UCLES 2016 970633ON16 2AB Cricket Club is a not for profit organisation

Ucles 2016 970633on16 2ab cricket club is a not for

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© UCLES 2016 9706/33/O/N/16AB Cricket Club is a not-for-profit organisation. REQUIRED (a) State tworeasons why the members of a not-for-profit organisation do not receive a dividend.[2] Additional information The treasurer of AB Cricket Club provided the following financial information: 1 At 1 September 2015 the assets and liabilities were: $ Equipment at net book value 7800 Subscriptions in advance 490 Subscriptions in arrears 270 Life membership fund 1500 Trade payables for refreshments 265 Inventory of refreshments 420 Accumulated fund 7825 2 The receipts and payments account for the year ended 31 August 2016 was as follows: Receipts and payments account $ Bank balance b/d 1590 Groundsman’s wages 7Subscriptions 11200 Repairs to clubhouse Sale of equipment 4000 Purchase of equipment 2Match ticket sales 6400 Cost of refreshments 1Refreshments 2500 Awards to players 1Life membership 800 Administration expenses Donation 3500 Bank balance c/d 11Savings account c/d 3500 29990 29990 3 At 31 August 2016, the balances were: $ Subscriptions in advance 295 Subscriptions in arrears 165 Trade payables for refreshments 315 Inventory of refreshments 390 4 The donation of $3500 is to be used for the purchase of a new clubhouse. It had been invested in a new savings account and is to be capitalised. 5 The club depreciates its equipment at 10% on the net book value. A full year’s depreciation is charged in the year of purchase. No depreciation is charged in the year of sale. 6 Equipment sold had a net book value of $3640. 7 The life membership fund is transferred to the income and expenditure account over 10 years in equal instalments. 8For the year ended 31 August 2016 the club made a profit of $720 on the sale of refreshments. 2 $ 500 700 500 700 450 760 880
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5 © UCLES 2016 9706/33/O/N/16 [Turn over REQUIRED (b) Prepare the income and expenditure account for the year ended 31 August 2016. [11] (c)Prepare the statement of financial position at 31 August 2016. [8] (d) Explain why the club transfers life membership fund to the income and expenditure accounts over 10 years. [4] [Total: 25]
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6 3XY Limited has been trading for many years. Before the end of year audit, the chairman made the following statement: ‘I am pleased to report that the profit for the year ended 31 March 2016 has increased from $86000 to $174000. These results have been achieved through careful cost control and concentrating on those areas which offer the greatest return.’ However during the end of year audit the auditors discovered the following: 1 Equipment with a net book value of $180000 had become obsolete during the year but had not been written off. The directors believed that the buildings have increased in value by $200000, which cancelled out any loss on the obsolete equipment. So no adjustment had been made. 2 The method of inventory valuation had been changed at the end of the year from AVCO to FIFO. The AVCO valuation had been $142000 whereas the FIFO valuation was $184000. 3 At 31 March 2016 the trade receivables amounted to $675000. During the year a debt for $81000 had been written off. However, a cheque for 75% of this amount had been discovered during the audit. The cheque had not been recorded in the books of account but is expected to clear the bank. REQUIRED (a)Explain the term stewardship. [2] (b)Explain the purpose of an end of year audit. [2] (c)State whether the published audit report will be qualified or not. [1] (d)(i) © UCLES 2016 9706/33/O/N/16
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