The accountant of Cereus Golf Club (CGC) was terminated on charges of fraud and you have been assigned the task of preparing the accounts for the year ended 31 December 2020. You have found that the proper books had not been maintained. The management of CGC has given you the following information: Cash and bank balances at 1 January 2020 amounted to Rs. 0,5 million and Rs. 2 million respectively. However, as on 31 December 2020, there was no cash balance and Rs. 4.2 million in the bank. (i) The members are required to pay 3 years' subscription in advance upon admission/renewal. Full year subscription is charged from members joining during the year. Number of subscriptions received ake as under: 3 years' subscription per member Rs. 60,000 Rs. 75,000 Rs. 90,000 Year No. of memberships 2018 100 2019 2020 140 160 During 2020, 10 members were awarded membership on special permission but they had not paid the subscription till year-end. After year end, 5 more members informed that they had paid the 3 years' subscription amount in 2020. It was found out that the amount was misappropriated by the accountanit (i) CGC had received a donation of Rs. 8 million in 2019 to meet the repair and a spent Ra. 2.2 mil icap Stop sharing thaing jour sCeen (ii) CGC had received a donation of Rs. 8 million in 2019 to meet the repair and maintenance expenditure of its golf course. Out of total donation, the club has spent Rs. 2.2 million and Rs. 2.8 million in 2019 and 2020 respectively. (iv) CGC started purchasing golf kits in 2020 for sales as well as for renf purposes. 20% of the purchases were unpaid at year-end. Two third of the golf kit purchases made in 2020 had been added to inventory of golf kits for sale and remaining had been added directly to golf kits for rent. (v) Golf kits are sold for cash at cost plus 40%. Cost of closing inventory of golf kits for sale amounted to Rs. 1 million. It was decided to transfer half of these kits into golf kits for rent at 30% of their original cost. (vi) Some of the receipts and payments during the year were as follows: Rent of golf kits Golf kits purchases Annual insurance (paid till April 2021) Salaries (including Rs. 350,000 for 2019) Other expenses Rupees 650,000 4,800,000 660,000 2,800,000 2,320,000 (vii) CGC has a fidelity insurance policy and any cash deficiency upto a maximum of Rs. 2 million is recoverable under the policy. (vin Fixed assets at 1 January 2020 had a book value of Rs. 25 million. All fixed assets are to be depreciated at 15% per annum. Required: aproct thaning your screen Stop sharing 6CH 25C H maintenance expenditure of its golf course. Out of total donation, the club has spent Rs. 2.2 million and Rs. 2.8 million in 2019 and 2020 respectively. (iv) CGC started purchasing golf kits in 2020 for sales as well as for rent purposes. 20% of. the purchases were unpaid at year-end. Two third of the golf kit purchases made in 2020 had been added to inventory of golf kits for sale and remaining had been added directly to golf kits for rent. Golf kits are sold for cash at cost plus 40%. Cost of closing inventory of golf kits for sale (v) amounted to Rs. 1 million. It was decided to transfer half of these kits into golf kits for rent at 30% of their original cost. (vi) Some of the receipts and payments during the year were as follows: Rent of golf kits Golf kits purchases Annual insurance (paid till April 2021) Salaries (including Rs. 350,000 for 2019) Other expenses Rupees 650,000 4,800,000 660,000 2,800,000 2,320,000 (vii) CGC has a fidelity insurance policy and any cash deficiency upto a maximum of Rs. 2 million is recoverable under the policy, (viii) Fixed assets at 1 January 2020 had a book value of Rs. 25 million. All fixed assets are to be depreciated at 15% per annum. Required: (a) Prepare income and expenditure account for the year ended 31 December 2020. (b) Prepare statement of financial position as on 31 December 2020. (11) (09) (THE END) icap proctorexamcom is sharing your screen. Stop sharing 25C Heavy t-st