NON-PROFIT MAKING ORGANISATIONS (CLUB AND ASSOCIATION) CHAPTER 13

13.1 Terminology
Trading Non-trading
Income Statement = Income and Expenditure Account
Profit = Surplus / Excess of income over expenditure
Loss = Deficit / Excess of expenditure over income
Capital = Accumulated Fund
Cash Book = Receipt and Payment Account

EXAMPLE 1
The following is the summary of the receipts and payments of the Barfleet Sports and Social Club for the year ended
30 September 2009:
Receipt £
Entrance fees paid by new members 1,300
Annual subscriptions 13,200
Restaurant takings 15,800
30,300
Payments
Restaurant supplies 9,360
Wages of restaurant staff 2,690
Sport equipment 9,300
Other expenses 1,016
Bank charges 70
Rent 8,600
Honorarium to club treasurer 500
Light and heat 1,060
Advertising 200
Competition prizes 715
33,511
Additional information Oct 1, 2008 Sept 30, 2009
£ £
Cash in hand 27 27
Cash at bank 1,694 ?
Equipment at valuation 17,200 24,500
Subscription in arrear 265 385
Subscription in advance 110 190
Light and heat accrued 35 48
Rent in advance 200 -
Rent in arrears - 350
Creditors for restaurant supplies 489 622
Inventory of restaurant supplies 970 430
30% of the rent expenditure is to be apportioned to the restaurant. Entrance fees are transferred directly to the
accumulated fund (members’ fund).
Required
Prepare, for the Barfleet Sports and Social Club:
a) A statement of the accumulated fund at 1 October 2008
b) The restaurant trading account for the year ended 30 September 2009
c) The income and expenditure account for the year ended 30 September 2009
d) The Statement of Financial Position as at 30 September 2009

Pearson LCCI LEVEL 2 BOOK-KEEPING & ACCOUNTING (ASE20093)

NON-PROFIT MAKING ORGANISATIONS (CLUB AND ASSOCIATION) CHAPTER 13
13.2 Subscription Account
Subscriptions Account (Income)
£ £
Balance b/f (subscription in arrear) X Balance b/f (subscription in advance) X
Income & Expenditure Account X Receipt & payment (subscription received) X
Subscription Written Off X
Balance c/f (subscription in advance) X Balance c/f (subscription in arrear) X
XX XX

EXAMPLE 2
A musical appreciation society had 35 members for the year ended 31 December 2005. The annual subscription fee
is £50 per member.
1. On 1 January 2005, five members had not paid their subscriptions for 2004 and two members had already paid
their subscription for 2005.
2. At 31 December 2005, four members had not yet paid their subscription for 2005 but twelve members had paid
their subscription for 2006.
3. The receipts and payments account for the year ended 31 December 2005 showed that the society had
received subscriptions of £200 relating to 2004, £1,450 relating to 2005 and £600 relating to 2006.
Required
Prepare the Subscription Account for the year ended 31 December 2005. Answer: Income & Expenditure = £1,750

EXAMPLE 3
The Silver Screen Film Appreciation Society was formed on 1 January 2006. The members meet to view and discuss
films. There are 50 members of the society and the first year’s subscription was set at £42 per member. In
December 2006, it was decided that the subscription for 2007 would be £45. By the end of 2006, one member had
already paid his subscription for 2007, but two members still had not paid the 2006 subscription. The treasurer
believed that the two members concerned would pay the arrears at the start of 2007, together with the subscription
for that year.
The treasurer had prepared the receipts and payments account for 2006. This was:
Receipts £ Payments £
Members’ subscription 2,061 Rent of meeting room 360
Purchase of equipment 1,089
Hire of films 430
Fee to guest speaker 100
Refreshments 39
Balance c/f 43
2,061 2,061
Required
Prepare the subscriptions account to show the transfer to the income and expenditure account of the Silver Screen
Film Appreciation Society for the year ended 31 December 2006.

Pearson LCCI LEVEL 2 BOOK-KEEPING & ACCOUNTING (ASE20093)

NON-PROFIT MAKING ORGANISATIONS (CLUB AND ASSOCIATION) CHAPTER 13
13.3 Lifetime Subscription and Joining Fee
Lifetime Subscription
Accounting Entries: Step 1 Lifetime subscription received
DR Bank
CR Lifetime Subscription Fund (Statement of Financial Position)
Step 2 Recognition over number of year
DR Lifetime Subscription Fund (Statement of Financial Position)
CR Life Members Fund (Income & Expenditure Account)
Joining fees (entrance fee)
Accounting Entries: Step 1 Joining fee received
DR Bank
CR Accumulated Fund (Statement of Financial Position)
Step 2 Recognition over number of year
DR Accumulated Fund (Statement of Financial Position)
CR Entrance Fee (Income & Expenditure Account)

EXAMPLE 4
Lawton Archaeologists Club was formed on 1 January 2005. It accepts annual members and life members and
charges a joining fee for new members. Its policy for treating subscription is:
1. Joining fees are credited to a New Members Fund and are transferred to the Income and Expenditure Account
over three years.
2. Annual subscriptions are credited to the Income and Expenditure Account in the year in which they are due.
3. Life membership fees are credited to a Life Fund and the transferred to the Income and Expenditure Account
over a ten-year period.
The following information is available regarding subscription received:
Year ended 31 December 2005 (£) 2006 (£) 2007 (£)
Subscription received 9,400 9,950 10,300
Subscription in advance 200 240 600
Joining fee 420 540 780
Life membership 2,000 4,000 5,000
There were no subscriptions in arrears for any of the three years.

