Chapter 5 - Not-For-Profit Organisations Chapter Review Solutions

Transcription

1 Chapter 5 - Not-For-Profit Organisations Chapter Review Solutions 2. The effect of incorporation on a Not-for-Profit organisation is that ( i ) The organisation is created as a separate legal entity able to enter into legally binding contracts in its own name. ( ii ) The organisation has perpetual succession, in that its existence is unaffected by changes in its membership. ( iii ) The extent of members liability for the debts of the organisation is limited to the amount of any unpaid subscriptions or the nominal guarantee as stated in its Constitution. 4. ( a ) (i) Members Subscriptions - the amounts payable, usually annually, by members of an organisation entitling them to have access to the facilities of, or to partake in the activities of, the organisation. (ii) Joining Fees or Entrance Fees - a "one-off premium" payment paid by new members for being able to access the facilities provided by the past operations of the organisation. (iii) Accumulated Funds - the accumulation of surpluses (and deficits) of income over expenditures for the organisation over the years that are the equivalent of Proprietor's Funds for a trading organisation. (iv) Register of Members - a book or database recording details of individual members including their names, addresses, class of membership etc. It is used to control membership numbers and their subscriptions or fees due and paid. (v) Constitution - a statement in writing of the fundamental principles by which the organisation is managed. It is the "rules and regulations" that have been adopted by the members. (vi) Honorarium - an amount paid by an organisation to an office bearer, (usually) acting in a voluntary capacity, to compensate for out-of-pocket expenses incurred. ( b ) A Statement of Receipts & Payments is a summary of all the cash transactions of an organisation for a period including all items whether of a "capital" or "operating" nature. An Income & Expenditure account matches the "operating" income of a period with the "operating" expenses incurred in achieving that income and the result is the net surplus for the period to be transferred to Accumulated Funds. 55

2 Prepare Financial Statements - Solutions 6. Dovedale Social Club Members Subscriptions 01/01/12 Subs in Arrears /01/12 Subs in Advance 1,200 31/12/12 Subs in Advance 1,100 31/12/12 Bank - Receipts 2,230 Income & Expend. 2,300 Subs in Arrears 110 3,540 3,540 1/01/13 Subs in Arrears 110 1/01/13 Subs in Advance 1, Mountain Wanderers Club Members Subscriptions 01/01/12 Subs in Arrears 16,000 01/01/12 Subs in Advance 20,000 31/12/12 Bank - Refunds 4,000 31/12/12 Bank - Receipts 60,000 Income & Expend. 40,000 Subs in Arrears 4,000 Subs in Advance 24,000 84,000 84, Goulburn Valley Darts Club Statement of Receipts and Payments for the year ended 31 December 2012 Receipts: Members Subscriptions 1,200 Collections for Market Day 5,000 Bus Trip Proceeds 1,470 7,670 Payments: Costs for Market day 1,560 Bus Hire 840 Miscellaneous Expenses 305 Purchase of new Darts 430 Hire of Clubhouse 1,500 Donations to Charities 300 4,935 Excess of Receipts over Payments 2,735 Cash at Bank Balance 01 January Cash at Bank Balance 31 December ,085 56

3 12. Number Crunchers Club Bar Trading Statement for the year ended 31 December 2012 Sales (Credit) 3,480 Less Cost of Goods Sold Inventory 01/01/12 1,300 Purchases (Credit) 2,180 3,480 Less: Inventory 31/12/ ,680 Profit to Income & Expenditure 800 Accounts Receivable 01/01/12 Balance b/d /12/12 Bank 3,280 31/12/12 Sales 3,480 31/12/12 Balance c/d 600 3,880 3,880 Accounts Payable 31/12/12 Bank 2,400 01/01/12 Balance b/d /12/12 Balance c/d /12/12 Purchases 2,180 2,880 2, Black and White Club Social and Refreshment Activities Trading for the year ended 31 December 2012 Inventory 01/01/12 7,500 Refreshment Sales 20,000 Refreshment Purchases 12,500 20,000 Less: Inventory 31/12/12 2,500 Cost of Sales 17,500 Gross Surplus c/d 2,500 20,000 20,000 Refreshment Wages 5,000 Gross Surplus b/d 2,500 Refreshment Expenses 1,600 Proceeds of Social Events 10,000 Hire of Premises 500 Hire of Band 1,500 General Social Expenses 1,000 Surplus to Income & Expend. 2,900 12,500 12,500 57

