Answer to Question #157753 in Accounting for Jane Muthoni ndirangu

Question

 treasurer of MMU Accountants’ Club has produced the following receipts and payments 

account for the year ended 31st December 2018.

Receipts Kes Payments Kes

Balance at bank 1 January 2018 195,000 Payments for refreshment supplies 216,000

Subscriptions received 2,253,000 Wages of attendants and cleaners 1,570,000

Profits from dances 205,800 Rent of building 435,000

Profit on exhibition 44,500 New equipment bought 910,000

Sales of Refreshments 814,500 Traveling expenses of teams 95,000

Sale of equipment 17,000 Balance at bank 31st December 2018 303,800

3,529,800 3,529,800

Additional information:

(i) Refreshment stocks were valued: 31st December 2017 Kes 34,000; 31st December 2018 

Kes 46,000. Owing for refreshment stocks on these dates were Kes 5,000 and Kes 78,000 

respectively.

(ii) On 1st January 2018, the club’s equipment was valued at Kes 1,620,000. Included in this 

figure, valued at Kes 21,000, was the equipment sold during the year for Kes 17,000. 

(iii) The amount to be charged for depreciation of equipment for the year is Kes 260,000. The 

club’s policy is not to charge depreciation on equipment on the year of disposal.

(iv) Subscriptions owing by members at 31st December 2018 Kes 31,500; at 31st December 

2018 Kes 43,000

(v) Kes 234,000 of the wages expenses and 10% of the rent expenses relate to the 

refreshment account

Required:

i) Refreshment income statement for the year ended 31st December 2018 (4 marks)

ii) Income and Expenditure statement (statement of comprehensive income) for the year 

ended 31st December 2018 (9 marks)

iii) Statement of financial position as at 31st December 2018 (7 mar

Answer 1

The answer to your question is provided in the image: