Question

In: Accounting

Chongwe Drivers’ Club at the begging of the financial year (1st April, 2014) had the following...

Chongwe Drivers’ Club at the begging of the financial year (1st April, 2014) had the following assets and liabilities:

Cash in hand 36 000

Subscriptions receivable 56 000

Inventory(sports materials) 170 000

Play grounds 1 000 000

Printing and stationery 22 000

Inventory of sports materials amounting to ZMK 153 000 and those of printing and stationery amounting to ZMK 51 800 were available on 31st March 2015. Subscriptions due on 31st March 2015 amounted to ZMK 84 000.

Donations and surpluses on tournaments are to be kept in Reserve for a permanent pavilion. It is the policy of the club to write off 50% of its sports materials and 30% of printing and stationery every year-end.

During the year ended 31 March 2015, the club accountant prepared the following.

Receipts and Payments Account Receipts :

Balance b/d 36,000 Hire of ground 56,000 Donations 1,200 Members’ subscriptions 30,000 Members’ admission fee 500,000 Subscription-tournament 120000 Sale-old sports materials 5,000 Life membership fee 40,000 Balance c/d ?

Payments:

Balance b/d 32,000 Printing and stationery 52,000 Postage charges 4,000 Secretary’s honorarium 60,000 Upkeep of field/pavilion 230,000 Telephone 7,000 Miscellaneous expenses 8,800 Rates and insurance 20,000 Grass seed 5,200 Tournament expenses 80.000 Investment 1,200,000 Acquisition-sports material 136,000 Balance c/d ? Required:

Determine the closing cash balance on the Receipts and Payments Account .

Prepare the Income and Expenditure Account and Statement of Financial Position, as at 31st March 2015. Show all workings.

Solutions

Expert Solution

WN
Balance Sheet
as at 1st april 2014
Liability Amount-ZMK Assets Amount-ZMK
Play Ground (Land) 1000000 abbreviations
I &E Income and Expenditure
Cash 36000 R & P Receipts and Payments
Capital Fund 1252000 Sports Material 170000
bal fig Stock of Printing and Stationery 220000
Bank Overdraft 32000 Subscription receivable 56000
1284000 1284000
Printing and Stationery
To Op Stock 22000 By Income and Exp 22200
consumed
To Receipt and Payment 52000 [(22000+52000)*30%)]
By Closing Stock 51800
74000 74000
Investment
To Bal B/D
To R & P -Purchase 1200000 By Bal C/D 1200000
1200000 1200000
Note : Depreciation is not charged on Investment
Sports Material
To Bal b/d 170000 By I & Exp 153000
consumed
To R & P -Purchase 136000 [(170000+136000)]*50%
To I & E -Profit on sale 5000 By R & P sale 5000
By Bal C/D 153000
311000 311000
Subscription
To Bal B/D 56000 By R & P 50000
To I & E -Bal fig 528000 By Bal C/D-OS 84000
584000 584000
Income and Expenditure
for the yr ended 31st March 2015
Expenditure Amount Income Amount
To Printing and Stationary 22200 By Hire of Ground 56000
To Postage charges 4000 By Subscription 528000
To Secretary honararium 60000 By Sports Material (Sold) 5000
To Telephone 7000 By Member admission fees 30000
To Misc Exp 8800
To Rates and Insurance 20000
To Grass Seeds 5200
To Sports Material Consumed /dep 153000
To Upkeep of field 230000
To Surplus 108800
619000 619000
Calculation of closing balance of Receipts and Payments
[(36000+56000+1200000+500000+30000+120000+5000+40000)-(32000+52000+4000+60000+230000+7000+8800+20000+5200+80000+120000+136000)]
152000
Balance Sheet
as at 31st March 2015
Liabilities Amount Amount Assets Amount Amount
Capital Fund Play Ground -Land 1000000
Op Bal 1252000
Surplus 108800 1360800 Investment 1200000
Reserve Subscription Receivable 84000
Donations 1200000
Subs for Tournament 120000 Sports Material 153000
1320000
Tournament Exp -80000 Cash in Hand 152000
Life Membership Fees 40000 Stock of Printing and Stationery 51800
2640000 2640000
Note 1 Life membership is capitalised.Therefore shown in BS
2 Depreciation is not charged on land.

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