4 Prepare Financial Statements - Solutions 16. Jade Appreciation Club Dining Room Statement for the year ended 31 December 2012 Sales 51,122 Less Cost of Goods Sold Inventory 01/01/12 9,040 Purchases 16,938 25,978 Less: Inventory 31/12/12 6,470 19,508 Gross Surplus 31,614 Expenses Wages 11,356 Linen & Crockery Replacement 1,664 Cleaning 3,526 General Expenses 966 Electricity 370 Depreciation ,582 Surplus to Income & Expenditure 13,032 or Dining Room Trading Account for the year ended 31 December 2012 Inventory 01/01/12 9,040 Sales 51,122 Purchases 16,938 25,978 Less: Inventory 31/12/12 6,470 Cost of Sales 19,508 Gross Surplus c/d 31,614 51,122 51,122 Wages 11,356 Gross Surplus b/d 31,614 Linen & Crockery Replacement 1,664 Cleaning 3,526 General Expenses 966 Electricity 370 Depreciation 700 Surplus to Income & Expend. 13,032 31,614 31,614 58

5 18. Winged Foot Country Club Income and Expenditure for the year ended 31 December 2012 Manager's Salary 6,000 Subscriptions Due 15,020 Insurance Maintenance of Club Facilities Wages ( 1, ) Printing and Stationery Rent ( ) Sundry Expenses Depreciation - Club Furniture 1, Bar Trading Profit Donations Net Surplus to Accumulated Funds 1, ,570 4,400 15,970 15,970 Members Subscriptions 01/01/12 Subs in Arrears /01/12 Subs in Advance /12/12 Subs in Advance /12/12 Bank 15,000 Income & Expenditure 15,020 Subs in Arrears ,340 15,340 Bar Trading 31/12/12 Inventory 01/01/ /12/12 Sales 3,900 Purchases 2,500 Inventory 31/12/ Barman's Wages 600 Income & Expenditure 870 4,370 4,370 Wages 31/12/12 Bank 1,700 01/01/12 Accrued Expenses 50 31/12/12 Accrued Expenses 70 31/12/12 Income & Expenditure 1,720 1,770 1,770 Rent 01/01/12 Prepaid Expenses /12/12 Prepaid Expenses /12/12 Bank /12/12 Income & Expenditure

6 Prepare Financial Statements - Solutions 20. Video Social Club ( a ) Members Subscriptions 01/07/11 Subs in Arrears /07/11 Subs in Advance 1,332 30/06/12 Income & Expenditure 9,732 30/06/12 Bank - Receipts 10,120 Subs in Advance 1,184 Subs in Arrears ,668 11,668 ( b ) Canteen Trading for the year ended 30 June 2012 Inventory 01/07/ Sales 12,876 Purchases 9,380 10,280 Less: Inventory 30/06/12 1,000 Cost of Sales 9,280 Gross Surplus c/d 3,596 12,876 12,876 Wages 1,460 Gross Surplus b/d 3,596 Repairs to furniture 760 Surplus to Income & Expenditure 1,376 3,596 3,596 ( c ) Statement of Income and Expenditure for the year ended 30 June 2012 Income Members Subscriptions 9,732 Canteen Trading Surplus 1,376 11,108 Expenditure Electricity 300 Cleaning & Maintenance 1,560 Insurances 640 Office Wages Casuals 3,000 General Club Expenses 800 Postage & Stationery 600 6,900 Net Surplus to Accumulated Funds 4,208 60

