Question
QUESTION FOUR Outline the main sources of income or revenue for not for profit organization (2 marks) Distinguish between receipts and payments account and income
QUESTION FOUR
- Outline the main sources of income or revenue for not for profit organization (2 marks)
- Distinguish between receipts and payments account and income and expenditure account as used in not for profit accounting. (2 marks)
- The following is a receipt and payment account prepared by Railways Golf Club for the year ended 31 December 2010.
| Receipts and Payments Account as at 31 Dec 2010 |
| |||
Date | Details | Amount | Date | Details | Amount |
2010 |
| Shs | 2010 |
| Shs |
1. 1 | Cash in hand | 10,000 |
| Grounds man wages | 75,000 |
1. 1 | Balance at bank | 283,000 |
| Purchase of mowing machine | 150,000 |
| Donations and Subscriptions | 260,000 |
| Rent of grounds | 25,000 |
| Receipts from tea party sales | 30,000 |
| Cost of Tea party | 25,000 |
| Donations for traveling | 10,000 |
| Travelling expenses | 40,000 |
| Sale of Equipment | 8,000 |
| Printing and stationery | 28,000 |
| Net proceeds from Dinner | 78,000 |
| Repairs to equipment | 50,000 |
31.12 | Bank Interest | 3,000 |
| Honoraria to Secretary and Treasury | 40,000 |
|
|
|
| Balances: |
|
|
|
| 31.12 | Cash in Hand | 25,000 |
|
|
|
| Bank | 224,000 |
|
| 682,000 |
|
| 682,000 |
Additional Information:
Balances on: | 1.Jan 2010 | 31 Dec 2010 |
Subscriptions due in (Shs) | 15,000 | 10,000 |
Amounts due for printing and stationery (Shs) | 10,000 | 8,000 |
Un-presented cheques made for repairs (Shs) | 30,000 | 25,000 |
Bank interest not entered in the cashbook as at 31.12. 2010 (Shs) |
| 2,000 |
Estimated value of machine and equipment (Shs) | 80,000 | 175,000 |
For the year ending 31st December 2010, the honoraria to the treasurer are to be increased by Shs 20,000, and the grounds-man is to receive a bonus of Shs 20,000. The equipment sold had been bought at Shs 2000.
Required:
- Compute the opening balance of the accumulated fund. (4 marks)
- The income and expenditure account for the year ended 31st December 2010 (7 marks)
- The balance sheet as at 31st December 2010. (5 marks)
(Total marks 20)
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