Question

Railways club has 764 members, each paying an annual subscription of £25. As of January 1, 14 members were in arrears for two years' subscription and 21 more for one year. Subscriptions received in 2019 amounted to £17,425. Ascertain, on the accruals basis, the subscription income of the club for the year ended 31 December 2019.

option:
a) £17,425

b) £19,100

c) £17,875

Answer 1

The subscription income of the Railways club for the year ended 31 December 2019, on the accruals basis, is £17,875. The correct answer is option c).

Step-by-step explanation:

To calculate the subscription income of the club for the year ended 31 December 2019, we need to consider the total number of members and the subscription fees.

Given that there are 764 members each paying an annual subscription of £25, the total subscription income would be 764 * £25 = £19,100.

However, we also need to account for the members in arrears.

There were 14 members in arrears for two years' subscription, which would amount to

£14 * 2 * £25 = £700,

and 21 more members in arrears for one year's subscription, which would amount to

£21 * £25 = £525.

Subtracting these amounts from the total subscription income, we get

£19,100 - £700 - £525 = £17,875.