7 22. United Accounting Institute ( a ) Statement of Receipts & Payments for the year ended 31 December 2012 Receipts: Members Subscriptions 49,000 Investment Interest Received ,500 Payments: Investments purchase 6,000 Administration Expenses 20,000 Printing & Stationery 4,000 Donations 1,000 Books purchases 4,000 Magazines purchases 500 Furniture & Fittings purchase 9,000 44,500 Excess of Receipts over Payments 5,000 Cash at Bank 01 January ,000 Cash on Hand 01 January ,200 Cash at Bank 31 December 2012 ( the balancing amount ) 25,900 Cash on Hand 31 December ,200 ( b ) Income & Expenditure Administration Expenses 21,000 Subscriptions Receivable 50,000 Printing & Stationery 4,000 Investment Interest Income 1,000 Donations Audit Fees Magazine purchases Depreciation Net Surplus to Accumulated Funds 1,000 1, ,300 20,200 51,000 51,000 Administration Expenses 31/12/12 Bank 20,000 01/01/12 Accrued 2,000 31/12/12 Accrued 3,000 31/12/12 Income & Expend. 21,000 23,000 23,000 61

8 Prepare Financial Statements - Solutions 24. Bundamba Golf Club ( a ) Bar & Dining Room Trading Inventory 01/07/11 3,600 Sales 68,300 Purchases 24,600 28,200 Less: Inventory 30/06/12 2,900 Cost of Sales 25,300 Gross Surplus c/d 43,000 68,300 68,300 Bar Wages 13,000 Gross Surplus b/d 43,000 Depreciation Bar Equip. 4,200 Surplus to Income & Expend. 25,800 43,000 43,000 ( b ) Statement of Receipts & Payments for the year ended 30 June 2012 Receipts Members Subscriptions 27,340 Joining Fees 2,000 Green Fees Received 11,500 Bar and Dining Room Sales 68, ,140 Payments Bar Wages 13,000 Office Wages 28,000 Purchases - Bar & Dining Room 24,600 Office Expenses 4,500 Cleaning & Maintenance 3,500 Insurances 1,200 Electricity & Lighting 800 Maintenance Equipment purchase 2,800 78,400 Excess of Receipts over Payments 30,740 Cash at Bank Balance 01 July ,600 Cash at Bank Balance 30 June ,340 ( c ) Members Subscriptions 01/07/11 Subs in Arrears /07/11 Subs in Advance /06/12 Subs in Advance /06/12 Bank 27,340 Income & Expend. 27,920 Subs in Arrears ,540 28,540 62

9 ( d ) Statement of Income & Expenditure for the year ended 30 June 2012 Income Members Subscriptions 27,920 Joining Fees 2,000 Green Fees 11,500 Surplus from Bar & Dining Room Trading 25,800 67,220 Expenditure Office Wages (28, ) 28,220 Office Expenses 4,500 Cleaning & Maintenance 3,500 Insurances 1,200 Electricity & Lighting 800 Depreciation - Maintenance Equipment ,640 Net Surplus to Accumulated Funds 28,580 ( e ) Statement of Assets & Liabilities as at 30 June 2012 Current Assets Bank 36,340 Inventory 2,900 Subscriptions in Arrears ,960 Non-Current Assets Bar & Dining Room Equipment 25,000 Less: Accumulated Depreciation 9,200 15,800 Maintenance Equipment 2,800 Less: Accumulated Depreciation 420 2,380 18,180 Total Assets 58,140 Current Liabilities Subscriptions in Advance 140 Accrued Wages Total Liabilities 790 Net Assets 57,350 Accumulated Funds Balance as at 01/07/11 28,770 Net Surplus from Income & Expenditure 28,580 57,350 57,350 63

