The books of Omiye Social Club showed the following information for the year ended 31st December 2015
| Balance |
3000 |
salaries |
10,600 |
| subscription |
130,000 |
maintenance |
13,000 |
| proceeds from concert |
9,000 |
stationary |
1200 |
| interest on deposit |
2,400 |
postage |
600 |
| income from dance |
7,200 |
Dance expense |
4,000 |
|
|
general expenses |
5,400 |
|
|
balance c/d |
116,800 |
|
151,600 |
|
151,600 |
Balances as at 1st January 2015 were as follows:
| Accumulated fund | 266,000 |
| Bank deposit | 80,000 |
| Clubhouse | 160,000 |
| Furniture and fittings | 24,000 |
Additional information
i. Outstanding as at 31st December 2015:
- stationery N400
- general expenses 1,200
ii. Salaries of l0,600 paid including 1,000 owed since 2014.
iii. Depreciate clubhouse by 10% and furniture and fittings by 15%
You are required to prepare:
(a) Income and Expenditure Account for the year ended 31st December 2015
(b) Balance Sheet as at that date.
Preliminary note. The figures given form a Receipts and Payments account (opening cash N3,000, total N151,600, closing cash N116,800). We first confirm the opening Accumulated Fund, then prepare the Income and Expenditure account (adjusting for outstanding expenses, the prior-year salary paid, and depreciation) and finally the Balance Sheet.
Check on the opening Accumulated Fund (1st January 2015)
| Assets and (liabilities) | N |
|---|
| Clubhouse | 160,000 |
| Furniture and fittings | 24,000 |
| Bank deposit | 80,000 |
| Cash balance | 3,000 |
| Less: salaries owing (from 2014) | (1,000) |
| Accumulated Fund | 266,000 |
This agrees with the accumulated fund of N266,000 given in the question.
(a) Income and Expenditure Account for the year ended 31st December 2015
Salaries paid were N10,600 but N1,000 of this belonged to 2014, so only N9,600 is the 2015 charge. Stationery and general expenses are increased by the amounts still outstanding. Depreciation is charged at 10% on the clubhouse (N16,000) and 15% on furniture and fittings (N3,600).
| Expenditure | N | Income | N |
|---|
| Salaries (10,600 - 1,000) | 9,600 | Subscriptions | 130,000 |
| Maintenance | 13,000 | Proceeds from concert | 9,000 |
| Stationery (1,200 + 400) | 1,600 | Interest on deposit | 2,400 |
| Postage | 600 | Income from dance | 7,200 |
| Dance expense | 4,000 | | |
| General expenses (5,400 + 1,200) | 6,600 | | |
| Depreciation: Clubhouse (10%) | 16,000 | | |
| Depreciation: Furniture and fittings (15%) | 3,600 | | |
| Surplus (excess of income over expenditure) | 93,600 | | |
| Total | 148,600 | Total | 148,600 |
Surplus for the year = N93,600 (total income N148,600 less total expenditure N55,000).
(b) Balance Sheet as at 31st December 2015
| Fixed Assets | Cost N | Depreciation N | Net N |
|---|
| Clubhouse | 160,000 | 16,000 | 144,000 |
| Furniture and fittings | 24,000 | 3,600 | 20,400 |
| Total fixed assets | | | 164,400 |
| Current Assets | N | N |
|---|
| Bank deposit | 80,000 | |
| Cash balance | 116,800 | |
| Total current assets | 196,800 | |
| Less current liabilities: | | |
| Stationery owing | 400 | |
| General expenses owing | 1,200 | (1,600) |
| Net current assets (working capital) | | 195,200 |
| Net assets | | 359,600 |
| Financed by | N |
|---|
| Accumulated Fund b/d | 266,000 |
| Add: surplus for the year | 93,600 |
| Accumulated Fund c/d | 359,600 |
The Balance Sheet balances at N359,600, confirming the accounts. Note that the N1,000 salary owed at the start was settled during the year, so no salary liability remains at 31st December 2015.
Preliminary note. The figures given form a Receipts and Payments account (opening cash N3,000, total N151,600, closing cash N116,800). We first confirm the opening Accumulated Fund, then prepare the Income and Expenditure account (adjusting for outstanding expenses, the prior-year salary paid, and depreciation) and finally the Balance Sheet.
Check on the opening Accumulated Fund (1st January 2015)
| Assets and (liabilities) | N |
|---|
| Clubhouse | 160,000 |
| Furniture and fittings | 24,000 |
| Bank deposit | 80,000 |
| Cash balance | 3,000 |
| Less: salaries owing (from 2014) | (1,000) |
| Accumulated Fund | 266,000 |
This agrees with the accumulated fund of N266,000 given in the question.
(a) Income and Expenditure Account for the year ended 31st December 2015
Salaries paid were N10,600 but N1,000 of this belonged to 2014, so only N9,600 is the 2015 charge. Stationery and general expenses are increased by the amounts still outstanding. Depreciation is charged at 10% on the clubhouse (N16,000) and 15% on furniture and fittings (N3,600).
| Expenditure | N | Income | N |
|---|
| Salaries (10,600 - 1,000) | 9,600 | Subscriptions | 130,000 |
| Maintenance | 13,000 | Proceeds from concert | 9,000 |
| Stationery (1,200 + 400) | 1,600 | Interest on deposit | 2,400 |
| Postage | 600 | Income from dance | 7,200 |
| Dance expense | 4,000 | | |
| General expenses (5,400 + 1,200) | 6,600 | | |
| Depreciation: Clubhouse (10%) | 16,000 | | |
| Depreciation: Furniture and fittings (15%) | 3,600 | | |
| Surplus (excess of income over expenditure) | 93,600 | | |
| Total | 148,600 | Total | 148,600 |
Surplus for the year = N93,600 (total income N148,600 less total expenditure N55,000).
(b) Balance Sheet as at 31st December 2015
| Fixed Assets | Cost N | Depreciation N | Net N |
|---|
| Clubhouse | 160,000 | 16,000 | 144,000 |
| Furniture and fittings | 24,000 | 3,600 | 20,400 |
| Total fixed assets | | | 164,400 |
| Current Assets | N | N |
|---|
| Bank deposit | 80,000 | |
| Cash balance | 116,800 | |
| Total current assets | 196,800 | |
| Less current liabilities: | | |
| Stationery owing | 400 | |
| General expenses owing | 1,200 | (1,600) |
| Net current assets (working capital) | | 195,200 |
| Net assets | | 359,600 |
| Financed by | N |
|---|
| Accumulated Fund b/d | 266,000 |
| Add: surplus for the year | 93,600 |
| Accumulated Fund c/d | 359,600 |
The Balance Sheet balances at N359,600, confirming the accounts. Note that the N1,000 salary owed at the start was settled during the year, so no salary liability remains at 31st December 2015.
