Chapter 18: Accounts of clubs and societies

Clubs and Societies are Non-Trading Organizations

Non-Trading Organization: Is an organization formed to provide

facilities and services for members. They are not formed with
aim of making profit.

The main source of income: Subscriptions

Subscriptions: are the amounts that members pay to use

facilities or services provided by the club or society.

Some changes in the names of accounts or financial

statements:

1. Bank  Receipts and Payments

2. Profit and Loss Account  Income and Expenditure
a. In case business has trading activity  regular
income statement (all what is related to shop)
3. Net Profit  Surplus (Income > Expenditure)
4. Net Loss  Deficit (Income < Expenditure)
5. Capital  Accumulated Fund

Preparation of receipts and payments account:

Receipts  Money received  Debit

Payment  Money paid  Credit

Example:
The Apollo Athletics Club was formed some years ago to provide
various sporting facilities for its members. The club also has a shop
where members can purchase sportswear.
On 1 August 20–7 the club had $2200 in the bank. The treasurer
provided the following list of receipts and payments for the year
ended 31 July 20–8:
 Receipts and Payments for the year ended 31 July 200 8

Date Detail $ 13120 Date Detail $ 11188

1 Aug 2007 b/d 2200 31 July 08 Purchases 2130
31 July 2008 Subscription 5860 Wages- Shop 1300
Assistant
Shop Sales 3960 Wages Coach 2700
Entrance fees 1100 Rates & Insur 328
General Exp 1120
Sports Equip. 2950
Prizes 660
c/d 1932
13120 1312
0
1 Aug 2008 b/d 1932
Preparation of Income Statement of club or society:

If the club has Trading Activity (Shop)  Trading Section

(income statement)

If the shop  Profit  Income and Expenditure

The Apollo Athletics Club was formed some years ago to provide various
sporting facilities for its members. The club also has a shop where members
can purchase sportswear.
The treasurer provided the following information for the year ended 31 July
20–8:
$
Receipts from shop sales 3 960
Purchases of goods for resale 2 130
Shop inventory 1 August 20–7 240
Shop inventory 31 July 20–8 310
Wages of shop assistant 1 300

Prepare the shop income statement of the Apollo Athletics Club for the year
ended 31 July 20–8

Shop Income Statement

Revenue 3960
Less Cost of goods sold:
Opening Inventory 240
Purchases 2130
Less Purchases Return -
Carriage inward -
Less closing inventory (310) 2060
Gross Profit 1900
Less Expenses:
Wages of shop assistant (1300)
Profit on Shop (Transferred 600
to income and expenditure)
Preparation of Income and Expenditure:
The Apollo Athletics Club was formed some years ago to provide various sporting
facilities for its members. The club also has a shop where members can purchase
sportswear.
The following receipts and payments account was prepared for the year ended 31
July 20–8:

Receipts and Payments for the year ended 31 July 200 8

Date Detail $ 13120 Date Detail $ 11188

1 Aug 2007 b/d 2200 31 July 08 Purchases 2130
31 July 2008 Subscription 5860 Wages- Shop 1300
Assistant
Shop Sales 3960 Wages Coach 2700
Entrance fees 1100 Rates & Insur 328
General Exp 1120
Sports Equip. 2950
Prizes 660
c/d 1932
13120 1312
0
1 Aug 2008 b/d 1932
The treasurer also provided the following additional information:
1) On 31 July 20–8:
• insurance prepaid amounts to $16
• wages of athletics coach, outstanding amount of $400 (accrued)
• 15 members still owe their annual subscription of $20 each for the current
financial year (accrued)
• eight members have paid their annual subscription of $20 each for the
following financial year (prepaid)
• Sports equipment is to be depreciated by $1 715.
2) The profit on the club’s shop for the year ended 31 July 20–8 was $600 (calculated
in the shop income statement).
Prepare the income and expenditure account of the Apollo Athletics Club for the
year ended 31 July 20–8.
Income:
Subscription (5860 +300 -160) 6000
Profit on shop 600
Entrance Fees 1100
Total Income 7700
Less Expenditure:
Wages Coach 3100
Rates and Insurance 312
General Expenses 1120
Prizes 660
Depreciation 1715
Total Expenditure 6907
SURPLUS 793

Preparation of STATEMENT OF FINANCIAL POSITION:

The Apollo Athletics Club was formed some years ago to provide various sporting
facilities for its members. The club also has a shop where members can purchase
sportswear.
On 1 August 20–7 the following balances appeared in the books of the club:
$
Premises at cost 20 000
Equipment at cost 14 200
Provision for depreciation of equipment 5 680
Balance at bank 2 200
Shop inventory 240
Accumulated fund 30 960
The income and expenditure account for the year ended 31 July 20–8 showed a
surplus of $793.
During the year ended 31 July 20–8 new equipment costing $2 950 was purchased.
The depreciation on equipment for the year amounted to $1 715.

