The following balances were extracted from the financial records of Unity Recreation Club as at 1st January 2025:
| Item | Amount (\text{N}) |
|---|---|
| Club Equipment | 350,000 |
| Cash at Bank | 45,000 |
| Subscriptions in Arrears | 12,000 |
| Prepaid Insurance | 5,000 |
| Subscriptions received in Advance | 8,000 |
| Accrued Electricity Expense | 4,000 |
| Trade Creditors for Bar Supplies | 15,000 |
What is the accumulated fund of the club as at 1st January 2025?
- \text{N}385,000Answer
- B\text{N}377,000
- C\text{N}361,000
- D\text{N}439,000
Answer
The accumulated fund of Unity Recreation Club as at 1st January 2025 is \text{N}385,000.
The accumulated fund is equivalent to capital in a profit-oriented business and is computed by subtracting total liabilities from total assets on a Statement of Affairs. Total assets comprise Club Equipment (\text{N}350,000), Cash at Bank (\text{N}45,000), Subscriptions in Arrears (\text{N}12,000), and Prepaid Insurance (\text{N}5,000), giving \text{N}412,000. Total liabilities comprise Subscriptions in Advance (\text{N}8,000), Accrued Electricity (\text{N}4,000), and Bar Creditors (\text{N}15,000), giving \text{N}27,000. Subtracting liabilities from assets yields \text{N}385,000.
Step-by-Step Solution
Key Concept
Accumulated Fund in Non-Profit Organizations