Show how Ben Sarpong should treat the Life membership fee in the financial Statements of Ben Quayson’s Social Club for 2017 and 2018 years.
Show how Ben Sarpong should treat the Life membership fee in the financial Statements of Ben Quayson’s Social Club for 2017 and 2018 years.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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Ben Quayson Social Club has 160 members who contributed an amount of GH¢ 150 each as Life membership
fee on 01/01/2017. One tenth of the Life membership fee is charged to Income and expenditure account each
year. But when a member dies, the whole amount is transferred to income and expenditure account.
Unfortunately, 8 members died in 2017 and 10 members were enrolled in 01/01/2018. Ben Sarpong, the
Accountant is confused on how to treat the fees. The club prepares account to 31st December each year.
Required :
Show how Ben Sarpong should treat the Life membership fee in the financial Statements of Ben Quayson’s
Social Club for 2017 and 2018 years.
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