Fund accounting exercise

You are the treasurer of a new charity and you are asked to prepare the accounts at the end of the first year ending 31 December 200X. During the year the charity received or spent the following income:

• Received: £100,000 from an appeal to fund the running of an orphanage in Romania. In respect of this project you have incurred the following costs:
  Salaries £2,000
  Travel to site £1,000
  Licences £5,000
  Total £8,000
• Received: £50,000 in respect of a donation from a trust which has given you the money towards the cost of running advice shops for refugees. Of this sum £10,000 was spent by the period end.
• General donations and covenanted income of £80,000 were received. From this the sum of £5,000 was spent on general charity expenditure on UK projects.
• You incurred running costs as follows:
  Fundraising and publicity £20,000
  Management and administration £30,000
  Total £50,000
• Interest was earned on the unspent funds as follows:
  Romania appeal £5,000
  Money from the trust £2,000
  General donations £3,000
  Total £10,000

You are required to prepare Statement of Financial Activities and balance sheet in accordance with the charity SORP, with particular reference to fund accounting.

Check your answers with the sample answers to this activity.