c) A Club collects annual subscriptions of K20 from each member. It is club policy to accrue subscriptions owing at the end of each year and also to adjust for subscriptions received in advance. It is also club policy not to accept part-payments of subscriptions from any member. On 1 January 2002, members owed K360 for 2001. On 31 December 2001, members paid K80 for the year 2002. During the year 2002 the club received cash for subscriptions amounting to K7 420; of which K6 920 was for 2002 and K140 for 2003 while the outstanding subscriptions at 31 December 2001 were also fully paid. At 31 December2002, some members had not paid their 2002 subscriptions amounting to K500. Required:i. Determine the amount of subscriptions to be charged to the Income and Expenditure account of the club for the year 2002.ii. How many members had prepaid their subscriptions at the end of 2001?iii. How many members fully paid their subscriptions during the year under review? iv. How many members have so far paid their subscriptions for 2003? v. How many members owed the club at the beginning of the financial year under review?vi. How many members paid what was fully charged to the Income and Expenditure account? Question "Subscriptions owing' is usually treated as an asset of the organisation.However, experienced treasurers will tell you that subscriptions owing for a longtime are usually never paid. A lot of clubs do not therefore bring in unpaidsubscriptions as an asset in the statement of financial position.a) State and explain which accounting concept is at play when subscriptionsowing are excluded from the statement of financial position.b) In an examination, how are you, as a student, expected to treatsubscriptions owing, and what is the exception to the general rule?c) A Club collects annual subscriptions of K20 from each member. It is clubpolicy to accrue subscriptions owing at the end of each year and also toadjust for subscriptions received in advance. It is also club policy not toaccept part-payments of subscriptions from any member.On 1 January 2002, members owed K360 for 2001. On 31 December 2001,members paid K80 for the year 2002. During the year 2002 the clubreceived cash for subscriptions amounting to K7 420; of which K6 920 wasfor 2002 and K140 for 2003 while the outstanding subscriptions at 31December 2001 were also fully paid. At 31 December2002, some membershad not paid their 2002 subscriptions amounting to K500.Required:i. Determine the amount of subscriptions to be charged to the Income andExpenditure account of the club for the year 2002.ii. How many members had prepaid their subscriptions at the end of 2001?ii.How many members fully paid their subscriptions during the year underreview?iv.How many members have so far paid their subscriptions for 2003?v. How many members owed the club at the beginning of the financial yearunder review?vi.How many members paid what was fully charged to the Income andExpenditure account?

Income and Expenditure A/c It is a summary of all items of incomes and expenses of non-trading…

Answered: c) A Club collects annual subscriptions…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

c) A Club collects annual subscriptions of K20 from each member. It is club
policy to accrue subscriptions owing at the end of each year and also to
adjust for subscriptions received in advance. It is also club policy not to
accept part-payments of subscriptions from any member.
On 1 January 2002, members owed K360 for 2001. On 31 December 2001,
members paid K80 for the year 2002. During the year 2002 the club
received cash for subscriptions amounting to K7 420; of which K6 920 was
for 2002 and K140 for 2003 while the outstanding subscriptions at 31
December 2001 were also fully paid. At 31 December2002, some members
had not paid their 2002 subscriptions amounting to K500.
Required:
i. Determine the amount of subscriptions to be charged to the Income and
Expenditure account of the club for the year 2002.
ii. How many members had prepaid their subscriptions at the end of 2001?
iii. How many members fully paid their subscriptions during the year under
review?
iv. How many members have so far paid their subscriptions for 2003?
v. How many members owed the club at the beginning of the financial year
under review?
vi. How many members paid what was fully charged to the Income and
Expenditure account?

Expert Solution

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here