Several years ago, the Favourite Book Club was established. Since the club began, the annual subscription has stayed at $52. Payment of subscriptions is made only by cheque or credit transfer.
The treasurer supplied the information below.
At 1 January 2022 / At 31 December 2022
Subscriptions in advance: $260 / $156
Subscriptions in arrears: $468 / $1040
Insurance paid in advance: $348 / $366
Cash at bank: $68 / $114
For the year to 31 December 2022:
Receipts - Subscriptions received $5356
Payments - Rent paid $2080; Insurance paid $732; General expenses paid $2498
The club had 128 members in 2021 and 120 in 2022. The treasurer knows that 4 current members will not pay their subscriptions for 2022. She has chosen to write these subscriptions off.
(a)[7]
Prepare the subscriptions account for the year ended 31 December 2022. Balance the account and carry the balances down on 1 January 2023.
(b)[6]
Prepare the income and expenditure account covering the year ended 31 December 2022.
(c)[5]
Advise the treasurer whether she ought to finance the purchase of the computer equipment by raising the subscription amount. Support your answer with points both for and against increasing the subscription amount. No calculations are needed.
(d(i))[1]
State what is meant by the following term: receipts and payments account.
(d(ii))[1]
State what is meant by the following term: accumulated fund.
Worked solution & mark scheme
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