Required
Calculate the subscription that will be included in the Income & Expenditure Account for the year ended 31
December 2007 and the balances on the New Members Fund and Life Fund at 31 December 2007.

Answer:
Income & Expenditure – Subscription = £9,940 - Joining fee = £580 - Life membership = £1,100
Balances – New Members Fund = £700 - Life Fund = £9,100

Pearson LCCI LEVEL 2 BOOK-KEEPING & ACCOUNTING (ASE20093)

NON-PROFIT MAKING ORGANISATIONS (CLUB AND ASSOCIATION) CHAPTER 13
TARGET PRATICE
1) A summary of the Balgreen Bowling Club’s cash book is shown below. From it, and the additional information,
you are to construct an income and expenditure account for the year ending December 2016, and a statement of
financial position as at that date.
Cash Book Summary
£ £
Balance at 01/01/2016 5,600 Purchase of equipment 1,200
Collection at matches 17,200 Rent of green 4,800
Profit on sale of refreshments 22,000 Printing and stationery 200
Secretary’s expenses 320
Repairs to equipment 280
Groundsman’s wages 16,000
Miscellaneous expenses 240
Balance at 31/12/2016 21,760
44,800 44,800
Further information:
i) At 01/01/2016 equipment was valued at £6,000
ii) Depreciate all equipment 10% for the year 2016
iii) At 31/12/2016 rent paid in advance was £1,200
iv) At 31/12/2016 there was £80 owing for printing.

2) The following trial balance of the Grampian Golf Club was extracted from the books as on 31 December 2016:
Dr Cr
£ £
Clubhouse 284,000
Equipment 37,200
Profits from raffles 13,016
Subscriptions received 366,800
Wages of bar staff 58,400
Bar inventory 1 January 2016 18,800
Bar purchases and sales 82,600 168,200
Greenkeepers’ wages 43,000
Golf professional’s salary 74,000
General expenses 1,820
Cash at bank 7,848
Accumulated fund at 1 January 2016 59,652
607,668 607,668
Notes:
i) Bar purchases and sales were on cash basis. Bar inventory at 31 December 31 December 2016 was valued at
£12,820.
ii) Subscription paid in advance by members at 31 December 2016 amounted to £3,740
iii) Provide for depreciation of equipment £4,800

You are required to:

a) Draw up the bar trading account for the year ending 31 December 2016
b) Draw up the income and expenditure account for the year ending 31 December 2016, and a statement of
financial position as at 31 December 2016.

Pearson LCCI LEVEL 2 BOOK-KEEPING & ACCOUNTING (ASE20093)

NON-PROFIT MAKING ORGANISATIONS (CLUB AND ASSOCIATION) CHAPTER 13
3) On 1 January 2015 the Happy Haddock Angling Club had the following assets:
£
Cash at bank 200
Snack bar inventory 800
Club house buildings 12,500
During the year to 31 December 2015 the Club received and paid the following amounts:
Receipts £ Payments £
Subscriptions 2015 3,500 Rent and rates 1,500
Subscriptions 2016 380 Extension to club house 8,000
Snack bar income 6,000 Snack bar purchases 3,750
Visitors’ fees 650 Secretarial expenses 240
Loan from bank 5,500 Interest on loan 260
Competition fees 820 Snack bar expenses 600
Games equipment 2,000
Notes: The snack bar inventory on 31 December 2015 was £900
The games equipment should be depreciated by 20%
a) Prepare an income and expenditure account for the year ending 31 December 2015. Show, either in this
account of separately, the snack bar profit or loss.
b) Prepare a statement of financial position as at 31 December 2015

4) The treasurer of the Plumpton Leisure Centre has produced the following receipts and payments account for the
year ended 31 December 2017:
Receipts £ Payments £
Balance at bank 1 January 2017 3,900 Refreshment supplies bought 4,320
Subscriptions received 45,060 Wages of attendants and cleaners 31,400
Profits from dances 4,116 Rent of building 8,700
Profit on exhibition 890 New equipment bought 18,200
Refreshment takings 16,290 Travelling expenses of teams 1,900
Sale of equipment 340 Balance at bank 31 December 2017 6,076
70,596 70,596
Notes:
i) Refreshment inventory was valued: 31 December 2016 £680; 31 December 2017 £920. There was nothing
owing for refreshment inventory on either of these dates
ii) On 1 January 2017 the club’s equipment was valued at £32,400. Included in this figure, valued at £420, was
the equipment sold during the year for £340.
iii) The amount to be charged for depreciation of equipment for the year is £5,200. This is in addition to the loss
on equipment sold during the year.
iv) Subscriptions owing by members at 31 December 2016 nil; at 31 December 2017 £860

