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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

  1. Outline the main sources of income or revenue for not for profit organization (2 marks)
  2. Distinguish between receipts and payments account and income and expenditure account as used in not for profit accounting. (2 marks)
  3. 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:

  1. Compute the opening balance of the accumulated fund. (4 marks)
  2. The income and expenditure account for the year ended 31st December 2010 (7 marks)
  3. The balance sheet as at 31st December 2010. (5 marks)

(Total marks 20)

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