10 Prepare Financial Statements - Solutions Trial Balance as at 01 July 2011 Subscriptions in Arrears 480 Subscriptions in Advance 480 Bar & dining Room Inventory 3,600 Office Wages Accrued 430 Cash at Bank 5,600 Bar Equipment 25,000 Accumulated Depreciation - Bar Equipment 5,000 Accumulated Funds 28,770 34,680 34,680 64

11 26. Up & Comers Rugby Club ( a ) Members Subscriptions 01/07/11 Subs in Arrears /07/11 Subs in Advance 1,086 30/06/12 Subs in Advance 1,100 30/06/12 Bank - Receipts 20,500 Income & Expenditure 20,446 Subs in Arrears ,706 21,706 ( b ) Bar Trading Inventory 01/07/11 5,600 Sales Purchases Less: Inventory 30/06/12 Cost of Sales Gross Surplus c/d Wages 23,046 28,646 6,300 22,346 20,414 42,760 22,500 22,500 Gross Surplus b/d Deficit to Income & Expend. 42,760 42,760 20,414 2,086 22,500 Bar Accounts Payable 30/06/12 Bank 23,520 01/07/11 Balance b/d /06/12 Balance c/d /06/12 Purchases 23,046 24,020 24,020 ( c ) Statement of Income & Expenditure for the year ended 30 June 2012 Income Members Subscriptions 20,446 Social Events - Receipts 4,200 Less Expenses - 3, ,346 Expenditure Bar Trading Deficit 2,086 Rates 470 Trophies 170 Cleaning of Clubhouse 2,000 Depreciation Equipment 1,200 5,926 Net Surplus to Accumulated Funds 15,420 65

12 Prepare Financial Statements - Solutions 28. The Douglas Golf Club ( a ) Trial Balance as at 01 January 2012 Cash at Bank 4,000 Bar Inventory 7,000 Subscriptions in Arrears 800 Subscriptions in Advance 2,800 Accounts Payable for Bar Purchases 11,300 Interest Receivable on Investments 200 Machinery, Course Equipment & Sheds 98,100 Club House 260,000 Bar Equipment 7,500 Investments 40,000 Accumulated Depreciation - Bar Equipment 3,500 Accumulated Depreciation - Machinery etc 48,000 Accumulated Depreciation - Club House 120,000 Accumulated Funds 232, , ,600 ( b ) Bar Trading Statement for the year ended 31 December 2012 Sales 176,000 Less: Cost of Sales Inventory 01/01/12 7,000 Purchases 71,700 78,700 Less: Inventory 31/12/12 9,000 69,700 Gross Surplus 106,300 Less: Wages - Bar Staff 22,400 Depreciation - Bar Equipment ,300 Surplus to Income & Expenditure 83,000 ( c ) Members Subscriptions 01/01/12 Subs In Arrears /01/12 Subs In Advance 2,800 31/12/12 Subs In Advance 3,000 31/12/12 Bank 33,000 Income & Expenditure 32,400 31/12/12 Subs In Arrears ,200 36,200 ( d ) Income and Expenditure for the year ended 31 December 2012 Course Equip. Maintenance 7,600 Members Subscriptions 32,400 Club House Repairs 2,500 Surplus from Bar Trading 83,000 Wages - Course Staff 56,000 Green Fees 38,000 Wages - Office Staff 33,000 Interest on Investments 2,600 Light & Power 6,900 Depreciation Machinery 12,000 Depreciation - Club House 20,000 Net Surplus to Accum. Funds 18, , ,000 66

13 Bar Accounts Payable 31/12/12 Bank 70,000 01/01/12 Balance b/d 11,300 31/12/12 Balance c/d 13,000 31/12/12 Purchases 71,700 83,000 83,000 Interest on Investments 01/01/12 Accrued Interest 31/12/12 Bank 2,500 Rec. - reversal 200 Accrued Interest 31/12/12 Income & Expend. 2,600 Receivable 300 2,800 2,800 67