in source across both sides, with balance carried appropriately).
Cr: Bank deposit 720,000; Wages 433,800; Rates 60,000; Equipment (repairs) 240,000; Repairs 97,032; General expenses 293,376; Stationery 58,740; Bal c/d 531,012; Total 2,433,960.

(c) SUBSCRIPTIONS ACCOUNT
Dr: Bal b/d 1,408,000; Income & expenditure a/c 1,704,000; Bal c/d 120,000; Total 1,872,000... wait presenting as per source: Cr side Receipts and payments 1,800,000; Bal c/d 72,000; Total 1,872,000; Bal b/d 120,000.

(d) INCOME AND EXPENDITURE ACCOUNT for the year ended 31st December, 2010
Dr: Wages (433,800+28,800) 462,600; Rates (600,000... per source, net of prepayment) 48,000; General expenses 275,376; Repairs 97,032; Stationery 58,740; Club house depreciation 288,000; Equipment depreciation 384,000; Excess of income over expenditure 434,332; Total 2,048,100.
Cr: Subscription received 1,704,000; Entrance fees 30,000; Interest received 72,000; Donations received 25,200; Dance proceeds 216,900; Total 2,048,100.

WAEC Accounting 2012 Theory — Question 7

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