Receipts and Payments

Receipts and Payments Account 🧾

These Accounts are prepared for organizations whose aim is not to make profit, e.g., charity organizations, clubs, associations, churches, government, NGOs, etc. 🤝

Accounts Under Nonprofit Organizations:

Receipt and Payments 💰
Income and Expenditure 📊
Subscription Account 📝
Balance Sheet 📈

Receipt and Payment Example 💵

The treasurer of SKM Football Club had the following details from the summary Cash Book at 31st December 2011:

Details	Amount (K)
Bank balance at 1 December 2010	630,000
Cash Balance at 1 December 2010	100,000
Cash Receipts during the year 2011	1,700,000
Members' Subscription for 2011	1,360,000
Game gate takings	1,700,000
Annual social party collections	1,340,000

Expenses During the Year 2011

Expense	Amount (K)
Rent	2,340,000
Printing and stationery	180,000
Affiliation fees	120,000
Secretarial expenses	370,000
Refreshment during games	610,000
Annual social party expenses	1,020,000
New equipment purchased	260,000

SKM Football Club Financial Statements 📑

The treasurer also had the following details:

Description	Amount (K)
Amount due to the club	260,000
Members subscription	1 December 2010
	31st December 2011
Members subscription	140,000
Game gate takings	780,000
Annual social party collections
Amounts owned by the club	160,000
Rent	720,000
Printing	30,000
Secretarial Expenses	40,000
Visitors refreshments expenses	130,000
On 1 December 2010 the club’s equipment had a book value of	K1,500,000
It was decided that 10% of total book value of the equipment be written off at 31st December 2011.

You are required to:

(a) Show the summary receipts and payments account for the year and calculate the cash balance at bank [8 ½] 💵
(b) Prepare the income and expenditure account for the year ended 31st December 2011 [13 ½] 📊
(c) Prepare the balance sheet as at that date [13] 📈

Solution 🛠️

SKM’S Football Club Receipts and Payments for the year ended 31ST December 2011

Receipts	Amount (K)
Balance b/f: Cash	630,000
Balance b/f Bank	100,000
Subscription (140,000 + 1,360,000 + 200,000)	1,700,000
Game Takings	1,700,000
Annual Social Party Collection	1,340,000
Total Receipts	5,470,000

LESS PAYMENTS:

Payments	Amount (K)
Rent	2,340,000
Printing and Stationary	180,000
Affiliation fee	120,000
Secretary expenses	370,000
Refreshment During games	610,000
Annual Social party Expenses	1,020,000
New Equipment	260,000
Total Payments	4,900,000

Bank/Cash Balance 💳

570,000

SKM’S Football club Income and Expenditure Statement FOR the year ended 31 December 2011

Income	Amount (K)
Subscription (1,360,000 + 120,000)	1,480,000
Game Takings (1,700,000 + 530,000 – 780,000)	1,450,000
Annual Social Party (1,340,000 - 160,000 + 1,020,000)	160,000
Total Income	3,090,000

Less Expenditure

Expenditure	Amount (K)
Rent (2,340,000 – 720,000 + 540,000)	2,160,000
Printing and Stationery (180,000 + 30,000)	210,000
Affiliation fees	120,000
Secretarial expenses (370,000 - 40,000 + 80,000)	410,000
Refreshment During the Games (610,000 - 130,000 + 120,000)	600,000
Depreciation of equipment	176,000
Total Expenditure	3,676,000
Deficit	(586,000)

SKM’S Football Club's Balance Sheet as at 31ST December 2011

Fixed Asset	Cost	Dep.	NBV
Equipment (1,500,000 + 260,000)	1,760,000	176,000	1,584,000

Current Assets

Current Assets	Amount (K)
Subscription owing	120,000
Game gate takings	530,000
Cash at bank	570,000
Total Current Assets	1,220,000

Less: Current Liabilities

Liabilities	Amount (K)
Rent Owing	540,000
Printing and stationery	30,000
Secretarial Expense	50,000
Refreshment creditors	80,000
Prepaid subscription	200,000
Total Current Liabilities	970,000

Working Capital

250,000

Net assets

1,834,000

Financed By;

Accumulated Fund (W1)	Amount (K)
Accumulated Fund	2,420,000
Less: deficit	(586,000)
Total	1,834,000

W1. Accumulated Fund

Assets	Amount (K)
Cash	630,000
Bank	100,000
Subscription	140,000
Game Takings	780,000
Annual Social Party	160,000
Equipment	1,500,000
Total Assets	3,310,000

Less Liabilities

Liabilities	Amount (K)
Rent Owing	720,000
Secretarial Expenses	40,000
Visitors Refreshments Exp.	130,000
Total Liabilities	890,000

Accumulated Fund as of 01.01.11 📅

2,420,000

A Tens Club Subscription Example

A Tens Club charges its members an annual subscription of K20 per member. It accrues for subscriptions at the end of each year and adjusts for subscriptions received in advance. On January 1, 2013, 18 members had not yet paid their subscription for the year 2012. In December 2012, 4 members paid K80 for the year 2013. During the year 2013, it received K7,420 in cash for subscriptions:

Date	Details	Debit (K)	Credit (K)
2013 Jan 1	Balance b/d bank	360
	Income and expenditure balance c/d	7,220	140
	Balance b/d		80
			7,420

Examination Question

Q1. The Chingola Recreation club had the following details during the year ended 31 March 2014:

Receipts and Payments Account for the Year Ended 31 March 2014

Details	Amount (K)
Bank Balance B/D	40,000
Sales of Refreshments	525,000
Subscription	250,000
Donations	702,000
Balance C/D	513,200
Total	2,030,200

Additional Information

The following information is also available:

Details	31/03/13 (K)	31/03/14 (K)
Subscriptions in advance	78,000	21,200
Subscriptions in arrears	56,400	49,000
Stock of refreshments	27,000	32,500
Arrears on suppliers of refreshments	10,000	15,000
Printing machine (cost 500,000)	370,000	320,000

Required

Prepare the trading account for refreshments with the correct heading.

Prepare the subscriptions account.

Prepare the income and expenditure account for the year ended 31st March 2014 and the Balance sheet at that date (show the calculation of the Accumulated Fund as at 1st April 2014).