CONTENT:
PREPARATION OF RECEIPT AND PAYMENT AND INCOME AND EXPENDITURE
Example:
Below is a summary of the receipts and payments of Utility Club for the year ended 31st December, 2005.
Additional information
1. Wages of N4, 800 were due and unpaid at 31st Dec, 2005
2. Rates prepaid amount to N2,000
3. General expenses include N3,000 owing since the previous year
4. Of the subscriptions received N8,000 was in arrears the previous year while N20,000 was paid in advance for the coming year, in addition N12,000 was still owing at 31st Dec,2005.
5. The club had the following properties on 1st Jan, 2005:
6. Depreciate club house by 5% and equipment including additions within the year by 10%
You are required to prepare:
- Receipt and payment account for the year ended 31st Dec, 2005.
- Income and expenditure account for the year ended 31st Dec, 2005
- Balance sheet as at that date
Solution:
Receipt and payment account for the year ended 31st Dec, 2005
Income and Expenditure Account
Subscription Account
Statement of Affairs as at 1st Jan, 2005
Balance Sheet as at 31st Dec, 2005
EVALUATION
- Define Receipt and payment
- Define Income and expenditure
- Mention three features of receipts and payment
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