D. Ben Quayson Social Club has 160 members who contributed an amount of GH¢ 150 each...

-Life membership fees is a capital receipt, because the organization will have to provide the service to the member for the whole life against the life membership fees. It willbe recorded as a liability in balance sheet and a fair portion will be transferred to Income & Expenditure account every year as an income.

Life Membership fees Account
Date	Particulars	Debit	Date	Particulars	Credit
31.12.2017	Income & Expenditure account*	3480	01.01.2017	Bank(160*150)	24000
31.12.2017	Balance C/d	20520
		24000			24000
31.12.2018	Income & Expenditure account*	2,430	01.01.2018	Balance B/d	20,520
31.12.2018	Balance C/d	19,590	01.01.2018	Bank(10*150)	1500
		22,020			22,020

* Amount to be transferred To income & Expenditure account in 2017
8*150	1200
152*150*1/10	2280
Total	3480
* Amount to be transferred To income & Expenditure account in 2018
20520*1/9	2280
10*150*1/10	150
Total	2430

In 2017-

• 24000 should be treated as receipt of Life member ship fees
• 3480 to be transferred to Income and expenditure account as income
• balance 20520 to be shown as liability in Blalance sheet.

In 2018-

• 1500 should be treated as receipt of Life member ship fees
• 2430 to be transferred to Income and expenditure account as income
• balance 19590 to be shown as liability in Blalance sheet.