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SS2: FINANCIAL ACCOUNTING - 2ND TERM

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Illustration 3

Below is a summary of the receipt and payment of the utility club for the year ended 31st December 1995.

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Additional Information

(a) Wages of 4,800 were due and unpaid at 31st December

(b) Rates prepaid amount to 2,000

(c) General expenses include 3,000 owing since the previous years.

(d) Of the subscription received 8,000 was paid in advance for the coming year. In addition, 12,000 was still owing on 31st December 1995.

(e) The club had the following properties on 1st January 1995.

N

Club House

960,000

Equipment

600,000

Bank deposit

400,000

(f) Depreciate club house by 5% and Equipment Including additions within the year by 10%.

You are required to prepare:

(i) Receipts and payment account for the year ended 31st December 1995.

(ii) Income and expenditure account for the year ended 31st December 1995.

(iii) Balance sheet as at that date.

Solution

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Workings

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NB: Subscription of 20,000 is a liability
Subscription of 12,000 is an asset.

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