Q.14. How would the following items be treated while preparing the financial statements of a sports club?(3)ParticularsAmount (Rs.)Prize Fund44,000Interest on Prize Fund Investments6,000Prizes awarded46,000Match Expenses64,000Prize Fund Investments44,000n
Answers
Answer:
above is the solution.
Explanation:
prize fund will be increased by interest earned on investments made from prize fund..and decreased by the prizes awarded. also, prize fund investment will be shown as an asset
as there is no fund for match, hence match expenses will go to income and expenditure account.
Explanation:
- Prize Fund - Rs. 44,000
It will be shown as an asset on the balance sheet of a sports club.
- Interest on Prize Fund Investment - Rs. 6,000
Since It is the interest on the investment of the Prize fund, therefore it will be shown as an asset on the balance sheet of the Sports Club and will be added to the Prize fund.
- Prize Awarded - Rs.46,000
It will be shown on the asset side of the balance sheet of the Sports Club and it will be subtracted from the Prize fund.
- Match Expenses - Rs. 64,000
It will be shown on the debit side of the Income and Expenditure Account as an expenditure of the Sports Club.
#SPJ2