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By S.K Chik

Income and expenditure account. By S.K Chik. Club Accounts . The accounts and statement are made for clubs, societies, associations and similar non-profit making organizations They usually produce the following accounting records Receipts and Payments Account Separate Trading Account( s )

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By S.K Chik

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  1. Income and expenditure account By S.K Chik

  2. Club Accounts • The accounts and statement are made for clubs, societies, associations and similar non-profit making organizations • They usually produce the following accounting records • Receipts and Payments Account • Separate Trading Account( s ) • Income and Expenditure Account

  3. Receipts and Payment Account • A summary of the cash book • All statements are drafted from reviewing the transactions in this account

  4. Gradeplus Football Club Receipts and Payments Account For the year ended 31 August 20X5 Receipts $ Bank balance b/f 900 Bar takings 18,050 Members’ subscriptions 4,140 Miscellaneous receipts 1,705 24,795 Payments $ Bar purchases 14,390 Bar stewards’ wages 1,760 Pavilion repairs 750 Electricity and insurance 3,500 Other expenses 1,980 Sundry creditors 350 Investment in Building 1,000 Bank balance c/f 1,065 24,795

  5. Separate Trading Account( s ) • When there is any activities that are making profit, a separate Trading and profit & loss accounts should be made • E.g. Bar trading, Annual dinner, etc

  6. Gradeplus Football Club Bar Trading Account For the year ended 31 December 20X5 $ Stock at 31 Dec 20X5 1,700 Purchases(14,390 + 800 - 750)14,440 16,140 Less: Stock at 31 Dec 20X6 1,550 Cost of bar sales 14,590 Gross profit c/d 3,460 18,050 Bar stewards’ wages 1,760 Bar profit 1,700 3,460 $ Bar sales 18,050 18,050 Gross profit b/d 3,460 3,460

  7. Usually and purchases and sales are not given • You need to calculate them from the Debtors and Creditors’ account • Remember to sum up the amount of Credit purchases/sales with Cash purchases/sales

  8. Let’s say: • From balance sheet as at 31 December 20X4 (previous year) • Creditors- $750 • From the additional information • Creditors balance in 20X6- $800 • So credit purchases equal to: • $800-$750=$50

  9. Gradeplus Football Club Bar Trading Account For the year ended 31 December 20X5 $ Stock at 31 Dec 20X5 1,700 Purchases(14,390 + 800 - 750)14,440 16,040 Less: Stock at 31 Dec 20X6 1,550 Cost of bar sales 14,590 Gross profit c/d 3,460 18,050 Bar stewards’ wages 1,760 Bar profit 1,700 3,460 $ Bar sales 18,050 18,050 Gross profit b/d 3,460 3,460 Creditors Bal c/d 800 800 Bal b/d 750 Purchase 50 800

  10. Income and Expenditure Account • This account is equivalent to a profit and loss • ‘Net profit’ is replaced by ‘Surplus’ • ‘Net loss’ is replaced by ‘Deficit’

  11. Gradeplus Football Club Income and Expenditure Account For the year ended 31 December 20X5 Expenditure $ Pavilion repairs 750 Electricity and insurance 3,530 Other expenses 1,980 Depreciation on pavilion 1,250 Surplus for the year 68 Bar stewards’ wages 7,578 Income $ Members’ subscriptions (4,140+40-160+128) 4,148 Miscellaneous receipts 1,705 Bar profit 1,700 Interest on Building Society Investment 25 7,578

  12. Subscriptions • The Subscriptions Account is a revenue account and should be closed to the income and expenditure account. • Remember to adjust the subscriptions with those in advance and in arrears at the beginning and the end of the period.

  13. Let’s say: • From the balance sheet as at 31 December 20X4 • Current assets: Subscriptions in arrears- $160 • Current liabilities: Subscriptions in advance- $40 • From additional information • Subscriptions in arrears- $128 in this year

  14. Gradeplus Football Club Income and Expenditure Account For the year ended 31 December 20X5 Expenditure $ Pavilion repairs 750 Electricity and insurance 3,530 Other expenses 1,980 Depreciation on pavilion 1,250 Surplus for the year 68 Bar stewards’ wages 7,578 Income $ Members’ subscriptions (4,140+40-160+128) 4,148 Miscellaneous receipts 1,705 Bar profit 1,700 Interest on Building Society Investment 25 7,578 Subscription In arrears b/f 160 I&E 4,148 4,308 In advance b/f 40 Bank 4,140 In arrears c/f 128 4308

  15. Or a simple calculation • In arrears(20X6)= should pay in current year • >Bank($4,140+$128) • In arrears(20X5)= did not pay in last year • >$4268-$160 • In advance(20X5)= received in advance for 20X6 • >$4108+$40

  16. Balance sheet • The balance sheet is as the same as the normal balance sheet except: • ‘Capital’ is replaced by the word ‘Accumulated fund’

  17. Additions • Life Membership Fees • Should be credited to Life Membership Account and transfers the amount incurred in the income and expenditure account • The amount incurred means the current amount should be written off according to the useful life • E.g. life membership fee is $1000 for 10 year: $1000/10=$100 should be calculated as revenue in the I&E account • And the remaining amount $900 should be shown in Balance sheet under Accumulated fund

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