The Golden Club is a not for profit organization. Accounts are prepared annually on 31 December. Below are the assets and liabilities of the club at the beginning of the year 2018. Assets Building Furniture Sport Equipment Inventory- Refreshments Bank Deposit Cash in hand Subscription in arrears Receipts Subscriptions Assets and liabilities as at 1 Jan 2018 $ Subscriptions Life Membership fees (5) members) Profit on Fancy fair Donations Sale of Refreshments 40000 10000 15000 3500 25000 1000 375 94875 14440 3500 Liabilities Accumulated fund Life Membership Receipts & Payments Account for the year ended 31 Dec 2018 $ Payments Purchases of Refreshments 15220 18600 47680 Old People's Welfare Needy Students Refreshments Trade payable Subscriptions in advance Expenses accrued(Elec & Water) General Expenses $ 79605 5600 Bank Deposits New Sports Equipment 2100 4440 2750 170 210 94875 Old people's Welfare activities Needy Students Welfare activities Electricity & Water Annual Dinner & Ball. $ 29880 18770 9990 10710 2975 6800 16000 3000 1. Life Membership Scheme was launched for the first time during the year ended 31 Dec 2017, the life membership fee being $700 per member. It was then decided to write off the life membership fee over five years and this policy is to be continued. 2. Subscriptions received in advance and in arrears were $430 and $370 respectively on 31 Dec 2018. 3. The electricity and water bill for December 2018, $270, has not yet been settled yet. 4. The donations are to be utilized as follows: Old people welfare, 1/3; Needy students welfare, 2/5 and balance for general purposes. 5. Interest, $3,800 is receivable on bank deposit on 31 Dec 2018. Such interest is normally credited to bank deposits a/c. 6. Of the subscriptions receivable, 1/5 is to be credited to Needy students welfare fund. 7. $2,900 of the profit on fancy fair is to be transferred to old people's welfare fund. 8. Stock of Refreshments on hand on 31 Dec 2018, $4200. 9. Creditors for refreshments on 31 Dec 2018, $2900 10. Of the surplus on refreshments, $3,000 is to be transferred to Premises Renovation Fund. 11. Renovation activities are scheduled to start as from 1 Feb 2019. 12. Depreciation to be provided as follows: Building, $ 800 Furniture, $ 800 Sports Equipment, $1,500 Required (a) A Refreshment Account and an Income and expenditure account for the year ended 31 Dec 2018. [14 marks] [14 marks] (b) A Statement of Financial position as at 31 Dec 2018. (c) Explain why the Golden club transfers life membership fund to the income and expenditure accounts over 5 years. [2 marks]