On 31 July 20–8:
$
Balance at bank 1 932
Shop inventory 310
Insurance prepaid 16
Wages of athletics coach outstanding 400
Subscriptions owing by members 300
Subscriptions paid in advance by members 160
Prepare the statement of financial position of the Apollo Athletics Club
at 31 July 20–8.
 Statement of Financial Position
Fixed Assets Cost Accumulated Dep. NBV
Premises 20,000 0 20,000
Equipment 17,150 7395 9,755
29,755
Current Assets
Shop Inventory 310
Bank 1932
Prepaid insurance 16
Subscription accrued 300 2558
Total Assets 32,313

Current Liabilities:
Accrued Wages 400
Prepaid Subscription 160 560

Accumulated Fund
Opening Balance 30960
Surplus 793 31,753
Total Liab and Acc Fund 32,313

Main Income for Clubs and Societies in SUBSCRIPTION:

 Subscription received  Receipt in the Receipt and Payment

 Subscription owing by members  Accrued Income (+)  Current Asset
 Subscription paid by members in advance  Prepaid Income (-)  Current Liability
How to prepare subscription Account?
Subscription Account
Date Detail $ Date Detail $

The Apollo Athletics Club was formed some years ago to provide various
sporting facilities for its members.
On 1 August 20–7 there were no subscriptions owing by members and no
members had paid their subscriptions in advance.
During the year ended 31 July 20–8 the club received subscriptions totalling
$5 860 from members. This included subscriptions of $20 each from eight
members for the following financial year. On 31 July 20–8 subscriptions of $20
each for the current financial year were still outstanding from 15 members.
During the year ended 31 July 20–9 the club received subscriptions from
members totaling $6 020. On 31 July 20–9 there were subscriptions
outstanding of $120. Prepare the subscriptions account in the books of the
Apollo Athletics Club for each of the two years ended 31 July 20–8 and 31 July
20–9.
Subscription Account
Date Detail $ Date Detail $
31 July 08 c/d 160 31 July 08 Bank 5860
I&E 6000 c/d 300
6160 6160
1 Aug 08 b/d 300 1 Aug 08 b/d 160
31 July 09 I&E 6000 31 July 09 Bank 6020
c/d 120
6300 6300
1 Aug 09 b/d 120
Exam Style Question:
The WS Music Club was formed on 1 June 20–8. The following information
was provided for the year ended 31 May 20–9:
$
Receipts
Subscriptions 12 100 + 400 -500
Tickets for concert 1 400
Loan from AB Music Group 1 000
Payments
Rent of rehearsal rooms 5 000 +200
Insurance (15 months to 31 August 20–9) 600 prepaid 120 (CA)
General expenses 1 720 + 30
Concert expenses 990
Musical instruments 3 000
Interest on Loan 0 + 50
Additional information:
1. The club has 240 members. The annual subscription is $50. On 31 May 20–9
eight members had not paid their subscription (400 CA) and ten members
had paid their subscription in advance for the following year (500 CL)
2. On 31 May 20–9 general expenses accrued amounted to $30 (CL) and rent
accrued amounted to $200 (CL)
3. A ten-year loan from the AB Music Group was received on 1 December 20–
8. Interest is payable at 5% per annum. (CL)
4. Musical instruments are to be depreciated at the rate of 10% per annum
based on the cost (SLM) of instruments owned at the end of the financial
year. 3000*10% = 300
a Prepare the income and expenditure account for the year ended 31 May 20–9.
b Prepare a statement of financial position at 31 May 20–9
INCOME AND EXPENDITURE
Income:
Subscription 12,000
Tickets for Concert 1,400
TOTAL INCOME 13,400

Expenditure:
Rent 5200
Insurance 480
General Expense 1750
Concert Expense 990
Loan interest 50
Depreciation 300
TOTAL EXPENDITURE 8770
SURPLUS 4630

STATEMENT OF FINANCIAL POSITION

Fixed Assets Cost Acc. Dep NBV
Musical Instruments 3000 300 2700
2700
Current Assets
Prepaid Insurance 120
Owing Subscription 400
Bank 3190 3710
TOTAL ASSETS 6410
Current Liabilities
Prepaid Subscription 500
Accrued Expenses 280 780
Long Term Liab
Loan 1000
TOTAL LIABILITIES 1780

ACCUMULATED FUNDS
Surplus 4630 4630
Total Liab + AF 6410