When a Welfare Association was formed on 1.1.20X0, the tenants of all 820 flats on University Street
Question:
When a Welfare Association was formed on 1.1.20X0, the tenants of all 820 flats on University Street joined as members. The membership fee was agreed at £20 per month. Of these tenants, 560 also agreed to pay an additional fee of £50 per month for crèche facilities. The council promoted the Association by donating a three-roomed flat, rent-free, for use as offices and approving an annual grant of £50,000. At the end of the first year the Association prepared its Receipts and Payments account as follows.
Other information
1. Expenditure unpaid at the end of the year is as follows:
2. Sports consumables costing £3,000 remain unused as at 31.12.20X0.
3. Membership fees and crèche fees due for a seven-month period were written off because a tenant had left the country.
4. One-tenth of the cost of furniture should be written off as depreciation.
5. The snooker tables should be depreciated over four years using the sum of digits method.
6. £300 of administration expenses paid relate to next year.
7. £1,000 was posted to crèche wages instead of to the wages of the security guards.
Required
Prepare the income and expenditure account for the year ended 31 December 20X0 and a statement of financial position as at that date.
Step by Step Answer:
Introduction To Financial Accounting
ISBN: 9781526803009
9th Edition
Authors: Anne Marie Ward, Andrew Thomas