The Favourite Book Club was set up several years ago. The annual subscription of $52 has stayed the same since the club began. Members settle their subscriptions by cheque or by 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 ended 31 December 2022:
Receipts - Subscriptions received $5356
Payments - Rent paid $2080, Insurance paid $732, General expenses paid $2498
In 2021 the club had 128 members and in 2022 it had 120. The treasurer knows that 4 current members will not pay their subscriptions for 2022, so she has chosen to write these subscriptions off.
(a)[7]
For the year ended 31 December 2022, prepare the subscriptions account, then balance it and carry the balances down on 1 January 2023.
(b)[6]
For the year ended 31 December 2022, prepare the income and expenditure account.
(c)[5]
Advise the treasurer on whether she should finance the purchase of the computer equipment by increasing the subscription amount. Support your answer with points both for and against increasing the subscription amount. No calculations are needed.
(d(i))[1]
State the meaning of the following term: receipts and payments account.
(d(ii))[1]
State the meaning of the following term: accumulated fund.
Worked solution & mark scheme
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