A club's membership fees account shows a debit balance of £300 and a credit balance of £180 at
1 January 20X1. During the year ending 31 December 20X1, subscriptions received amounted to £3,750. Subscriptions overdue from the year ended 31 December 20X0, of £80, are to be written off. At 31 December 20X1, subscriptions paid in advance amount to £150.
The amount to be transferred to the income and expenditure account for the year ending 31 December 20X1 is

Question

Quizplus · Accepted Answer

The correct amount to be transferred to the income and expenditure account is calculated as follows: Start with the subscriptions received during the year (£3,750), add the debit balance from the beginning of the year (£300) because it represents subscriptions due from the previous year that are now recognized as income, subtract the subscriptions to be written off (£80) since they will not be collected, and finally, subtract the subscriptions paid in advance (£150) because they represent income for the next year, not the current year. Therefore, the calculation is £3,750 + £300 - £80 - £150 = £3,820. However, the correct calculation should include adjusting for the initial credit balance of £180 (which represents income received in advance from the previous year and should be added to this year's income), leading to the corrected calculation: £3,750 + £300 - £80 - £150 + £180 = £4,000. It appears there was a mistake in my explanation regarding the final calculation and the options provided do not match the corrected calculation. The correct approach to find the answer based on the options given would involve accurately accounting for the initial balances and adjustments. Given the discrepancy, the explanation aimed to demonstrate the process of adjusting for various factors in determining the income for the year, but please note the final figure provided does not match the available options due to an oversight in the calculation process.

A Club's Membership Fees Account Shows a Debit Balance of £300