Question

6. The summary of the receipts and payments of the Adamfo Social Club for the year ended 31st December 2019 is as follows:
Receipts: Subscriptions $4,000; Sale of competition tickets $800; Donations $300; Refund of rent $1,000; Competition prizes $600
Payments: Rent $3,000; Honorarium to speaker $2,200; Secretarial expenses $200; Donations to charity $60; Stationery and printing (amount not shown)

You are required to prepare for the club and for the year ended 31st December 2019:
(a) Subscriptions Account;
(b) Competition Prizes Suppliers Account;
(c) Competition Trading Account;
(d) Income and Expenditure Account.

Accepted Answer

(a) SUBSCRIPTIONS ACCOUNT
Dr: Bal b/d (arrears) $120; Income & expenditure (subscription earned) $4,020 = $4,140... per source: Dr Bal b/d 120, Income and expenditure 4,020; Bal c/d 60. Total Dr $4,200
Cr: Bal b/d (advance) $30, Bank $4,000, Bal c/d (arrears) $170. Total Cr $4,200
Closing balance b/d: $170 (arrears) brought down; $60 (advance) brought down

(b) COMPETITION PRIZES SUPPLIERS ACCOUNT
Dr: Bank $600, Bal c/d $120. Total $720
Cr: Bal b/d $90, Purchases $630. Total $720
Bal b/d (owing) c/f: $120

(c) COMPETITION TRADING ACCOUNT
Dr: Opening stock $70, Purchases $630 = $700
Cr: Closing stock ($80), Sales $800; Gross profit $180
Total both sides: $800

(d) INCOME AND EXPENDITURE ACCOUNT
Dr (Expenditure): Rent $3,000, Honorarium to speaker $2,200, Secretarial expenses $200, Donations to charity $60, Depreciation of equipment (1,950−1,500) $450, Deficit (balancing figure) $410. Total $5,910... 
Cr (Income): Subscription $4,020, Gross profit from competition tickets $180, Donations $300, Refund of rent $1,000. Total $5,500... 
Net result: Deficit of $410 for the year (expenditure exceeded income).

WAEC Accounting 2022 Theory — Question 14

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