You are required to:

a) Draw up the refreshment trading account for the year ending 31 December 2017. For this purpose £4,680 of
the wages is to be charged to this account; the remainder is to be charged in the income and expenditure
account.
b) Calculate the accumulated fund as at 1 January 2017
c) Draw up the income and expenditure account for the year ending 31 December 2017, and a statement of
financial position as at 31 December 2017.
(Suggested Answer: a) £7,530, b) £36,980, c) Surplus = £15,856, d) Balancing = £52,836)

Pearson LCCI LEVEL 2 BOOK-KEEPING & ACCOUNTING (ASE20093)

NON-PROFIT MAKING ORGANISATIONS (CLUB AND ASSOCIATION) CHAPTER 13
5) The following is a summary of the receipts and payments of the Miniville Rotary Club during the year ended 31
July 2016.
Miniville Rotary Club
Receipts and Payments Account for the year ended 31 July 2016
£ £
Cash and bank balances b/d 210 Secretarial expenses 163
Sales of competition tickets 437 Rent 1,402
Members’ subscriptions 1,987 Visiting speakers’ expenses 1,275
Donations 177 Donations to charities 35
Refund of rent 500 Prizes for competitions 270
Balance c/d 13 Stationery and printing 179
3,324 3,324
The following valuations are also available:
As at 31 July 2015 2016
£ £
Equipment (original cost £1,420) 975 780
Subscriptions in arrears 65 85
Subscriptions in advance 10 37
Owing to suppliers of competition prizes 58 68
Inventory of competition prizes 38 46

Required:
a) Calculate the value of the accumulated fund of the Miniville Rotary Club as at 1 August 2015.
b) Reconstruct the following accounts for the year ended 31 July 2016:
i) The subscription account
ii) The competition prizes account
c) Prepare an income and expenditure account for Miniville Rotary Club for the year ending 31 July 2016 and a
statement of financial position as at that date.

6) The receipts and payments account of the Bunker Golf Club for the year ended 31 December 2015 included the
following receipts:
£
Subscription for 2014 1,750
Subscription for 2015 41,900
Subscription for 2016 3,800
47,450
At 31 December 2014, the club statement of financial position included:
£
Subscription in arrear 2,200
Subscription in advances 2,980
At 31 December 2015:
£
Subscription in arrear for 2014 450
Subscription in arrear for 2015 1,890

Required
Calculate the subscriptions figure to be credited to the income and expenditure account of Bunker Golf Club for
the year ended 31 December 2015

Pearson LCCI LEVEL 2 BOOK-KEEPING & ACCOUNTING (ASE20093)

NON-PROFIT MAKING ORGANISATIONS (CLUB AND ASSOCIATION) CHAPTER 13
7) According to the receipts and payments account of the Naxos Club, £23,560 was received in respect of
subscriptions for the year ended 30 September 2016. At 1 October 2015, subscriptions in arrear were £1,045 and
subscriptions in advance were £650. At 30 September 2016, subscriptions in arrear were £875 and subscriptions
in advance were £520.
Required
Calculate the subscriptions amount to be credited to the income and expenditure account of the Naxos Club for
the year ended 30 September 2016.

8) An amateur theatrical group charges its members an annual subscription of £20 per member. It accrues for
subscriptions owing at the end of each year and also adjusts for subscriptions received in advance.
a) On 1 January 2017, 18 members had not yet paid their subscriptions for the year 2016
b) In December 2016, 4 members paid £80 for the year 2017.
c) During the year 2017 it received £7,420 in cash for subscriptions:
£
For 2016 360
For 2017 6,920
For 2018 140
7,420
d) At 31 December 2017, 11 members had not paid their 2017 subscriptions.
Required
Prepare Subscription Account for year 2017.

9) The Green Heights Gold Club treats receipts from members in the following way:
a) Entrance fees for new members are credited directly to the accumulated fund when received
b) Annual subscriptions were credited to the income and expenditure account of the year in which the
subscriptions are receivable.
c) Life membership fees are credited initially to a life fund and then credited to the income and expenditure
account over a five-year period.
Receipts for the last five years have been:
2006 2007 2008 2009 2010
£ £ £ £ £
Subscription received 22,345 24,567 26,395 28,987 30,769
Of which, subscriptions in advance 1,087 987 1,356 845 922
Entrance fees received 900 500 2,200 3,100 1,000
Life subscriptions received 7,200 5,500 8,100 10,600 12,800
There were never any arrears of subscriptions.
Required
Calculate the amount to be credited to the income and expenditure account of the Green Height Golf Club for
the year ended 31 December 2010.

Pearson LCCI LEVEL 2 BOOK-KEEPING & ACCOUNTING (ASE20093)