FINANCIAL REPORTING 1

PRACTICE QUESTIONS
QUESTION ONE
The following is a summary of the receipts and payments of the Yesum Nyame Prayer
Club during the year ended 31st July, 2019.
Yesum Nyame Prayer Club

Receipts and Payments Account for the year ended 31st July 2019

GH¢ GH¢
Cash and bank balances b/d 210,000 Secretarial expenses 163,000
Sales of competition tickets 437,000 Rent 1,402,000
Members’ subscriptions 1,987,000 Visiting speakers’ expenses 1,275,000
Donations 177,000 Donations to charities 35,000
Refund of rent 500,000 Suppliers of Prizes for 270,000
competitions
Balance c/d 13,000 Stationery and printing 179,000
3,324,000 3,324,000

The following valuations are also available as at 31st July:

2018 2019
GH¢ GH¢
Equipment (original cost GH¢1,420,000) 975,000 780,000
Subscriptions in arrears 65,000 85,000
Subscriptions in advance 10,000 37,000
Owing to suppliers of competition prizes 58,000 68,000
Inventories of competition prizes 38,000 46,000

Required:
a) Calculate the value of the accumulated fund of the Yesum Nyame Prayer Club as at 1st
August, 2018.
b) Prepare the following accounts for the year ended 31st July, 2019:

(i) the subscriptions account,

(ii) the competition prizes account to ascertained the purchase figure.
c) Prepare the Income and Expenditure Account for the Yesum Nyame Prayer Club for
the year ended 31st July, 2019.
d) Prepare the Statement of Financial Position as at 31st July, 2019.

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QUESTION TWO
The following is the Receipts and Payments of Bachelors and Spinsters Club during the year
ended 31st December 2009
RECEIPTS AND PAYMENTS
GHS’000 GHS’000
Cash and bank balance (1/1/09) 300,000 Honorarium to pastors
12,000
Sale of competition tickets 150,000 Publicity of Miss Spinster 100,000
Membership subscription: 2008 44,000 Donation to charity 45,000
2009 366,000 Rent 13,000
2010 15,000 Hire of club house for
Patron’s subscription 100,000 Miss Spinster 226,000
Life membership subscription 250,000 Prizes for competition 22,000
Donations 50,000 Stationery and printing 110,000
Miss Spinster proceeds 500,000 Communication 18,000
Sale of furniture 15,000 New furniture 260,000
Cash and bank bal. c/d 984,000
1,790,000 1,790,000

Assets and liabilities position were given as follows

01/01/09 31/12/09
GHS’000 GHS’000
Furniture and fittings 150,000 See note c
Motor vehicles 100,000 100,000
Subscription due but unpaid 48,000 50,000
Rent paid in advance 8,000 5,000
Telephone bills due 12,000 20,000

The following additional information is given

a. It the policy of the club to transfer Life Membership dues from a deceased member
into the Income and Expenditure Account. Four people paying GHS1,500,000 each
died during the year
b. Only 10% of the patrons’ subscription is absorbed into the income for each year.
c. All non-current assets are depreciated at 10% on cost. During the year, furniture
costing GHS10,000,000 was sold for GHS15,000,000.
d. All subscriptions due for more than one year should be written off.

Required:
1. Determine the Accumulated fund at 01/01/09
2. Prepare the Income and Expenditure account for the year ended 31/12/09
3. A statement of financial position as at 31/12/09

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QUESTION THREE
The statement of financial position of ‘SERIOUS STUDENTS’ CLUB at 31st December,
2010 was as follows:
Non-current assets
Club house at cost 300,000
Equipment at cost 40,000
Furniture and fittings 90,000

Current Assets
Stocks: Bar 32,000
Restaurant 5,000
Subscription 3,200
Cash at bank 18,500
488,700

Accumulated funds 481,000

Current liabilities
Bar creditors 4,200
Restaurant creditors 1,700
Lighting and heating 1,800
488,700

The cash book for the year 2011 has been summarised as follows:
GHS GHS
Balance at bank 18,500 Wages 428,000
Bar takings 491,600 Purchase of equipment 15,000
Restaurant takings 84,200 Rates 31,000
Green workshop fees 28,700 Lighting and heating 17,000
Subscriptions: 2010 3,200 Green workshop expenses 24,200
2011 372,600 Printing and postage 8,600
2012 2,000 Bar creditors 384,300
Rent income 10,500 Restaurant creditors 82,500
Balance at bank 31/12/2011 20,200
1,011,300 1,011,300

1. The membership register showed that subscriptions unpaid at 31/12/11 amounted to

GHS1,000. At the same time, GHS2,700 was owing for Bar purchases and GHS2,300
for Restaurant
2. Club members owed GHS2,100 to the bar for drinks supplied to them
3. Bar and Restaurant stocks amounted to GHS3,900 and GHS4,300 respectively and
lighting and heating unpaid GHS2,000
4. Depreciation of GHS17,000 and GHS8,000 is to be written off equipment and
furniture respectively.

Required:
Prepare the Income and Expenditure Account for the year ended 31/12/2011(including
figures for profit or loss on Bar and Restaurant separately) and a statement of financial
position as at that date

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QUESTION FOUR
Goodness Manufacturing Ltd had been in business for the past two years. The following
balances were extracted from its ledgers at 30th September, 2010.
Stocks at 01/10/2009: GHS GHS
Raw materials 70,000 Purchase of raw materials 60,000
Work in progress 13,600 Factory expenses 5,200
Finished goods 10,400 Sales 213,000
Manufacturing wages 32,000 Carriage outwards 2,500
Discount allowed 900 Sales returns 1,700
Discount received 700 Provision for deprn on 38,000
plant(1/10/2009)
Plant and machinery 80,000 Office expenses 4,200
Selling expenses 7,000 Office equipment 5,000
Administrative expenses 1,900 Power and light 13,500
Rates and insurance 15,000 Carriage inwards 2,800

The following additional information are relevant:

1. Stocks at 30/09/2010 were valued at: WIP GHS8,300, Raw materials GHS25,000 and
finished goods GHS9,300
2. Charge one year’s depreciation at 5% on cost of plant and machinery and 10% on cost
of office equipment
3. Three-fifth of the rates and insurance and four-fifth of the power and light were
attributable to the factory
4. GHS2,500 was owed by the company for special advertising campaign held in August
2010 and one-half of this was to be charged to the financial year ending 30/09/2011.

Required:
Prepare a manufacturing, trading and profit and loss account for the year ended 30/09/10