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PROFIT ORGANIZATION
LECTURE 13
Non- Profit Organization
• Operated without the intention of making
profits.
RM
For 2012 540
For 2013 10,380
For 2014 210
• At the end of 31 December 2013, 17 members had not paid their 2013 subscriptions.
REQUIRED:
Based on the above information, prepare the subscriptions account for the year ended 31 December 2013 of
the FPK Bowling Club.
Members’ Subscriptions
Subscriptions
2013: 2013:
Jan 1 Beginning balance 450 Jan 1 Beginning balance 180
(arrears) (advance)
Dec 31 Income & 11,160 Dec 31 Cash 11,130
Expenditure
Dec 31 Ending balance 210 Dec 31 Ending balance 510
(advance) (arrears)
11,820 11,820
Life Membership Subscriptions
• Members can enjoy the facilities of the clubs and
become members for life by paying certain lump sum
subscriptions.
• The subscriptions will not be treated as income in the
Income and Expenditure account solely in the year it is
received.
• A separate life membership subscription account
will be prepared.
• The life subscription will be written off annually to the
Income and Expenditure account by instalments and
the credit balance remaining at the end of each year
will be shown in the balance sheet as liability.
Life Membership Subscriptions
• Illustration:
The FPK Bowling Club requires a member to pay
RM3,000 to obtain life membership. During the year
ended 31 December 2013, this club had received
payment of RM3,000 from 5 members. It is the
club's policy to allocate life membership fees to
Income and Expenditure account over a 15-year
period.
REQUIRED:
Prepare a life membership account for the year
ended 31 December 2013.
Life Membership Subscriptions
Life Membership Account
Income and Expenditure 1,000 Receipts and Payment 15,000
account account