In: Accounting
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.
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. | |||||||||