The balances below are from the records of Little Joy Junior School on 31 December 2022. Imagine that the School Board asked you to prepare the Receipts and Payments account and the Income and Expenditure accounts that they will present to the parents at the AGM.

To prepare the Receipts and Payments Account and the Income and Expenditure Account, we first need to identify and adjust the relevant figures. The "Balance in the Bank account M212 060" on 31 December 2022 is the closing balance. We will calculate the opening bank balance for the Receipts and Payments Account. Step 1: Calculate total cash receipts (excluding opening balance) and total cash payments (excluding closing balance). Total Cash Receipts: M94\,800 (School fees) + M20\,000 (Donations) + M15\,000 (Sales of uniform) = M129\,800 Total Cash Payments: M7\,300 (Stationery) + M102\,000 (Equipment) + M12\,344 (Sundry expenses) + M50\,000 (Salaries) + M22\,000 (Rent) + M5\,367 (Electricity) = M199\,011 Step 2: Calculate the opening bank balance for the Receipts and Payments Account. Given the closing bank balance of M212 060, we can find the opening balance: Opening Balance = Closing Balance - Total Receipts + Total Payments Opening Balance = M212\,060 - M129\,800 + M199\,011 = M281\,271 Step 3: Prepare the Receipts and Payments Account for the year ended 31 December 2022. This account summarizes all cash inflows and outflows during the year. |l|r|l|r| Receipts & Amount (M) & Payments & Amount (M) \\ To Balance b/d (1 Jan 2022) & 281\,271 & By Stationery bought & 7\,300 \\ To School fees received & 94\,800 & By Equipment purchased & 102\,000 \\ To Donations received & 20\,000 & By Sundry expenses & 12\,344 \\ To Sales of uniform & 15\,000 & By Instructor salaries & 50\,000 \\ & & By Building rent & 22\,000 \\ & & By Electricity expense & 5\,367 \\ & & By Balance c/d (31 Dec 2022) & 212\,060 \\ Total & 411\,071 & Total & 411\,071 \\ Step 4: Calculate adjusted expenditure items for the Income and Expenditure Account. Stationery consumed: Stationery bought (M7 300) less closing inventory (M1 100). M7\,300 - M1\,100 = M6\,200 Depreciation on equipment: 10% of the cost of equipment purchased (M102 000). 10\% × M102\,000 = M10\,200 Building rent expense: Rent paid (M22 000) plus rent owing (accrued) at year-end (M2 000). M22\,000 + M2\,000 = M24\,000 Step 5: Calculate total income for the Income and Expenditure Account. Income items are recognized when earned. No adjustments are specified for these. M94\,800 (School fees) + M20\,000 (Donations) + M15\,000 (Sales of uniform) = M129\,800 Step 6: Calculate total expenditure for the Income and Expenditure Account. This includes the adjusted expenditure items and other expenses. M6\,200 (Stationery) + M10\,200 (Depreciation) + M12\,344 (Sundry expenses) + M50\,000 (Salaries) + M24\,000 (Rent) + M5\,367 (Electricity) = M108\,111 Step 7: Determine the surplus or deficit for the Income and Expenditure Account. Surplus = Total Income - Total Expenditure Surplus = M129\,800 - M108\,111 = M21\,689 Step 8: Prepare the Income and Expenditure Account for the year ended 31 December 2022. This account shows the financial performance on an accrual basis. |l|r|l|r| Expenditure & Amount (M) & Income & Amount (M) \\ To Stationery consumed & 6\,200 & By School fees & 94\,800 \\ To Depreciation & 10\,200 & By Donations & 20\,000 \\ To Sundry expenses & 12\,344 & By Sales of uniform & 15\,000 \\ To Instructor salaries & 50\,000 & & \\ To Building rent & 24\,000 & & \\ To Electricity expense & 5\,367 & & \\ To Surplus & 21\,689 & & \\ Total & 129\,800 & Total & 129\,800 \\ What's next? 📸