Financial Statements for Clubs & Societies (Cambridge (CIE) IGCSE Accounting): Exam Questions

The Favourite Book Club was formed several years ago. The subscription amount of $52 per annum has remained unchanged since the club started. All subscriptions are paid by cheque or credit transfer.

The treasurer provided the following information

For the year to 31 December 2022:

The club had 128 members in 2021 and 120 in 2022. The treasurer is aware that 4 current members will not pay their subscriptions for 2022. She has decided to write these subscriptions off.

REQUIRED

Prepare the subscriptions account for the year ended 31 December 2022. Balance the account and bring down the balances on 1 January 2023.

Favourite Book Club
Subscriptions account

Prepare the income and expenditure account for the year ended 31 December 2022.

Favourite Book Club
Income and Expenditure Account for the year ended 31 December 2022

The Favourite Book Club was formed several years ago. The subscription amount of $52 per annum has remained unchanged since the club started. All subscriptions are paid by cheque or credit transfer.

The treasurer provided the following information

The club had 128 members in 2021 and 120 in 2022. The treasurer is aware that 4 current members will not pay their subscriptions for 2022. She has decided to write these subscriptions off.

The treasurer is considering increasing the subscription amount in order to obtain sufficient funds to purchase computer equipment. The equipment would cost $400 and would be used to maintain the club records.

REQUIRED

Advise the treasurer whether she should fund the purchase of the computer equipment by increasing the subscription amount. Justify your answer by making points for and against increasing the subscription amount. Calculations are not required.