VL Sports Club's financial year finishes on 31 December. The treasurer supplied the following receipts and payments details for the year ending 31 December 2020.
Receipts: Subscriptions $19 200; Competition receipts $7300; Dinner dance ticket sales $6500.
Payments: Competition prizes $4100; Dinner dance costs $6200; Equipment $12 000; General expenses $11 500.
The treasurer additionally supplied the following details.
1 January 2020 / 31 December 2020
Equipment at net book value $23 000 / $30 000
General expenses owing $400 / $500
Subscriptions in arrears $700 / $300
Subscriptions in advance $1100 / $900
Of the subscriptions in arrears on 1 January 2020, $80 had still not been settled by 31 December 2020 and must be written off as irrecoverable.
(a)[8]
Prepare the subscriptions account for the year ended 31 December 2020. Balance the account and carry the balances down on 1 January 2021.
(b)[9]
Prepare the income and expenditure account for VL Sports Club for the year ending 31 December 2020.
(c)[3]
Advise the treasurer on whether or not VL Sports Club ought to offer this reduction in annual subscription fees to members who pay in advance. Justify your answer with one advantage and one disadvantage.
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