The CK Club was formed some years ago. The club has 200 members and the annual subscription is $120. The financial year ends on 31 December.

The treasurer of the CK Club provided the following information:

On 1 January 20–7:

14 members still owed their subscription for 20–6

Five members had paid their subscription for 20–7 in advance

During the year ended 31 December 20–7:

Ten members had paid their outstanding subscription for 20–6

187 members had paid their subscription for 20–7

Six members had paid their subscription for 20–8

On 31 December 20–7 it was decided to write off the subscriptions still outstanding for 20–6 as irrecoverable.

a. Prepare the subscriptions account for the year ended 31 December 20–7. Balance the account and bring down the balances on 1 January 20–8.
b. Explain the meaning of each of the following terms:

i. Subscriptions
ii. Income and expenditure account
iii. Receipts and payments account
iv. Accumulated fund

c. Explain why it may be necessary for an income statement to be prepared for a club.